Question $4$

After the financial statements for the year $2023$ are completed, Thelma and Louise at Systrarnas Fastighetsbyr$$ discuss the valuation of the company's fixed assets in the form of office furniture and office furnishings. In the balance sheet there is a total book value of the assets which amounts to SEK $3,400,000.$ The assets have been acquired on various occasions during the years $2019-2022$ at a total acquisition value of SEK $5,000,000.$ All assets have an economic life of $10$ years.

Ignore VAT in the task.

a$)$ Explain how the company's depreciation on fixed assets has affected Systrarnas Fastighetsbyr$\text{'}$s income statement and balance sheet in the financial statements for the year $2023.$ Use the terms asset, book value and profit in your answer. Justify your answer and link the answer to concrete amounts in the scenario above.

b$)$ Assume instead that the economic life of all assets is $8$ years. Explain how the result is affected in $2023$ if the economic lifespan is $8$ years compared to if it is $10$ years. Your answer must be linked to concrete amounts in the scenario above. Use the following concepts in your answer: cost and result. Motivate your answer.