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The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to
The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can make it difficult for a financial analyst to compare periodic performance from firm to firm. Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the doubledeclining balance depreciation method. Company B uses the straightline method. You have the following information taken from the yearend financial statements for Company B: balance depreciation method. Company B uses the straightline method. You have the following information taken from the yearend financial statements for Company B: You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $ represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are zero. Required: In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets. If Company decided to switch depreciation methods in from the straight line to the doubledecliningbalance method, prepare the been recorded. You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that all of the $ represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are zero. Required: In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets. If Company B decided to switch depreciation methods in from the straight line to the doubledecliningbalance method, prepare the journal entry to record depreciation for the year, assuming no journal entry for depreciation in has yet been recorded. Complete this question by entering your answers in the tabs below. In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets.
The fact that generally accepted accounting principles allow companies flexibility in choosing between certain allocation methods can
make it difficult for a financial analyst to compare periodic performance from firm to firm.
Suppose you were a financial analyst trying to compare the performance of two companies. Company A uses the doubledeclining
balance depreciation method. Company B uses the straightline method. You have the following information taken from the
yearend financial statements for Company B:
balance depreciation method. Company B uses the straightline method. You have the following information taken from the
yearend financial statements for Company B:
You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that
all of the $ represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are
zero.
Required:
In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the
doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets.
If Company decided to switch depreciation methods in from the straight line to the doubledecliningbalance method,
prepare the been recorded.
You also determine that all of the assets constituting the plant and equipment of Company B were acquired at the same time, and that
all of the $ represents depreciable assets. Also, all of the depreciable assets have the same useful life and residual values are
zero.
Required:
In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the
doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets.
If Company B decided to switch depreciation methods in from the straight line to the doubledecliningbalance method,
prepare the journal entry to record depreciation for the year, assuming no journal entry for depreciation in has yet
been recorded.
Complete this question by entering your answers in the tabs below.
In order to compare performance with Company A estimate what Bs depreciation expense would have been for if the
doubledecliningbalance depreciation method had been used by Company B since acquisition of the depreciable assets.
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