How would an organization prevent the kind of fraud

Assignment Help Finance Basics

Reference no: EM131819513

Question: Jim Reed manages a fleet of utility trucks for a rural county government. He's been in his job for 30 years, and he knows where the angles are. He makes sure that when new trucks are purchased, the residual value is set as low as possible. Then, when they become fully depreciated, they are sold off by the county at residual value. Jim makes sure his buddies in the construction business are first in line for the bargain sales, and they make sure he gets a little something back. Recently, a new county commissioner was elected with vows to cut expenses for the taxpayers. Unlike other commissioners, this man has a business degree, and he is coming to visit Jim tomorrow.

Requirements: 1. When a business sells a fully depreciated asset for its residual value, is a gain or loss recognized?

2. How do businesses determine what residual values to use for their various assets? Are there "hard and fast" rules for residual values?

3. How would an organization prevent the kind of fraud depicted here?

Reference no: EM131819513

Questions Cloud

How we value all individuals unique talents and respect : Employee's now have a constitutionally-protected freedom to associate with whomever he or she chooses based of a term called employment at will.

Determine the amortization expense for the first two years : Determine the amortization expense for the first two years using the Straight-line method and Declining-balance method at the rate of 150%

What is the adjusted basis in the home : Payton purchased his home for $300,000. As a sole proprietor, he operates a certified public accounting practice. What is the adjusted basis in the home?

Why is the cost of college increasing : Why is the cost of college increasing? Three reasons why. What can the University administration do to control tuition?

How would an organization prevent the kind of fraud : Jim Reed manages a fleet of utility trucks for a rural county government. He's been in his job for 30 years, and he knows where the angles are.

Current market values of steinberg equity and debt : What are the current market values of Steinberg's equity and debt?

Basis of national income per capita : What are the four categories used by the World Bank to classify nations on the basis of national income per capita? Identify any two nations.

What would the impact of the increase in retail store sales : Assume that if hospital supplies were dropped, retail store sales would increase by 25%. What would the impact of the increase in retail store sales

Calculate nominal gdp for 1997 : Determine whether there was a recession in 1998 assume that when an aggregate increases/decreases from one year to the next

User Account

All Pages