a. and b.

1.   Straight?line depreciation:

          Amount to be depreciated = Cost - Salvage value

          Annual depreciation expense  = Amount to be depreciated / Useful life

          Annual depreciation expense = ($26,000 - $4,000) / 4 = $5,500 per year

          Net book value at the end of the third year = $26,000 - ($5,500 * 3) = $9,500

2.   Double?declining balance depreciation:

            Straight?line rate = 1 / 4 = 25%.  Double-declining rate = 25% * 2 = 50%

				At End of Year
	Net Book Value		Depreciation	Accumulated	Net Book
Year		at Beginning of Year	Expense	Depreciation	Value
1		$26,000	$26,000 * 50% = $13,000	$13,000	$13,000
2		13,000	13,000 * 50% =     6,500	19,500	6,500
3		6,500	6,500 * 50% =     3,250#	22,750	3,250#

#   This is the calculated amount, but the net book value cannot go below salvage value, so depreciation expense in the third year is limited to $2,500, as follows:

3

6,500

2,500

22,000

4,000