You are a newly graduated CPA student and recently accepted a job as a junior accountant...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
You are a newly graduated CPA student and recently accepted a job as a junior accountant responsible for managing the property, plant, and equipment subledger for the Bermuda Airport Authority (BAA). The controller has asked you to update the outdated PPE subledger by adjusting the following areas: 1. Hold off on recording depreciation for the new BorderXpress automatic passport control kiosks that were installed last year until there is a better idea of their expected useful life. 2. Extend the useful lives for the airport's emergency vehicles, including the fire trucks, ambulance, and security trucks, from 8 years to 15 years. 3. The building maintenance group is responsible for ensuring the airport facilities are clean and in good working condition. They recently had to deal with a major plumbing blockage and damage to one of the runways that was caused by invasive tree roots coming from a green space near the domestic terminal. The tree root removal and cleaning of the debris from the plumbing system and runway repair cost the airport $280,000. The controller has asked that you capitalize these expenses, including them in the prop-erty, plant, and equipment subledger and depreciating over 50 years with a $60,000 salvage value. 4. A storage facility that is expected to be removed next year and is currently not in use by BAA is being depreciated. Last week at lunch you overheard the director of finance talking to the CFO about the negotiation of a major loan to pay for a new international terminal expansion; he is concerned with the current high debt levels as a percentage of total assets. What, if any, are your concerns with each of the controller's re-quests? How would you handle the controller's requests? Who is impacted by your decision? You are a newly graduated CPA student and recently accepted a job as a junior accountant responsible for managing the property, plant, and equipment subledger for the Bermuda Airport Authority (BAA). The controller has asked you to update the outdated PPE subledger by adjusting the following areas: 1. Hold off on recording depreciation for the new BorderXpress automatic passport control kiosks that were installed last year until there is a better idea of their expected useful life. 2. Extend the useful lives for the airport's emergency vehicles, including the fire trucks, ambulance, and security trucks, from 8 years to 15 years. 3. The building maintenance group is responsible for ensuring the airport facilities are clean and in good working condition. They recently had to deal with a major plumbing blockage and damage to one of the runways that was caused by invasive tree roots coming from a green space near the domestic terminal. The tree root removal and cleaning of the debris from the plumbing system and runway repair cost the airport $280,000. The controller has asked that you capitalize these expenses, including them in the prop-erty, plant, and equipment subledger and depreciating over 50 years with a $60,000 salvage value. 4. A storage facility that is expected to be removed next year and is currently not in use by BAA is being depreciated. Last week at lunch you overheard the director of finance talking to the CFO about the negotiation of a major loan to pay for a new international terminal expansion; he is concerned with the current high debt levels as a percentage of total assets. What, if any, are your concerns with each of the controller's re-quests? How would you handle the controller's requests? Who is impacted by your decision?
Expert Answer:
Answer rating: 100% (QA)
As a junior accountant responsible for managing the property plant and equipment PPE subledger it is important to carefully consider the controllers requests and assess their impact on financial repor... View the full answer
Related Book For
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
Posted Date:
Students also viewed these accounting questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
-
You are a newly graduated CPA working for the audit firm of Firth and Forth. In an audit of Tellar Paper Corp., your audit manager has asked you to compile a list of analytical procedures to use to...
-
Who are the uppers in your life? Do you have any downers or vultures?
-
Consider a causal IIR system with system function(a) Determination the equivalent lattice-ladder structure.(b) Check if the system isstable. 1+ 2;-1 + 3z-2 + 22-3 1+ 0.9z- - 0.8z-2 + 0.5z-3 H(z) =
-
A proton, moving with a velocity of v, collides elastically with another proton that is initially at rest. Assuming that after the collision the speed of the initially moving proton is 3.00 times the...
-
A uniform shaft, supported at \(x=0\) and rotating at an angular velocity \(\omega\), is suddenly stopped at the end \(x=0\). If the end \(x=l\) is free, determine the subsequent angular displacement...
-
Refer to the work sheet in Problem 6-7A for Megaffin's Repairs. The trial balance amounts (before adjustments) have been entered in the ledger accounts provided in the working papers. If you are not...
-
Let's presume that Mr. Lopez in your video was arrested for assaulting a police officer who was called to a disturbance on a street near a restaurant. Mr. Lopez was not considered insane after an...
-
Each morning, Ruma randomly selects and buys one of the four newspapers available at her local shop. Find the probability that she buys: a. The same newspaper on two consecutive mornings b. Three...
-
Classify the discontinuities in the function below at the given point. f(x) = - 9x + 18 X-3 ; x = 3
-
There are many factors that can influence a budget for higher education expenses. Today, we will look at a few scenarios where these factors come into play. Working with a partner or alone complete...
-
0000 According to the below table, who is more likely to have dropped off online grocery shopping as the pandemic evolved? Initial Users Stayers Switchers Positively significant Mental issue factors ...
-
CFO of AAA company estimates the following spot interest rates on Treasure Securities: r 1 = 4 % , r 2 = 5 % , r 3 = 5 . 6 % . Company s bonds have an 1 1 % coupon rate interest is payable annually,...
-
4. A system comprising blocks, a light frictionless pulley (neglect its mass and there if no friction between the pulley and the rope), and connecting ropes is shown in the figure. The 9.0-kg block...
-
A 1.40 kg sample of water at 13.0C is in a calorimeter. You drop a piece of steel with a mass of 0.340 kg at 200C into it. After the sizzling subsides, what reasonable assumptions that any steam...
-
Consider an investment opportunity with an option to grow that requires a $4 million investment today. In one year, you will find out whether the project is successful. The probability of being...
-
Economic feasibility is an important guideline in designing cost accounting systems. Do you agree? Explain.
-
Distinguish among the three types of activities reported in the statement of cash flows.
-
On December 1, Nadia Electronics Ltd. has three DVD players left in stock. All are identical; all are priced to sell at $150. One of the three DVD players left in stock, with serial #1012, was...
-
Trudy Borke is studying for her accounting midterm examination. Identify for Trudy the advantages and disadvantages of the corporate form of business organization.
-
For each of the following sets of numbers, calculate a \(95 \%\) confidence interval for the mean ( \(\sigma\) known); before going through the steps in calculating the confidence interval, the...
-
Consider a 3 -year \(10 \%\) coupon bond. The underlying short rate of interest follows a lattice with initial value of \(R=1.15\) and then has an factor of 1.02 , a down factor of .99 , and...
-
Using the density function of the stopping time probability for a fixed \(\lambda\), find the average time to the first event over the entire interval \([0, \infty)\).
Study smarter with the SolutionInn App