Balls and Bats, Inc.
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Balls and Bats, Inc. purchased equipment on January 1, 2005, at a cost of $100,000. The estimated useful life is 4 years with a salvage value of $10,000.
For this assignment you are to complete the following tasks:
Prepare two different depreciation schedules for the equipment - one using the double-declining balance method, and the other using the straight-line method. (Round to the nearest dollar).
Determine which method would result in the greatest net income for the year ending December 31, 2005.
How would taxes affect management's choice between these two methods for the financial statements?
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