Computing Depreciation Expense

Equipment costing $790,000, with an expected scrap value of $80,000 and an estimated useful life of five years, was purchased on January 1 of the current year.

Calculate the depreciation expense for the 5 years of the asset's useful life using:

Round to the nearest whole number.

	Year 1	Year 2	Year 3	Year 4	Year 5
Straight-line depreciation
Double-declining balance
(a) without straight-line switch-over
(b) with straight-line switch-over

Which method is typically preferred for:

(a) income tax purposes?	(Double-declining balance) or (Straight-line method)
(b) financial reporting purposes?	(Double-declining balance) or (Straight-line method)