Ph1IP2 VanOldorNew - Phase 1 Individual Project 2 1 Running...

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Unformatted text preview: Phase 1 Individual Project 2 1 Running Head: PHASE 1 INDIVIDUAL PROJECT 2: VAN, OLD OR NEW Phase 1 Individual Project 2: Van, Old or New Chris Normand Colorado Technical University Accounting 202-02 Prof. Robyn Swinehart April 12, 2010 Phase 1 Individual Project 2 2 Abstract The purpose of this paper is to use a fictional company with a fictional situation to show what accounting measures and methods should be used, as their accountant, in helping them either secure a new van for their company, or repair their old van and add useful life to it as a company asset. I will do this in the form of a narrative from my company to theirs. Phase 1 Individual Project 2 3 Phase 1 Individual Project 2: Van, Old or New To Good Time Adventures To whom it may concern: Mr. Smith has asked me to review your situation concerning the need to either replace the depreciated asset, the 10-passenger van, or repair the old van and make necessary adjustments to your accounting records. Of course, in the end, I can only make suggestions. It is up to you to decide what you believe is in the best interest of your business. However, I believe, after we take a closer examination of all the options and avenues available to you, you will be more equipped to make that decision wisely and confidently. It is my understanding that the asset (10-passenger van) is completely depreciated and has a salvage value of $5,000.00. I also understand that you have looked at a new van which you are considering to replace the old 10-passenger van and that the dealer has made you and offer of $6,000.00 trade-in value on your old van toward the purchase of the new van. Let us start by examining the option to keep the existing van you now have and make the necessary maintenance and extraordinary repairs to it to extend its useful life another five years. The following is a table representing the extend its useful life another five years....
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This note was uploaded on 08/22/2010 for the course ACCOUNTING Acct202 taught by Professor Swinehart during the Spring '10 term at Colorado Technical University.

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Ph1IP2 VanOldorNew - Phase 1 Individual Project 2 1 Running...

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