subject
Business, 28.06.2021 06:50 bladencharles8845

Case Study HP Company is suffering declining sales of its medical products. The president, Toshio Nakao, instructs his controller, Satoshi Kasai, to lengthen asset lives to reduce depreciation expense. A processing line of medical equipment, purchased for $4 million in January 2020, was originally estimated to have a useful life of 5 years and a salvage value of $200,000. Depreciation has been recorded for 2 years on that basis. Nakao wants the estimated life changed to 10 years total and the straight-line method continued. Kasai is hesitant to make the change, believing it is unethical to increase net income in this manner. Nakao says, “The life is only an estimate, and I've heard that our competition uses a 12year life on their medical equipment.” Instructions

(a) Who are the stakeholders in this situation?

(b) Is the proposed change in asset life unethical? Give your explanation.

(c) What is the effect of Nakao's proposed change on income before taxes in the year of change?

ansver
Answers: 1

Another question on Business

question
Business, 21.06.2019 17:30
Being an expert problem solver is something you're either born with or not. true or false
Answers: 2
question
Business, 22.06.2019 11:10
Use the following account numbers and corresponding account titles to answer the following question. account no. account title (1) cash (2) merchandise inventory (3) cost of goods sold (4) transportation-out (5) dividends (6) common stock (7) selling expense (8) loss on the sale of land (9) sales which accounts would appear on the income statement?
Answers: 3
question
Business, 22.06.2019 21:00
Sue peters is the controller at vroom, a car dealership. dale miller recently has been hired as the bookkeeper. dale wanted to attend a class in excel spreadsheets, so sue temporarily took over dale's duties, including overseeing a fund used for gas purchases before test drives. sue found a shortage in the fund and confronted dale when he returned to work. dale admitted that he occasionally uses the fund to pay for his own gas. sue estimated the shortage at $450. what should sue do?
Answers: 3
question
Business, 22.06.2019 21:20
What business practice contributed most to andrew carnegie’s ability to form a monopoly?
Answers: 1
You know the right answer?
Case Study HP Company is suffering declining sales of its medical products. The president, Toshio Na...
Questions
question
Mathematics, 25.03.2021 14:00
question
Mathematics, 25.03.2021 14:00
question
Mathematics, 25.03.2021 14:00
question
Business, 25.03.2021 14:00
question
Biology, 25.03.2021 14:00