Identical equipment having estimated service life

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Reference no: EM131260198

Companies A and B purchased identical equipment having an estimated service life of 10 years. Company A uses double-declining balance method, and Company B uses the straight-line method. Assuming the companies are identical in all other respects, which statement is true? a. Depreciation expense for Company A will be lower in the first year than for Company B b. Net income will be higher for Company A in the ninth year than for Company B. c. Company B will record more depreciation on this asset over the entire 10 years than will Company A. d. At the end of the third year, the book value of the asset will be lower on the books of Company A than on the books of Company B. e. All of the above statements are correct.

Reference no: EM131260198

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