Reference no: EM132329237

Question :

Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the double-declining-balance depreciation method. Company B uses the straight-line method. You have the following information taken from the December 31, 2018 year-end financial statements for Company B:

Income Statement	Balance Sheet
	Assets:
	Plant & Equipment, at cost	$200,000
Depreciation Expense $ 10,000	Less: Accumulated Depreciation	(20,000)
	Total PP&I (Net)	$180,000

You also determine that all of the PP&E assets of Company B were acquired at the same time, have the same useful life and the salvage values are zero. In order to compare performance with Company A, estimate what B's depreciation expense would have been for 2018 if the double-declining-balance depreciation method had been used by Company B since acquisition of the depreciable assets.