Calculate the annual depreciation expense

Assignment Help Case Study

Reference no: EM132210028

Case 1 - Depreciation at Delta Air Lines and Singapore Airlines

Read and evaluate this case by answering the five questions presented.

Questions -

1. Calculate the annual depreciation expense that Delta and Singapore would record for each $100 gross value of aircraft.

(a) For Delta, what was its annual depreciation expense (per $100 of gross aircraft value) prior to July 1, 1986; from July 1, 1986 through March 31, 1993; and from April 1, 1993 on?

(b) For Singapore, what was its annual depreciation expense (per $100 of gross aircraft value) prior to April 1, 1989; and from April 1, 1989 on?

2. Are the differences in the ways that the two airlines account for depreciation expense significant? Why would companies depreciate aircraft using different depreciable lives and salvage values? What reasons could be given to support these differences? Is different treatment proper?

3. Assuming the average value of flight equipment that Delta had in 1993, how much of a difference do the depreciation assumptions it adopted on April 1, 1993 make? How much more or less will its annual depreciation expense be compared to what it would be were it using Singapore's depreciation assumptions?

4. Singapore Airlines maintains depreciation assumptions that are very different from Delta's. What does it gain or lose by doing so? How does this relate to the company's overall strategy?

5. Does the difference in the average age of Delta's and Singapore's aircraft fleets have any impact on the amount of depreciation expense that they record? If so, how much?

Case 2 - NOW YOU SEE IT, NOW YOU DO NOT: THE CASE OF JET AIRWAYS AND ITS ACCOUNTING POLICIES

Read and evaluate this case by answering the questions presented.

Questions for Analysis -

1. How does a company decide on the method of depreciation and why? How would the method of depreciation affect the net profit of the company?

2. Evaluate the alternative depreciation policy (straight line vs. written down value (reducing balance method) adopted by a company, say for Rs. 35,000 invested in an equipment which has an economic life of 3 years with a residual value of Rs. 5,000 at the end of 3 years.

3. The rates of depreciation are given in Schedule XIV of the Companies Act, 1956, in India which is the minimum that needs to be charged. Discuss the suitability of rule-based regulation (rates given) against the principle-based application of depreciation.

4. In Question 2, what would be the impact on the income statement had the company changed the method from reducing balance to SLM in year 2?

5. What is the impact of the change in the accounting policy of Jet Airways on its net earnings? Why is the policy not followed from the beginning? What has changed in the year 2009 to warrant such a policy change?

6. What would be the impact for the increase in profits on the tax payment by the company?

7. What is the impact of revaluation on the company's assets? Did revaluation affect the profit and loss account of the year 2008-2009?

8. What is the accounting treatment followed by Jet Airways for exchange difference arising from foreign currency loans that were used to purchase the depreciable assets? How did it impact the income statement?

Attachment:- Assignment Files.rar

Reference no: EM132210028

Questions Cloud

Guess an integer that the user has picked : Write a program that will guess an integer that the user has picked. Imagine that the user will write down a positive integer x on a piece of paper.

Write a program to find the area of a triangle : Build a function to accept the sides of the triangle (check if the sides form a triangle if yes returns the area otherwise returns zero.

Individual incentive plans are less preferable : "Individual incentive plans are less preferable than group incentives and company wide incentives.

A program to help an analyst decrypt a simple substitution : Write a program to help an analyst decrypt a simple substitution cipher. Your program should take the cipher text as input.

Calculate the annual depreciation expense : Calculate the annual depreciation expense that Delta and Singapore would record for each $100 gross value of aircraft

Two major tactics for coping with existing stress : List and define three of the most common organizational and work-related stressors, and discuss two major tactics for coping with existing stress.

Calculate the receive level at the receivers input : Discuss the difference between static and dynamic routing tables - Illustrate this by calculating the amount of Host ID's on a class C subnet

Give a fahrenheit value of a celsius input x using look up : Write a program that gives a Fahrenheit value of a Celsius input X (from port $ae) using look up table approach

Dividing line between lawful-unlawful employer surveillance : Why is it sometimes difficult for the NLRB to determine the “dividing line” between lawful and unlawful employer “surveillance”

Reviews

len2210028

1/7/2019 10:27:43 PM

Case 1 - Read and evaluate this case by answering the five questions presented. Your well-written analysis must be 2 to 3 pages in length, in addition to the title and reference pages, and be formatted according to the CSU-Global Guide to Writing and APA Requirements. Case - Read and evaluate this case by answering the questions presented. Your well-written analysis must be 2 to 3 pages in length, in addition to the title and reference pages, and be formatted according to the CSU-Global Guide to Writing and APA Requirements.

Write a Review

Required(*) Message

User Account

All Pages