Textbook Problem

Depreciation Methods Sayers Company purchased a building for $250,000 on January 2, 2019. The building has an expected residual value of $20,000 at the end of its expected life of 20 years.

Required:

1. 1. Prepare a schedule showing depreciation expense for 2019 and 2020 and the book value on December 31, 2019, and December 31, 2020, for each of the following methods:
2. a. straight-line
3. b. sum-of-the-years’-digits
4. c. double-declining-balance
5. d. 150%-declining-balance
6. 2. Next Level Holding all other things equal, what is the effect of depreciation on the rate of return?