Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjusting entries for annual financial statements. Boland computes depreciation and records it as
Required
1. How should depreciation be recorded? Do you support Boland or Smith?
2. Evaluate the strengths and weaknesses of Smith’s reasons for preferring her method.
3. Indicate whether the situation Boland faces is an ethical problem. Explain.
Answer Sub Part 1
Depreciation should be recorded in the way M/s B has calculated and prepared the entry by way of debiting the depreciation expense account and crediting the accumulated depreciation account.
Answer Sub Part 2
Mr. S wants to credit the depreciation directly to the equipment account. The above method has following advantages and disadvantages:
Advantages
a. Less time required as accumulated depreciation account is not required to be maintained.
b. Balance sheet will show the same results hence it will make it more concise.
Disadvantages
a. No Compliance with Generally Accepted Accounting Principles
b. The balance sheet holders do not get complete information of the book value and accumulated depreciation amount.
Answer Sub Part 3
M/s B is faced with an ethical situation as she is being asked by her manager to present the balance sheet in a manner which does not comply with the statutory requirements. The method suggested by the manager of not disclosing the accumulated depreciation and presenting the equipment value on net basis is not correct and will not provide complete details to the balance sheet readers, hence M/s B is in an ethical conflict where if she presents the balance sheet in the manner directed by her Manager she would be providing incomplete information in the balance sheet.
Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjusting...
Jessica Boland works for Sea Biscuit Co. She and Farah Smith, her manager, are preparing adjusting entries for annual financial statements. Boland computes depreciation and records it as:Depreciation Expense — Equipment . . . . . . . . . . . . . . . 123,000 Accumulated Depreciation — Equipment . . . . . . . . . 123,000 Smith agrees with her computation but says the credit entry should be directly to the Equipment account. Smith argues...
Jackie Houston is a new accountant for Seitzer Company. She is learning on the job from Bob Welch, who has already worked several years for Seitzer. Jackie and Bob are preparing the year-end adjusting entries. Jackie has calculated that depreciation expense for the fiscal year should be recorded as: Depreciation Expense, Equipment.................. 123,546 Accumulated Dep., Equipment...................... 123,546 Bob is rechecking the numbers and says that he agrees with her computation. However, he says that the credit entry should be made...
First, read the article on "The Delphi Method for Graduate Research." ------ Article is posted below Include each of the following in your answer (if applicable – explain in a paragraph) Research problem: what do you want to solve using Delphi? Sample: who will participate and why? (answer in 5 -10 sentences) Round one questionnaire: include 5 hypothetical questions you would like to ask Discuss: what are possible outcomes of the findings from your study? Hint: this is the conclusion....