How the choice of depreciation method affects

Assignment Help Financial Accounting
Reference no: EM13180170

Diversified Rentals Ltd owns a large fleet of different vehicles which are each classified into one of three categories; supercars, vans and city rentals. Newly acquired supercars are very popular when first acquired, but rental demand quickly falls as newer models are released. Supercars are kept in the fleet for 3 years before being sold. Demand and rental revenues for vans are relevantly consistent through the vehicle life, regardless of condition or appearance. The vans are disposed of only when they are completely worn out. The vans are generally completely worn out once they have travelled 350,00km. Finally the demand and revenues for city rentals are relatively consistent up until a point when customers demand vehicles with higher safety standards and Diversified Rentals Ltd is required to dispose of these vehicles. The new chief financial officer of the firm requires advice on which depreciation method to use. Provide recommendations and justifications of which depreciation method(s) are appropriate in this case. Explain how the choice of depreciation method affects reported profits.

Reference no: EM13180170

Questions Cloud

Find the shaded area : semicircles are placed on the sides of an equilateral triangle with sides 10.1 feet. find the shaded area. with this problem the whole thing is shaded.
What does the slope of this line represent : Imagine that a line on a Cartesian graph is approximately the distance y in feet a person walks in x hours. What does the slope of this line represent? How is this graph useful? Provide another example for your colleagues to explain.
How many cards did fred originally have : Fred gave one half of his baseball cards to Sally. Sally gave Jeff half of the cards that she got from Fred. Jeff gave Allen half of the cards that he got from Sally. Allen got 6 cards. How many cards did Fred originally have? PLEASE SHOW CALCULAT..
Determine the domain and the range of the function : Determine the domain and the range of the function
How the choice of depreciation method affects : Provide recommendations and justifications of which depreciation method(s) are appropriate in this case. Explain how the choice of depreciation method affects reported profits.
Find the probability that xth opportunity is a close call : Combining the information above, find the probability that the xth opportunity is a close call (that it occurs immediately before the nth shock).
Find the area of the region outside the first curve : Given the curves r=2sin(θ) and r=2sin(2θ), 0 ≤ θ ≤ π2, find the area of the region outside the first curve and inside the second curve.
Explain how the perpetual and periodic inventory systems : Explain how the perpetual and periodic inventory systems differ, especially in determining Cost of Goods Sold and Ending Inventory and how can the choice of the inventory costing method impact reported profits?
What is the sample space : What is the Sample Space? and Find the sets corresponding to the events: A = "hand is in the first four hours." B = "Hand is between 2nd and 8th hours inclusive"; and D = "hand is in an odd hour"?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement effects of fifo and lifo

Inventory on hand at December 31, 2009, consisted of 40,000 units valued at $3.00 each - would have different amounts for 2011 if LIFO rather than FIFO had been used, and state the new amount for each account that is named

  What are the nal and the irr of the lease

. tentative lease terms for payments of $500,00 at the end of each year. the salvage value for the computer is $300,000. What are the NAL and the IRR of the lease? Interprete each value

  What is the maximum price sal would be willing to pay

If Sal purchases the component from the supplier instead of manufacturing it, the effect on income would be? What is the maximum price Sal would be willing to pay the outside supplier?

  Average cost per diner for serving

Convert the total costs you computed to costs per diner. Average cost per diner for serving each of the following parties A party of four diners who three drinks in total.

  Determine the company degree of operating leverage

Determine the company degree of operating leverage. and Using the degree of operating leverage, estimate the impact on net income of a 5% increase in sales.

  Using the cost model evaluate the amount

Using the cost model, at what amount could the land be reported in the statement of financial position of Jeng Ting Ltd for each reporting date? Describe your answers.

  Difference between pre-control and post-control transactions

Demonstrate an ability to provide eliminating as well as adjusting entries in the preparation of consolidated worksheets and understand the difference between pre-control and post-control transactions.

  What else might you consider

If you were looking at two companies and one had a large amount of debt and the other didn't, would you choose the one without debt? Always? What else might you consider?

  What is percy''s cost of common equity

What is percy's cost of common equity - Percy Motors has a target capital structure of 40% debt and 60% common equity, with no preferred stock

  Evaluate pacific internal control system

Evaluate Pacific's internal control system and indicate which principles of internal control appear to have been ignored.

  Improvement of the existing communication system

Management contends that the device merely represents an improvement of the existing communication system of the satellite and so should be capitalized

  What drives consumption of costs

Cost allocations have to make sense. What drives consumption of costs? What are drivers and how do they help in the allocation process?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd