The board of directors of Wentzville Corporation is reviewing the 20X1 annual report. A new board member-a
Question:
The board of directors of Wentzville Corporation is reviewing the 20X1 annual report. A new board member-a professor-questions the company accountant about the depreciation amounts. The professor wonders why depreciation expense has decreased from $200,000 in 19X9 to $184,000 in 20X0 to $172.000 in 20X1. He states that he could under- stand the decreasing annual amounts if the company had been selling properties each year. but that has not occurred. Further. growth in the city is increasing the values of property. Why is the company recording depreciation when property values are increasing? Required Write a paragraph or two to explain the concept of depreciation and answer the professor's questions. Which depreciation method does Wentzville appear to be using?
Step by Step Answer:
Accounting
ISBN: 9780130906991
5th Edition
Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones