Reference no: EM131698886

Question: On January 1, Year 1, both Alpha Company and Beta Company purchased a truck that cost $34,000. Both trucks had a five year useful life and a $4,000 salvage value. Alpha Company decided to use straight-line depreciation while Beta used the double declining balance method. All other things being equal Alpha Company would show $2,160 more net income on its Year 2 financial statements than Beta would show. Alpha Company would show $2,160 less net income on its Year 2 financial statements than Beta would show. Alpha Company would show $2,160 less in total assets on its Year 2 financial statements than Beta would show. Alpha Company would show $2,160 more in cash flow from operating activities on its Year 2 financial statements than Beta would show.