A storage tank acquired at the beginning of the fiscal year at a cost of $90,000 has an estimated residual value of $12,000 and an estimated useful life of 25 years. a. Determine the amount of annual depreciation by the straight-line method. $fill in the blank 1 b. Determine the amount of depreciation for the first and second years computed by the double-declining-balance method.

a)  The amount of annual depreciation by straight-line method = Cost of the asset - Salvage Value / Number of years in useful life

= ($90,000 - $12,000) / 25 years

= $78,000 / 25 years

= $3,120

Thus, the amount of depreciation under straight-line method is $3,120.

b)  Depreciation for first year under double declining balance method = Cost of the asset / Number of years in useful life * 2

= $90,000 / 25 years * 2

= $7,200

Thus, the amount of depreciation for the first year under double declining balance method is $7,200.

Depreciation for second year under double declining balance method = Cost of the asset - First year depreciation / number of years in useful life * 2

= $90,000 - $7,200 / 25 years * 2

= $6,624

Thus, the amount of depreciation for the second year under double declining balance method is $6,624.

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