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On August 3 , Franko Construction purchased special - purpose equipment at a cost of $ 2 , 2 0 0 , 0 0 0

On August 3, Franko Construction purchased special-purpose equipment at a cost of $2,200,000. The useful life of the equipment
was estimated to be eight years, with an estimated residual value of $60,000.
Required:
a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line
depreciation method (half-year convention).
b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent
declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense.
c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial
reporting purposes during the first two years of the equipment's use?
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