Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN: 9781337788281

Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher: Cengage Learning

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Textbook Question

Chapter 11, Problem 4C

Depreciation continues to be one of the most controversial, difficult, and important problem areas in accounting.

Required:

1. Explain the conventional accounting concept of depreciation accounting, and discuss its conceptual merit with respect to (a) the value of the asset, (b) the amount(s) expensed, and (c) the discretion of management in selecting the method.
2. Answer the following:
1. a. Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial reporting purposes. (Ignore income tax considerations for this case.)
2. b. What depreciation methods might be used for the computer system?

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Chapter 11, Problem 3C

Chapter 11, Problem 5C

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Depreciation continues to be one of the most controversial, difficult, and important problemareas in accounting 1. Explain the conventional accounting concept of depreciation accouting，and discuss its conceptual merit with respect to ( a) the value of the asset, (b) the amount( s) expensed, an ( c) the discretion of management in selectin g the method. 2. Answer the following: a. Explain the factors that should be considered when applying the conventional concept of depreciation to the determination of how the value of a newly acquired computer system should be assigned to expense for financial.

Which statement about depreciation is false?a. A major objective of depreciation accounting is to allocate the cost of using an assetagainst the revenues it helps to generate.b. Depreciation should not be recorded in years in which the market value of the asset hasincreased.c. Obsolescence as well as physical wear and tear should be considered when determiningthe period over which an asset should be depreciated.d. Depreciation is a process of allocating the cost of an asset to expense over its usefullife.

The certified public accountant is frequently called upon by management for advice regarding methods of computing depreciation. Of comparable importance, although it arises less frequently, is the question of whether the depreciation method should be based on consideration of the assets as units, as a group, or as having a composite life. Instructions a. Briefly describe the depreciation methods based on treating assets as (1) units and (2) a group or as having a composite life. b. Present the arguments for and against the use of each of the two methods. c. Describe how retirements are recorded under each of the two methods.

Chapter 11 Solutions

Intermediate Accounting: Reporting And Analysis

Ch. 11 - Briefly explain the meaning of the four factors...Ch. 11 - Prob. 2GI Ch. 11 - Would it be desirable to require all companies to...Ch. 11 - What is the depredation base?Ch. 11 - Prob. 5GI Ch. 11 - A company should use an accelerated depreciation...Ch. 11 - Prob. 7GI Ch. 11 - Prob. 8GI Ch. 11 - Prob. 9GI Ch. 11 - Prob. 10GI

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