Mark Cary, the owner of Cary Trucking Company, initiated an executive bonus plan for his chief executive officer (CEO). The new plan provides a bonus to the CEO equal to 3% of the income before taxes. Upon learning of the new bonus arrangement, the CEO issued instructions to change the company's accounting for trucks.
The CEO has asked the controller to make the following two changes:
a. Change from the double-declining-balance method to the straight-line method of depreciation.
b. Add 50% to the useful lives of all trucks.
Why did the CEO ask for these changes? How would you respond to the CEO's request?