Double-declining balance depreciation methods

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Reference no: EM133674884

Question

Taylor Trike purchased equipment for underwater welding. The equipment cost $425,000 on January 1, 2022 and a residual value of $35000, with a useful life of 5 years. In 2023, Taylor has a gross profit of $810,000 and operating expenses of $372,000. Taylor Trike has a tax rate of 38%.

1. Compute the Depreciation Expense for 2023 under both the straight-line and double-declining balance depreciation methods.

2. What is the change in net income if the accelerated depreciation method is used in 2023.

Reference no: EM133674884

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