Read the scenario and associated questions below.  Research the pertinent issues and write a three-to-four-page  paper to explain the accounting options for the scenario. AT & T company was depreciating its antennas over 20 years.  The total cost of the antennas accounted for 20 million dollars.  It was recently discovered that the antennas useful life is only seven years due to new technological development. With reference to the above scenario answer the following questions. What is the accounting implication in this situation and why? What promulgated Accounting Standards should be followed? Provide your rationale. How and why should this discovery be recorded in the financial statements of the company? Explain your response. If the company issues quarterly financial statements and the discovery is made in the third quarter, should this impact be shown prospectively or retroactively and in what specific time period? Explain your response. As the accountant, what could you…

Subject: accounting

Ron Swanson owns Swanson’s Woodcraft Connection, a store dedicated to woodworking tools, supplies, and design plans. On May 1, Year One, Swanson’s purchased a new warehouse to store additional inventory to help meet customer demand. Ron paid $50,000 for the warehouse and estimates that it will be used for twenty years. Salvage value is $5,000 and Swanson uses the straight-line method of depreciation. Swanson’s Woodcraft Connection has a December 31st year-end. What is the amount of depreciation to be taken in Year One?     The amount of depreciation to be taken in Year One is: $  Question 2     The amount of depreciation to be taken in Year Two is:$    Question 3 Now, assume that Swanson’s Woodcraft Connection applies the half-year convention.     The amount of depreciation expense to be taken in Year One is: $   Question 4 Assuming that Swanson’s Woodcraft Connection applies the half-year convention.     The amount of depreciation expense to be…

Levi Ackerman decided to resign from his current job and start his own café. He is investing $50,000 of his own money and took out a business loan worth $100,000. Levi handed in his resignation in May 2021, purchased and fully paid for an established café costing $109,000 in June 2021, and plans to open shop on 1 July 2021. Additional information: • Annual depreciation for the non-current assets taken over from the previous owner totals $18,000. Additional equipment costing $5,000 were purchased and paid for in June. These equipment are depreciated on a straight-line basis and have an expected useful life of ten years with no residual value. Assume that monthly payment for the loan is $780, of which $240 relates to interest payment and the remainder relates to principal repayment. One month's credit is received from inventory suppliers and Levi will utilise this payment term, paying the amounts owed one day before it is due. Inventories costing $4,000 are acquired in June 2021.…

Creative Solutions purchased a patent from Russell Lazarus, an inventor. At the time of the purchase, the patent had two years remaining. The president of Creative Solutions decided to have the accountant amortize the cost of the patent, $200,000, over 10 years rather than two years. His reasoning was that the $200,000 has already been spent and stockholders might ask a lot of questions about a $100,000 expense showing up on the income statement but probably wouldn’t pay much attention to a $20,000 expense. What is Creative Solutions’ ethical responsibility to the company’s stockholders? According to GAAP, how should the amortization of patents be treated? Write a short paragraph explaining similarities and differences between plant assets and intangible assets. In groups of two or three, determine an appropriate method of depreciation, depletion, or amortization of the following assets for financial reporting purposes: (a) a car used as a taxi, (b) a parcel of land that will…

Sweets Inc. made several capital purchases during the last month of the year. As part of the purchases the company sold some existing fixed assets. Yesterday, as you were walking to the compnay cafeteria, you saw the President of Sweets Inc. While walking the President you mentioned the recent capital purchases would significantly impact the financial statments. Today, the President called you directly and asked you to write a memorandum explaining the impact of the capital purchases (and related sales of some existing fixed assets) on each of the following financial statments; Income Statement, Balance Sheet, Statement of Cash Flows. Summary of December Capital Transactions On Dec 1, 2021 Sweets Inc purchased a new delivert truck for $100,000 The following additional information was provided: The truck was paid for with cash. The truck is expected to have a service life of 10 years. No salvage value is expected after the service life. The company uses straight line depreciation for…

Sweets Inc. made several capital purchases during the last month of the year. As part of the purchases the company sold some existing fixed assets. Yesterday, as you were walking to the company cafeteria, you saw the President of Sweets Inc. While walking with the President you mentioned that recent capital purchases would significantly impact the financial statements. Today, the President called you directly and asked you to write a memorandum explaining the impact of the capital purchases (and related sale of some existing fixed assets) on each of the following financial statements; Income Statement Balance Sheet Statement of Cash Flows Summary of December Capital Transactions On Dec. 1, 2021 Sweets Inc. purchased a new delivery truck for $ 100,000 The following additional information was provided: The truck was paid for with cash. The truck is expected to have a service life of No salvage value is expected after the service life. The company uses straight-line depreciation for their…

Subject : Accounting

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