Describe how the write-off of a technology system

Assignment Help Financial Accounting

Reference no: EM131202287

When Burlington Norther releases first quarter earnings below those of the same period for the prior year, managemment explained the reasons behind the shortfall. While revenues increased, mainly due to higher prices, earnings were down due to increased expenses, including a charge for the write-off of an outdated technology system.

A. Describe how the write-off of a technology system would affect the basic accounting equation and the financial statements.

B. What factors could lead to a company determining that its technology was overvalued?

C. Discuss how management might be able to manage earnings through such a write-off.

Reference no: EM131202287

Questions Cloud

Target costing and cost analysis for pricing decisions : Managerial Accounting (9th edition) by Hilton Chapter 15 Target Costing and Cost Analysis for Pricing Decisions 681 Case 15-48 Gargantuan Industries is a multiproduct company with several manufacturing plants. What unit selling price should Gargantua..

Materials price and quantity variances : Dawson Toys, Ltd., produces a toy called the Maze. The company has recently established a standard cost system to help control costs and has established the following standards for the Maze toy: Direct materials: 6 microns per toy at $0.33 per micron..

Calculate the breakeven point in units : Lester Company manufactures a single product. Each unit sells for $15. The firm's projected costs are listed below: Variable costs per unit: Direct Material Direct Labor Variable Mfg. Calculate the Breakeven Point in Units and in Dollars. Calculate h..

Differ from the actual variable overhead cost : Logistics Solutions provides order fulfillment services for dot.com merchants. The company maintains warehouses that stock items carried by its dot.com clients. According to the standards, what variable overhead cost should have been incurred to fill..

Describe how the write-off of a technology system : When Burlington Norther releases first quarter earnings below those of the same period for the prior year, managemment explained the reasons behind the shortfall. Describe how the write-off of a technology system would affect the basic accounting equ..

Prepare a schedule of expected cash collections : The president of the retailer Prime Products has just approached the company’s bank with a request for a $30,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Prepare a schedule of expected cash collections ..

Overstatement and understatement of retained earnings : Elliot Corp failed to record accrued salaries for 2013, of $2,000, for 2014 of $2,100 and for 2015 of $3,900. What is the amount of the overstatement and understatement of Retained earnings at December 31, 2016? Management has decided to switch from ..

The investment was accounted for using the equity method : Simmons Corporation owns stock of Armstrong, Inc. Prior to 2014, the investment was accounted for using the equity method. In early 23014, Simmons sold part of its investment in Armstrong, and began using the fair value method. In 2014, Armstrong ear..

Two accounting treatments on the financial statements : The 2012 annual report of Cisco Systems discloses that the company expenses all advertising and research and development costs, while capitalizing all software development cost. Describe the effect of these two accounting treatments on the financial ..

User Account

All Pages