Financial Accounting
Financial Accounting
17th Edition
ISBN: 9781259692390
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
Question
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Chapter 9, Problem 3CTC

a)

To determine

Explain whether the depreciation methods used in the company’s financial statements determined by current income tax laws or not. If not, identify the person, responsible for selecting depreciation methods.

b)

To determine

Identify whether the company violates the consistency principle by using different depreciation methods for its different type of assets. If not, define the consistency principle.

c)

To determine

Find the estimated useful life of the machinery and equipment being depreciated with the following straight line depreciation rates.

  1. 1. 5 percent
  2. 2. 33 percent

d)

To determine

Explain the reason for which a company would use accelerated depreciation methods for income tax purposes, rather than using the straight line method.

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