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5 starts and a thumbs up for best answer thanks!! Company A and Company B have identical results (e.g. their income statement is exactly the
5 starts and a thumbs up for best answer thanks!!
Company A and Company B have identical results (e.g. their income statement is exactly the same) with the exception of their depreciation method. Company A uses the straight-line method, while Company B utilizes double declining balance. Assume no prior assets are being depreciated. Company A and B each: January 1, Year 1: Purchase equipment of $100, 000. 4 year expected life. Salvage value of $20, 000. April 1, Year 2: Purchase a truck for $50, 000. 5 year life. No salvage value. What is the difference in Company A and B's Year 1 AND Year 2 net income? Please show your calculationsStep by Step Solution
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