Mondova Corporation Began Operations on January 1 Note 1: Equipment Was Purchased on January 1

Mondova Corporation began operations on January 1. Below is Mondova's current net income statement and December 31 balance sheet calculated using straight-line depreciation.
$\begin{array}{lr} \underline{\text { Income Statement }}\\ \text { Sales revenue } & \$ 20,000 \\\text { Cost of goods sold } &\underline{ 9,000} \\\text { Gross profit } & \$ 11,000 \\\text { Depreciation (Note 1) } &\underline{ 3,000} \\\text { Net income } &\underline{ \$ 8,000}\\\\\text { Balance Sheet } & & \\\text { Current assets } & & \$ 44,000 \\\text { Equipment } & \$ 20,000 & \\\text { Accumulated depreciation } & \underline{3,000} & \underline{ \$ 17,000} \\\text { Total assets } & & \underline{ \$ 61,000}\\\\ \text { Liabilities (all current) } && \underline{\$45,000}\\ \text { Shareholders' equity } && \underline{16,000}\\ \text {Total liabilities \& shareholders' equity } && \underline{\$61,000}\\\end{array}$
Note 1: Equipment was purchased on January 1. Straight-line depreciation method was used with an estimated economic life of 5 years.
A. Determine the estimated salvage value of the equipment being depreciated using the straight-line method.
B. Prepare an income statement and balance sheet in the same format as presented above assuming that Mondova Corporation uses the double-declining-balance depreciation method. The equipment has an estimated economic life of 5 years.
C. Calculate and compare Mondova's December 31 current ratio, debt/equity ratio, and debt to assets ratio using the financial statements constructed using the straight-line and double-declining-balance methods of depreciation.