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Problem #1 : Depreciation (4 points) Company A and Company B have identical results (e.g. their income statement is exactly the same) with the exception
Problem #1 : Depreciation (4 points) 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 calculations
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