Assume That Pappas Company Commenced Operations on January 1, 2010

question 39

Multiple Choice

Assume that Pappas Company commenced operations on January 1, 2010, 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 2010 management realized that the assets would last for only 10 years.The firm's accountants plan to report the 2010 financial statements based on this new information.How would the new depreciation assumption affect the company's financial statements?

• A)The firm's reported net fixed assets would increase.
• B)The firm's EBIT would increase.
• C)The firm's reported 2010 earnings per share would increase.
• D)The firm's cash position in 2010 and 2011 would increase.
• E)The firm's net liabilities would increase.

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Power

The capacity or ability of an individual or group to influence the behavior of others or the course of events.

Leadership

The process of influencing and guiding individuals or groups towards achieving common goals.

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A condition where hard, dry stool becomes stuck in the rectum or lower colon.

Dietary Fiber

Plant-derived carbohydrates not fully digestible by humans, important for digestive health.