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P2-2 Fusters, Inc., provides audited financial statements to its creditors and is required to maintain certain covenants based on its debt to equity ratio and return on assets. In addition, management of Fusters receives a bonus partially based on revenues for the year. Information related to Fusters, Inc., follows. 1. Depreciation expense on the building for the year was $45,000. Because the building was increasing in value during the year, the controller decided not to record any depreciation expense in the current year. 2. New legislation was discussed by the government that would require new pollution control technology for com- es such as Fusters. Prior to this, Fusters had been complying with all current requirements and otherwise believed that it was acting in an environmentally responsible manner. In anticipation of this legislation being pani passed next year, Fusters expects it will need to upgrade its equipment and has booked the following entry 121.000 121 Equipment Accounts Payable 121,000 85,000, recognizing a gain of $45,000. Because the believed that new equipment would be needed in the near future, the controller decided to defer the 3. During the year, the company sold certain equipment for S2 controller gain and amortize it over the life of the new equipment that would soon be purchased. n order for $61,500 was received from a customer on January 2, 2017, for products on ha shipped f.o.b. shipping point on January 9,2017. The company made the following entry for 2016: nd. This order was 4. A 61,500 Accounts Receivable Sales Revenue 61,500 Instructions (a) Discuss the reporting objectives of the users of Fusters' financial statements. rs' accounting procedures and their impact on the company's financial (b) Comment on the appropriateness of Fuster ETHICS (c) Discuss whether there are alternatives available under IFRS to provide the reporting desired by Fusters statement users, applying the current conceptual framework. ' management. P2-2 Fusters, Inc., provides audited financial statements to its creditors and is required to maintain certain covenants based on its debt to equity ratio and return on assets. In addition, management of Fusters receives a bonus partially based on revenues for the year. Information related to Fusters, Inc., follows. 1. Depreciation expense on the building for the year was $45,000. Because the building was increasing in value during the year, the controller decided not to record any depreciation expense in the current year. 2. New legislation was discussed by the government that would require new pollution control technology for com- es such as Fusters. Prior to this, Fusters had been complying with all current requirements and otherwise believed that it was acting in an environmentally responsible manner. In anticipation of this legislation being pani passed next year, Fusters expects it will need to upgrade its equipment and has booked the following entry 121.000 121 Equipment Accounts Payable 121,000 85,000, recognizing a gain of $45,000. Because the believed that new equipment would be needed in the near future, the controller decided to defer the 3. During the year, the company sold certain equipment for S2 controller gain and amortize it over the life of the new equipment that would soon be purchased. n order for $61,500 was received from a customer on January 2, 2017, for products on ha shipped f.o.b. shipping point on January 9,2017. The company made the following entry for 2016: nd. This order was 4. A 61,500 Accounts Receivable Sales Revenue 61,500 Instructions (a) Discuss the reporting objectives of the users of Fusters' financial statements. rs' accounting procedures and their impact on the company's financial (b) Comment on the appropriateness of Fuster ETHICS (c) Discuss whether there are alternatives available under IFRS to provide the reporting desired by Fusters statement users, applying the current conceptual framework. ' management