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May 28, 2015

Homework Help: accounting

Posted by kim on Friday, November 25, 2011 at 1:26pm.

jim reed manages a fleet of utility trucks for a rural county government. He's been in his job 30 years, and he knows where the angles are. He makes sure that when new trucks are purchased, the salvage is set as low as possible. Then, when they become fully depreciated they are sold off by the county at salvage value. Jim makes sure his buddies in the contruction business are first in line for the bargain sales, and they make sure he gets a little something back. Recently, a new county commissioner was elected with vows to cut expenses for the taxpayers. Unlike other commissioners, this man has a businees dergree, and he is coming to visit Jim tomarrow.
Requirements:
1. When a business sells a fully depreciated asset for it's salvage value, is a gain or loss recognized?
2. How do businesses determine what salvage values to use for their variious assets? Are there "hard and fast" rules for salvage values?
3. How would an organization prevent the kind of fraud depicted here?

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