Burlington Northern released first quarter 2007 earnings below those of the same period for 2006. While revenues

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Burlington Northern released first quarter 2007 earnings below those of the same period for 2006. While revenues increased, mainly due to higher prices, earnings were down due to increased expensed, including a charge for the write-off of an outdated technology system.

REQUIRED:

a. Describe how the write-off of a technology system would affect the basic accounting equation and the financial statements.

b. What factors could lead to a company determining that its technology was overvalued?

c. Discuss how management might be able to mange earnings through such a write-off.

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Financial Accounting in an Economic Context

ISBN: 978-0470635292

8th Edition

Authors: Jamie Pratt

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Question Posted: Nov 18, 2011 04:05 AM

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Burlington Northern released first quarter 2007 earnings below those of the same period for 2006. While revenues

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a The writeoff of an outdated technology system would reduce assets and equity eq...View the full answer

Financial Accounting in an Economic Context

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