Chapter 7, Problem 81.2C

To determine

(a)

Introduction:

Depreciation are the non-cash expense. This expense shown in the debit side of the profit and loss accounts, and reduced form the assets form the balance sheet. Depreciation charged on the tangible assets.

Amortization expense is also like depreciation expense. Amortization charge on the intangible assets like patent, copyright.

To choose:

What is the amount of depreciation and amortization expense that each company reported for the 3 year?

To determine

(b)

Introduction:

Acquisition of operating assets means company increase the capacity of production, its means company is ongoing increase the operating profit. So, that company make huge expense on acquiring the assets.

To choose:

How much did each company spend on the acquisition of operating assets?

To determine

(c)

Introduction:

Amortization and deterioration are techniques for customizing the expense of business assets through the span of their valuable life. Amortization. Amortization is a technique for spreading the expense of an immaterial asset over a particular timeframe, which is typically the course of its helpful life.

To discuss:

Is the change in depreciation and amortization expense consistent with the pattern of capital expenditure observed? Why or why not?