Wastenot Is a Waste Disposal Company

Essay

Wastenot is a waste disposal company.Explain the effect the following actions of the management of Wastenot Company might have in managing earnings:
1.Management assigned unsupported and inflated salvage values and extended the useful lives of company garbage trucks.
2.Management assigned arbitrary salvage values to other assets that previously had no salvage value.
3.Management did not record expenses required to write off the costs of unsuccessful and abandoned landfill development projects.
4.Management recorded inflated environmental liabilities in connection with acquisitions of other companies.
5.Management improperly capitalized a variety of expenses.
1.Assume all plant assets are depreciated on the group basis.Estimate the original cost of plant assets retired for the year.
2.Assume that the straight-line method is applied individually to all plant assets and that gains and losses on plant asset disposals were approximately equal in amount during the year.Estimate the average proportion of useful life remaining at disposal on the plant assets retired during the year.Identify additional information that would be helpful in answering this question.