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week 6 discussion

This weeks discussion will be based on Case CP-1 on page 534 in the textbook.  Please read the brief case and respond to the following questions.

In what ways will the decision to change the equipments estimated useful life and estimated residual value affect earnings in the short term?  In the long term?  How does this change impact the usefulness of the companys net income for external decision makers?
If Mike and James make the change, are they acting in an ethical manner? Share your reasoning for your decision.
What would be an acceptable basis for making a change in useful life or estimated residual value for this equipment?

 

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