Depreciation

Clayton processing center be shut down and its work redistributed to other processing centers in the region? Explain. 2. Do you think Haley Romeros’s decision to shut down the Clayton facility is ethical? Explain. 3. What influence should the depreciation on the facilities at Clayton have on prices charged by Clayton for its services? SOLUTION: 1. The original cost of the facilities at Clayton is a sunk cost and should be ignored in any decision. The decision being considered here is

ACCT 3303 | CAPITAL LEASE vs. OPERATING LEASE | | Dr. Serge Ryno ACCT 3303 December 2, 2011 Capital Lease vs. Operating Lease Firms often choose to lease long-term assets rather than buy them for a variety of reasons including the tax benefits that are greater to the lessor than the lessees and leases offer more flexibility in terms of adjusting to changes in technology and capacity needs. Lease payments create the same kind of obligation that interest payments on debt create, and

It was a pleasure to meet with you last week. This memo is in regard to your concerns that you mentioned during our meeting and my recommendation for each one. Please review this memo and call me if you have any questions. 1) John Smith tax issues: a. How is the $300,000 treated for Purposes of Federal Tax income? Gross income means” all income from whatever source derived, including (but not limited to the following items: Compensation for services, including fees, commissions, fringe benefits,

It is for this reason that the depreciation expense is taken and added to overall net income at the end of each subsequent year. This method 's use or value may not be apparent at first, but through its practice we see why this is the standard in regards to this area of financial reporting

I have been hired as the controller of ABC Company, and the CEO has set a target sales goal of 3 million in annual sales over the next three years. The three million dollar sales objective is more than double where the company is at in sales today. This is an aggressive strategy which needs to be examined in terms of its perceived risk factors. There are several factors that impact the success of this strategy, and those risks will be discussed here. The Risk Profile of ABC Company The first and

Introduction Nowadays, most companies usually utilize the Historical Cost accounting to report financial statements and reflect the profitability of business. It is more conventional and simple method. Nevertheless, when considered in relation to inflation and price changes, the alternative methods such as Current Purchasing Power Accounting (CPPA), Continuously Contemporary Accounting(CoCoA) and Current Cost Accounting(CCA) would be more appropriate. There is an assumption that ‘ applying those

Comparatively, DAL, which offers standard service, does not need an advanced fleet. Hence, DAL keeps its airplanes longer than SIA and the residual value is lower because of more frequent take-offs and landings. On further analysis, SIA incurs an $8 depreciation expense for every $100 spent on an airplane and DAL incurs $4.75. From an operational standpoint, SIA can afford to depreciate at a higher rate because its load factor is greater than DAL’s (76.8% vs 72.9%). Furthermore, SIA’s revenue per passenger

GAAP for reporting to its U.S.-based lender and (2) IFRSs in reporting to its parent. U.S. Operations In addition to other assets, Ida owns and operates a commercial building in the United States that is carried at its cost less any accumulated depreciation and any accumulated impairment losses. As of December 31, 2010, the building represents:  A cash-generating unit (CGU) under IFRSs.  A long-lived asset classified as held and used under U.S. GAAP. In December 2010, one of Ida’s competitors sold

Case 7-3 Quality Metal Service Center 1. Is the capital investment proposal described in Exhibit 3 and attractive one for Quality Metal Service Center? The project evaluation seems to be beneficial to the company: A. Payback period: 4.5 years less than the company’s criterion of 10 years B. Internal rate of return: 21.8% c. Net present value (at 15% cost of capital): $286,000 The proposal seems to be an attractive one due to the fact that there seems to be a need in the district for this

Security Analyst and Stock Market Efficiency in Anticipating Tax-Motivated Income Shifting & Investments in Tax Planning The main research question is to understand the cost that many firms face when they are implementing tax planning ideas. Tax planning requires many considerations, but mainly the high costs and risks associated with the tax plan. If these costs can be understood, then they may possibly be mitigated in the future through thorough research and extensive planning. The author wants