The board of directors of Cooper Structures, Inc., is reviewing the 2010 annual report. A new board

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The board of directors of Cooper Structures, Inc., is reviewing the 2010 annual report. A new board member a wealthy woman with little business experience questions the company accountant about the depreciation amounts. The new board member wonders why depreciation expense has decreased from $190,000 in 2008 to $174,000 in 2009 to $166,000 in 2010. She states that she could understand the decreasing annual amounts if the company had been disposing of properties each year, but that has not occurred. Further, she notes that growth in the city is increasing the values of company properties. Why is the company recording depreciation when the property values are increasing?

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Financial accounting

ISBN: 978-0136108863

8th Edition

Authors: Walter T. Harrison, Charles T. Horngren, William Bill Thomas

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