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On January 1 of 2018, a company acquired and placed in service a machine at a cost of $162,000. It has been estimated that the
On January 1 of 2018, a company acquired and placed in service a machine at a cost of $162,000. It has been estimated that the machine has a service life of six years and no salvage value.
Required:
- Calculate the depreciation expense using the double declining balance method for the first two years.
- Calculate the depreciation expense using the straight line method for the first two years
- Which method will result on higher net income for the first year of operation, explain your answer?
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