Ball and Bats Inc.: Double Line Method and the Straight Line Method

Ball and Bats, Inc.: Double Line method and the Straight Line Method

On January 1, 2005 the company Balls and Bats, Inc. made a

purchase of equipment. The cost of the equipment was one hundred thousand dollars and had life expectancy of four years. The following schedules are the double-declining balance method and the straight line method of depreciation. This schedule will assist Balls and Bats, Inc determine the best method to depreciate there new acquisition. Further, the schedules will determine which will glean a higher net income for the organization for the year ending December 31, 2005.

Double-declining balance method (DDB)

Year 1: D= .50(100,000)

= 50,000

Year 2: D= .50(100,000- 50,000)

= .50(50,000)

= 25,000

Year 3: D= .50(100,000-50,000-25,000)

= .50(25,000)

= 12,500

Year 4 D= .50(100,000-50,000-25,000-12,500)

= .50(12,500)

= 6,250

Declining-Balance at Twice

the Straight-Line

Rate (DDB)

Annual Depreciation Book Value