My First Accounting Position For A National Telecommunications Company

Decent Essays
Financial Statement Research
I am very excited to shine in my first accounting position for a national telecommunications company. My supervisor approached me regarding the controller’s concerns as the company profits are down for the past fiscal year compared to the last five years. Therefore, I have been asked to do the following:
• Make a simple adjustment by recalculating the depreciation from five years to ten years. Since the machine is paid, the depreciation really does not matter.
• Make an adjusting journal entry by transferring repairs and maintenance expenses to capital assets. Depreciation and Journal Expense Adjustments
Depreciation is the process of allocating the cost of an asset to expense over its useful life. It is an annual allowance for the wear and tear, deterioration or obsolescence of the property. According to the IRS, “in order for a taxpayer to be allowed a depreciation deduction for a property, the taxpayer must own the property” (IRS 2015). Therefore, the supervisor’s claim that the depreciation thing does not matter since the equipment is paid is inaccurate. We own the property; therefore, the recalculation can occur in the following circumstances:
• Wear and tear or obsolescence can indicate an inadequate or excessive equipment value, therefore the company, can change the amount of the depreciation expense.
• Additions and improvements occur which increase the operating efficiency or expected useful life of the asset. Since these
Get Access