Unformatted text preview: use the equipment in other projects later, Alice wondered to herself. Required: 1. Assuming that the equipment was purchased at the beginning of 2011, by how much would Alices treatment of the equipment increase before tax earnings as opposed to expensing the equipment cost? Answer: If Alice capitalizes the equipment for Mayer Biotechnical, Inc purchased she would be overstating assets on the balance sheet by $24million. 2. Discuss the ethical dilemma Alice faces in determining the treatment of the $30 million equipment purchase. Answer: The ethical dilemma Alice faces is that by capitalizing the equipment she will knowingly be overstating the Balance sheet and although it will make Mayer Biotechnical, Inc. look better than it actually does, facilitating maybe more investors or loans, it is not accurate and therefore unethical....
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- Spring '11
- Ethics , Alice Cooper, ethical dilemma Alice