Discussion
1. DIsscuss the basic “accounting events” in the life of a depreciable plant asset. Which of these events directly affect the net income of the current period? Which directly affect cash flows (other than income tax payments)?
2. Explain the relative priority of the claims of owners and of creditors to the assets of a business. Do all creditors have equal priority? Explain. If no, then give your thoughts as to why?
Assignment
- Should deprecation continue to be recorded on a
building when ample evidence exists that the current market value is greater
than original cost and that the rising trend of market values is
continuing? Explain - Explain why an employer’s “total cost” of a payroll may exceed by a substantial amount the total wages and salaries earned by employees.