Wind Chime and Fire Hut Companies purchased identical equipment having an estimated useful life of ten years. Wind Chime uses the straight-line depreciation method and Fire Hut uses the double-declining-balance method of depreciation. Assuming the two entities are similar in all other respects, which of the following statements is correct?
a. Wind Chime's depreciation expense will be greater in the second year than Fire Hut's depreciation expense.
b. Fire Hut's book value will be greater than Wind Chime's book value at the end of year one.
c. Wind Chime's net income will be greater than Fire Hut's net income in year nine.
d. Fire Hut's book value will be less than Wind Chime's book value at the end of year two.
d
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a. blatant b. embarrassing *c. subtle d. easily forgotten
Fact Pattern 28-1ADollar Value Motors asks Estimable Bank for a loan to increase its vehicle inventory. Estimable requires Flair, Dollar Value's president, sign a personal guaranty to pay the debt if Dollar Value defaults. Meanwhile, to buy a pick-up truck from Dollar Value, Gina asks Harper to co-sign a credit application.Refer to Fact Pattern 28-1A. If Harper signs the application only after language is included that requires Dollar Value to exhaust its legal remedies against Gina before looking to her, then Harper is
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The realities of international marketplace and the recognition of the importance reducing uncertainty have persuaded many courts: I. To accept choice of law and forum clauses in international contracts II. To require mandatory arbitration clauses in international contracts A) Both I and II
B) Neither I nor II. C) I only. D) II only.