What is the effect of tylers proposed change on income

Reference no: EM131053886

Question:

Fresh Air Anti-Pollution Company is suffering declining sales of its principal product, non-biodegradable plastic cartons. The president, Tyler Weber, instructs his controller, Robin Cain, to lengthen asset lives to reduce depreciation expense. A processing line of automated plastic extruding equipment, purchased for $3.5 million in January 2014, was originally estimated to have a useful life of eight years and a salvage value of $400,000. Depreciation has been recorded for two years on that basis. Tyler wants the estimated life changed to 12 years total and the straight-line method continued. Robin is hesitant to make the change, believing it is unethical to increase net income in this manner. Tyler says, "Hey, the life is only an estimate, and I've heard that our competition uses a 12-year life on their production equipment."

- Who are the stakeholders in this situation?

- Is the proposed change in asset life unethical, or is it simply a good business practice by an astute president?

- What is the effect of Tyler's proposed change on income before taxes in the year of change?

Reference no: EM131053886

Questions Cloud

How many times would we have to perform a fetch : That is, the reorganization cost and subsequent search cost are less than the search cost before reorganization. Support your answer. Assume s = 16 ms, rd = 8.3 ms, and btt = 1 ms.

Monthly linear production possibility frontier : France and Poland each have one worker whose monthly linear Production Possibility Frontier indicates the following production possibilities:

Security threats to mobile devices and countermeasures : Select a topic from the list and conduct research (based on literature, at least three recent research papers) and prepare a summary report with brief supportive descriptions to post on the forum/blog

Opportunity cost of producing a capital good : 1. What is the opportunity cost of producing a capital good such a new road? 2. In economic terminology, what is the meaning of investment?

What is the effect of tylers proposed change on income : Who are the stakeholders in this situation and is the proposed change in asset life unethical, or is it simply a good business practice by an astute president?

Determine the type of information needed in the file header : Write program code to access individual fields of records under each of the following circumstances. For each case, state the assumptions you make concerning pointers, separator characters, and so on.

Explain elasticity of demand : Explain elasticity of demand. Please present a simple example of this property.

Dollar increase in investment then the multiplier : If C=100 + (2/3)DI, How much will saving increase after a permanent tax cut of $600 billion? If the shift in the C+ I + (X-IM) was caused by an 80 dollar increase in investment then the multiplier is?

Movements practiced during the manual material handling : Write down 5 common bad postures and movements practiced during the manual material handling, discuss possible ergonomic issues/injuries due to poor posture and movement, and suggest possible solution for each cases.

User Account

All Pages