At the beginning of 2011, the healthy life food company purchased equipment for 42M to be used in the manufacture of a new line of gourmet frozen fods. the equimpent was estimated to have a 10 year service life and no residual value. the stright line depreciation method was used to measure deprectation for the 2011 and 2012

late in 2013 it became apparent production for 2 more years(2014 and 2015) and then discontinue the line at theat time, the equiptment will be sold for miima scarp value.

the controller Heather Meyer was asked by harvey Dent the cimpany's chief exe officer to determine the appropriate treatment fo the change in service life of the equipment, Heather determined that there has been an impairment of value requiring an immediate write-down of the equipment. of 12900,000 The remaining book value would then be depreciated over the equipment revised service life.

The CEO doesnt like Heather's conclusion becuase of the effect it would have on 2013 income, "Looks l ike a simple revision in the service life from 10 years to 5 years to me" Dent concluded "Lets go with that way,Heather"

Required

1- What is the difference in before-tax income between the CEO'S and Heather's treatment of the sitatuion?

2-Discuss Heather Meyer's ethical dilemma