Ethics Case A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month. 1. To Identify : The decision related to depreciation that C should make.

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Answer 1

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Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

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Answer 2

Question

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

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Answer 3

Question

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

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Answer 4

Question

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

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Answer 5

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

Answer 6

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

Answer 7

Chapter 8, Problem 3BTN

To determine

Ethics Case

A small business is owned by FC and accounting is also managed by FC. A year was finished in which a large amount of funds that were borrowed was invested in a new building addition and as well as in equipment by her company. The banker of C requires her to submit semiannual financial statements so that the banker can monitor the financial status of the business. FC has already been warned by her banker that if the profit margins erode, then he might have to raise the interest rate on the borrowed funds by FC as to denote the increased risk from the point of view of the bank. C is aware of the fact that the profit margin of her company will decline this year. As the year ending entries has been prepared by her, the following depreciation method is to be applied by her. All additions to the asset have been considered to be taken on the very first day of the month.

1.

To Identify: The decision related to depreciation that C should make.

Answer 8

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

Answer 9

2.

To determine

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

Answer 10

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

Answer 11

3.

To determine

To Identify: the profit margin of the business by applying depreciation.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8 - Prob. 1MCQ Ch. 8 - Prob. 2MCQ Ch. 8 - A company purchased machinery for $10,800,000 on...Ch. 8 - Prob. 4MCQ Ch. 8 - Prob. 5MCQ Ch. 8 - Prob. 1DQ Ch. 8 - What is the general rule for cost inclusion for...Ch. 8 - Prob. 3DQ Ch. 8 - Prob. 4DQ Ch. 8 - Prob. 5DQ

Solution Summary: The author explains that C's method in computing depreciation is an ethical or a legitimate decision.

To Identify: The C’s method in computing depreciation is an ethical or a legitimate decision.

To Identify: the profit margin of the business by applying depreciation.

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Chapter 8 Solutions