On January 1,2011,XYZ Company bought a new,$2,000,000 mainframe computer.Because of rapid changes in technology and XYZ's plans for growth,the computer has only a five-year useful life and no salvage value.The chief financial officer for XYZ has decided that the company should depreciate the computer using the straight-line method rather than the double-declining balance method.
1.Calculate depreciation expense for 2011 using the straight-line method.
2.Calculate depreciation expense for 2011 using the double-declining balance method.
3.What would the difference be in 2011 net income for XYZ if it chooses the straight-line method rather than double-declining balance?
4.Is it ethical for the chief financial officer to choose the straight-line method?

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The Answer of On January 1,2011,XYZ Company bought a new,$2,000,000 mainframe computer.Because of rapid changes in technology and XYZ's plans for growth,the computer has only a five-year useful life and no salvage value.The chief financial officer for XYZ has decided that the company should depreciate the computer using the straight-line method rather than the double-declining balance method.
1.Calculate depreciation expense for 2011 using the straight-line method.
2.Calculate depreciation expense for 2011 using the double-declining balance method.
3.What would the difference be in 2011 net income for XYZ if it chooses the straight-line method rather than double-declining balance?
4.Is it ethical for the chief financial officer to choose the straight-line method?

On January 1,2011,XYZ Company Bought a New,$2,000,000 Mainframe Computer