Requirement $2.$ Plumpton Inc. reports to shareholders and creditors in the financial statements using the depreciation method that maximizes reported income in the early years of

asset use. Consider the first year Plumpton Inc. uses the computer system. Identify the depreciation method that meets the company's objectives. Discuss the advantages of each

depreciation method.

The depreciation method that maximizes reported income in the first year of the computer's life is the

method, which produces the lowest

depreciation for that year. The straight$-$line method allocates the cost of the asset

over its estimated useful life.

The units$-$of$-$production method would allocate

of the cost of the asset to each of the documents produced. This method would match

The double$-$diminishing$-$balance method would allocate

of the cost of the asset to the

of its useful life when the computer would be at its

useful and

competitive stage. If the estimated life is

than anticipated due to a

efficient computer being developed, this would be the most appropriate depreciation method. This