Develop your argument, Use logic and the accounting

Develop your argument

Reference no: EM132918167

Question

American Movieplex, a large movie theater chain, leases most of its theater facilities. In conjunction with recent operating leases, the company spent $28 million for seat and carpeting. The question being discussed over breakfast on Wednesday morning was the length of the depreciation period for these leasehold improvements. The company controller, Sarah Keene, was surprised by the suggestion of Larry Person, her new assistant.

Keene: Why 25 years? We've never depreciated leasehold improvements for such a long period.

Person: I noticed that in my review of back records. But during our expansion to the Midwest, we don't need expenses to be any higher than necessary.

Keene: But isn't that a pretty rosy estimate of these assets' actual life? Trade publications show an average depreciation period of 12 years.
Original Post* Stance:

Read through the dilemma. For the Original Post*, you will be arguing in favor of Larry Person's proposal to increase the depreciation period for leasehold improvements. Remember to use logic and the accounting principles you have learned thus far to develop your argument. You must include at least three points as to why this route is the best route to go (with one of those points being related to the learned accounting principles).

Reference no: EM132918167

Questions Cloud

Consequences of erp implementation : Right Choice Movers and Packers is a company which is providing the service of Moving all of the equipment from your place to a new place where the person has p

Example of the synthesis : Could you give me an example of the Synthesis of the two leading online food delivery in the Philippines, which are Food Panda and grab food?

Personal data protection commission : Potential data breach after travel agency employee loses hard disk The authorities are investigating a potential data breach after a travel agency employee lost

What does the layout tab in pivot chart do : What does the Layout tab in Pivot Chart do?

Develop your argument : Use logic and the accounting principles you have learned thus far to develop your argument. You must include at least three points as to why this route

Competitive advantage of integrated resort : What's the competitive advantage of Integrated Resort compare to traditional hotel business model? (Comparing Integrated Resort like Macau Venetian vs Tradition

Determine the proceeds of the sale : Determine the proceeds of the sale on a seven-year noninterest-bearing promissory note for $1,600, discounted 45 months before its due date at a discount rate o

Explain the importance of organizational culture : Explain the importance of organizational culture with regards to MacDonalds company.

How much interest has your investment earned so far : Your investment of $9,000 that you started six years ago earned 7.3% compounded quarterly for the first 3¼ years, followed by 8.2% compounded monthly after that

User Account

All Pages