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Assume that Besley Golf Equipment commenced operations on January 1, 2015, and it was granted permission...

Assume that Besley Golf Equipment commenced operations on January 1, 2015, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 15 years, but in December 2015 management realized that the assets would last for only 10 years. The firm's accountants plan to report the 2015 financial statements based on this new information. How would the new depreciation assumption affect the company’s financial statements?

a.

The firm’s reported 2015 earnings per share would increase.
b.

The firm’s reported net fixed assets would increase.
c.

The firm’s EBIT would increase.
d.

The provision will increase the company's tax payments.
e.

The firm’s cash position in 2015 and 2016 would increase.

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jeff jeffy answered 2 years ago
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