Falling Leaves Lawn Care

Falling Leaves Lawn Care
This company purchased new excavating equipment at the beginning of Year 1. The equipment has a cost of $37,000, an estimated life of five years, and an estimated residual value of $7,000. A full year's depreciation expense is to be recorded in Year 1. The equipment was used 20,000 hours during Year 1 and 24,000 hours during Year 2. The number of expected hours over five years is 100,000.
-Refer to the figure Falling Leaves Lawn Care.The company is comparing the straight-line and double-declining-balance depreciation methods.Of these two methods,which will create the larger expense and the larger tax savings in Year 1?

A) Straight-line depreciation creates the larger expense; double-declining-balance depreciation creates the larger tax savings.
B) Straight-line depreciation creates both the larger expense and the larger tax savings.
C) Double-declining-balance depreciation creates both the larger expense and the larger tax savings.
D) Double-declining-balance depreciation creates the larger expense; straight-line depreciation creates the larger tax savings.