Problem buster container company is suffering declining

Assignment Help Accounting Basics

Reference no: EM13571028

Problem: Buster Container Company is suffering declining sales of its principal product, nonbiodegradeable plastic cartons. The president, Dennis Harwood instructs his controller, Shelly McGlone, to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment, purchased for 3.1 million in January 2012, 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. Dennis wants the estimated life changed to 12 years total, and the straight-line method continued. Shelly is hesitant to make the change, believing it is unethical to increase net income in this manner. Dennis says, Hey, the life is only an estimate, and i've heard that our competition uses a 12 year life on thier production equipment.
What is the effect of Dennis Harwood's proposed change on income before taxes in the year of change??

Reference no: EM13571028

Questions Cloud

Vaughn company which uses a periodic inventoy system had a : 1. given the following information calculate the amount of cash finallly remitted by the customer on feb 212. vaughn

Your paper should explain and develop the aspects of a : your paper should explain and develop the aspects of a particular idea concept or argument covered in the readings i.e.

Provide the journal entries recorded by magellan during : magellan corporation acquired 80 percent ownership of dipper corporation on january 1 20x8 for 200000. at that date

In a short 2-3 page paper explain why the history and : you can choose one of the following two topics to write about1 all students of history have a fascination with roman

Problem buster container company is suffering declining : problem buster container company is suffering declining sales of its principal product nonbiodegradeable plastic

On january 1 20x7 jones company acquired 90 percent of the : on january 1 20x7 jones company acquired 90 percent of the outstanding common stock of smith corporation for 1242000.

The following selected transactions occurred for : the following selected transactions occurred for bleumortier corporation. the company has a march 31 year end and

Eki explain all you konw about the concept of drug : explain all you konw about the concept of drug revolving fund drf in nigeria and how this drug revolving can be

Snoopy co sold equipment to peanut co for a 42000 gain on : peanut company acquired 75 percent of snoopy companys stock at underlying book value on january 1 20x8. at that date

User Account

All Pages