A recent annual report for FedEx includes the following information: For financial reporting purposes, we record depreciation
Question:
For financial reporting purposes, we record depreciation and amortization of property and equipment on a straight-line basis over the asset’s service life or related lease term if shorter. For income tax purposes, depreciation is computed using accelerated methods when applicable.
Required:
Explain why FedEx uses different methods of depreciation for financial reporting and tax purposes.
Step by Step Answer:
Straightline depreciation SL is a simple method to use and understand Managers often ...View the full answer
Related Video
In accounting terms, depreciation is defined as the reduction of the recorded cost of a fixed asset in a systematic manner until the value of the asset becomes zero or negligible. An example of fixed assets are buildings, furniture, office equipment, machinery, etc. The land is the only exception that cannot be depreciated as the value of land appreciates with time. Depreciation allows a portion of the cost of a fixed asset to be the revenue generated by the fixed asset. This is mandatory under the matching principle as revenues are recorded with their associated expenses in the accounting period when the asset is in use. This helps in getting a complete picture of the revenue
Students also viewed these Accounting questions
-
A recent annual report for Swifty Air Cargo Company states the following: Property, Plant, and Equipment Expenditures for major additions, improvements, flight equipment modifications, and specific...
-
A recent annual report for General Motors Corporation contained the following note: Note 3. Significant Accounting Policies Property, Net Property, plant, and equipment, including internal use...
-
A recent annual report for Sears Holdings Corporation disclosed that the company paid preferred dividends in the amount of $119.9 million. It declared and paid dividends on common stock in the amount...
-
Convert decimal + 49 and + 29 to binary, using the signed-2's-complement representation and enough digits to accommodate the numbers. Then perform the binary equivalent of ( +29) + (-49), (-29) +...
-
Christopher regularly invests in tech company stocks, hoping to become wealthy by making an early investment in the next high-tech phenomenon. In 2002, Christopher purchased 3,000 shares of...
-
A design engineer for the Ford Motor Company must estimate the mean leg length of all adults. She obtains a list of the 1275 employees at her facility, then obtains a simple random sample of 50...
-
Describe the working of a cone clutch. Why a cone clutch has become obsolete ?
-
Five Flags over New York paid $90,000 for a concession stand. Five Flags started out depreciating the building straight-line over 10 years with zero residual value. After using the concession stand...
-
Describe how organizations, utilize approaches and methods that drive forward the design of the employee experience, improve productivity, and enable high-performing talent practices to be...
-
The PM Computer Company makes build-to-order (BTO) computers at its distribution center year round. The following table shows the average value (in $ millions) of component parts, work-in-process,...
-
Sterling Steel Inc. purchased a new stamping machine at the beginning of the year at a cost of $580,000. The estimated residual value was $60,000. Assume that the estimated useful life was five...
-
Schrade Company bought a machine for $96,000 cash. The estimated useful life was four years, and the estimated residual value was $6,000. Assume that the estimated useful life in productive units is...
-
Describe the experimental hypotheses and the independent and dependent variables when we study: (a) Whether the amount of pizza consumed by college students during finals week increases relative to...
-
Subject: Computer Science esident Register Login Account Barangay Management System Use Case Diagram View map < > Request Barangay Certificate < >> Enter Certificate request details < > View...
-
Scott Company had a beginning inventory on January 1 of 1 0 0 units of Product CRVat a cost of $ 2 0 0 per unit. During the year, the following purchases and return weremade:Mar. 1 5 July 2 0 Sept. 4...
-
Columbia Sportswear Company's financial statements are presented in Appendix B. Click here to view Appendix B. Financial statements of VF Corporation are presented in Appendix C. Click here to view...
-
A mass M is suspended by the system of ideal strings and pulleys shown. The system is static. The string tension is labelled at several positions, but there are only two pieces of string. The long...
-
1. The nurse completes an admission database and explains that the plan of care and discharge goals will be developed with the patients input. The patient asks, How is this different from what the...
-
Compare the ways the regression coefficients are interpreted in simple regression and in multiple regression.
-
Coastal Refining Company operates a refinery with a distillation capacity of 12,000 barrels per day. As a new member of Coastal's management team, you have been given the task of developing a...
-
Use the given quantity for each gas listed to complete the following table. Gas ozone, 03 carbon dioxide, CO carbon monoxide, CO Molecules 2.50 1022 Mass 1.83 g STP Volume 0.930 L
-
For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance...
-
For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance...
-
Two income statements for Bradford Company are shown below. a. Prepare a vertical analysis of Bradford Companys income statements. b. Does the vertical analysis indicate a favorable or unfavorable...
-
Hall & Company issues $ 1 0 0 , 0 0 0 , 0 0 0 in 6 % bonds with detachable warrants of 1 0 warrants for each $ 1 , 0 0 0 bond. The bonds are issued at 9 9 . Record the issuance under the following...
-
Assume that hein acquired Dolan Development last year. Hein recorded the following intangible assets on the date of acquisition: Goodwill: $ 1 , 5 0 0 , 0 0 0 Dolan Development trademark: $ 6 0 0 , 0...
-
What is the total amount of interest that will be paid of the loan is carried to term with no extra payments made building cost 3 3 0 0 0 0 . loan started im Dec 2 0 2 3 worh a 7 . 5 % interest rate...
Study smarter with the SolutionInn App