Calculate the amount of depreciation expense that should record for machine B each year of its useful life under the following assumptions. (Round depreciation cost per unit to 2 decimal places. Round final answers to 0 decimal places, e.g. 125.)
Pele uses the straight-line method of depreciation.
Pele uses the declining-balance method. The rate used is twice the straight-line rate.
Pele uses the units-of-activity method and estimates that the useful life of the machine is 125,000 units. Actual usage is as follows: 2008, 45,000 units; 2009, 35,000 units; 2010, 25,000 units; 2011, 20,000 units.
Ethics case BYP 9-6
The controller of Ruiz Co. believes that the yearly allowance for doubtful accounts for Ruiz. co. should be 2% of net credit sales. The presdident of Ruiz Co., nervous that the stockholders might expect the company to sustain its 10% growth rate, suggests that the controller increase the allowance for doubtful accounts to 4%. The president thinks that the lower net income, which refects a 6% growth rate, will be a more sustainable rate for Ruiz Co.
a) Who are the stakeholders in this case?
b) Does the president's request pose an ethical dilemma for the controller?