Plant Assets Ethics Activity STUDENT QUESTION

Plant Assets Ethics - matter because the machine has already been paid for In addition your supervisor gives you an adjusting journal entry to

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Plant Assets Ethics Activity Chapter 9 You have just landed an accounting position with a national telecommunications company. Because this is your first job you are eager to please your co-workers and your supervisor who works closely with the controller. However, your supervisor has just paid you a visit. She told you that the controller is concerned that profits for the last fiscal year are much less than profits in the preceding five years. The controller has asked that depreciation on a machine purchased at the beginning of last year be recalculated. The machine has a five-year useful life and is depreciated using the straight-line method. The controller has asked that the machine be depreciated over a ten-year useful life. Your supervisor contends that the "depreciation thing" really doesn't
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: matter because the machine has already been paid for. In addition, your supervisor gives you an adjusting journal entry to correct what she calls “expense transfers”. This entry transfers items originally recorded as repairs and maintenance to capital assets. 1. Do you agree with the supervisor regarding the change in the estimated useful life of the machine? Why or why not? 2. Are you going to recalculate the depreciation and change the entry? Why or why not? 3. What is the proper accounting treatment for: (1) repairs and maintenance and (2) plant assets? 4. What is your supervisor trying to accomplish with the suggested “expense transfers” entry? What would be your course of action regarding the suggested entry?...
View Full Document

This note was uploaded on 03/30/2012 for the course ACCT 101 taught by Professor Rives during the Spring '12 term at Coastline Community College.

Ask a homework question - tutors are online