Finney container company is suffering declining sales of

Assignment Help Accounting Basics

Reference no: EM13599436

Finney Container Company is suffering declining sales of its principal product, non-biodegradable plastic cartons. The president, Philip Shapeero, instructs his controller, Sharon Fetters, to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment, purchased for $2.7 million in January 2002, was originally estimated to have a useful life of 8 years and a salvage value of $300,000. Depreciation has been recorded for 2 years on that basis. Philip wants the estimated life changed to 12 years total, and the straight-line method continued. Sharon is hesitant to make the change, believing it is unethical to increase net income in this manner. Philip says, "Hey, the life is only an estimate, and I've heard that our competition used a 12-year life on their production equipment."Is the change in asset life unethical, or is it simply a good business practice by an astute president? What would you do if you were the controller?

Reference no: EM13599436

Questions Cloud

Management of the catering company would like the food : management of the catering company would like the food division to transfer 10000 cans of its final product to the

Compute the direct materials variances incurred in : bts company made 4600 bookshelves using 22700 board feet of wood costing 283750. the companys direct materials

On june 30 2009 sideways movers had 243000 in current : on june 30 2009 sideways movers had 243000 in current assets and 211000 in current liabilities. on august 1 2009

What is the book value per share of the common stock at : oxygen co. is incorporated at the beginning of this year and engages in a number of transactions. the following journal

Finney container company is suffering declining sales of : finney container company is suffering declining sales of its principal product non-biodegradable plastic cartons. the

Finney co manufactures a product requiring two pounds of : finney co. manufactures a product requiring two pounds of direct material. during 2011 finney purchases 24000 pounds of

The following information is available for lock-down : the following information is available for lock-down company which produces special-order security products and uses a

Janes corporation recorded operating data for its cheap : janes corporation recorded operating data for its cheap division for the year. janes requires its return to be 10.sales

The western division of guinn corp had an roi of 25 when : the western division of guinn corp. had an roi of 25 when sales were 2 million and controllable margin was 400000. what

User Account

All Pages