Scenario- Sanders Construction Co.
Instructions: Read the scenario below and answer questions 1–3 in a Microsoft® Word® document. For question 1, give your answer and show your work. For Questions 2 and 3 answer each question in a paragraph of at least 100 words. Use APA format and cite any sources.
Scenario: Sanders Construction Co. specializes in building replicas of historic houses. Brett Sanders, president of Sanders Construction, is considering the purchase of various items of equipment on July 1, 2014 for $300,000. The equipment would have a useful life of 5 years and no residual value. Brett is considering depreciating the equipment by the straight-line method or the double declining balance method. Answer the following questions:
- Calculate the depreciation for the first year using the straight-line method and the Double declining balance method, show your work.
- In a short paragraph, explain the straight-line depreciation method and the Double declining balance method.
- In your opinion, which method would be better for the company to use, why? Explain your answer.
Make sure your document includes:
- Your Name
- Course Name and Section Number
- Unit Number
- Assignment Name
- Page Numbers