Supernova purchased equipment for cutting and processing jeans at the beginning of the year. The total cost of the equipment is $250,000. The equipment is expected to have a useful life of 10 years and have no residual value. Molly, Supernova's accountant, wonders what the impact would be of depreciating equipment using the straight-line method instead of the double-decreasing method the company uses for its other machines. The company depreciates new purchases for a full year in the year of purchase.

At the end of the first year, what would be the dollar amount of the change in net income if the straight-line method was used hypothetically instead of using the double declining method in the first year of depreciation? Please indicate only the absolute amount of change in net income.

Answer rating: 100% (QA)

Depreciation Straightline method Double declining method 250... View the full answer