during the first week in December with payments made to the contractor
in 2018 as follows. CA 11-5 Jerry Prior, Beeler Corporation’s controller,
is concerned that net income may be lower this year. He is afraid upper-
level management might recommend cost reductions by laying off
accounting staff, including him. Prior knows that depreciation is a major
expense for Beeler. The company currently uses the double-declining-
balance method for both financial reporting and tax purposes, and he’s
thinking of selling equipment that, given its age, is primarily used when
there are periodic spikes in demand. The equipment has a carrying value
of $2,000,000 and a fair value of $2,180,000. The gain on the sale would
be reported in the income statement. He doesn’t want to highlight this
method of increasing income. He thinks, ―Why don’t I increase the
estimated useful lives and the salvage values? That will decrease
depreciation expense and require less extensive disclosure, since the
changes are accounted for prospectively. I may be able to save my job
and those of my staff.‖ Instructions: a. Who are the stakeholders in this
situation? b.
What are the ethical issues involved? c.
What
should Prior do? Problem 12-2 P12-2 (LO1,2,4,5) EXCEL
(Accounting for Patents) Fields Laboratories holds a valuable patent
(No. 758-6002-1A) on a precipitator that prevents certain types of air
pollution. Fields does not manufacture or sell the products and processes
it develops. Instead, it conducts research and develops products and
processes which it patents, and then assigns the patents to manufacturers
on a royalty basis. Occasionally it sells a patent. The history of Fields
patent number 758-6002-1A is as follows. Compute the carrying value
of patent No. 758-6002-1A on each of the following dates: (a)December
31, 2011. (b)December 31, 2015.
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ACC 422 Week 4 WileyPlus Ex 13-2, Ex 13-7, Ex 13-16, Ex
14-4, Ex 14-6, Ex 14-9, Problem 14-2 (With Excel File)
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