Chief Financial Officer (CFO)
The Chief Financial Officer (CFO) of Large Mart has been unable to find answers fortwo accounting problems. He has
asked you to investigate the following questions and to write a report (including relevant references to source materials and accounting
standards) that will tell him what the answers to these questions are, and that will help him understand the solutions to the problems.
The CFO is thinking about changing the depreciation method used to depreciate computers owned by Large Mart from the sums-of-digits
method to the straight line method because he believes that this will reduce the amount of expenses that Large Mart will have to record in
the following year. Please write a report that answers the following questions:
a) Is it possible to change the depreciation method of an
asset that is already partially depreciated AND what are the rules and regulations that Large Mart would have to follow ifthis change is
possible? (provide a detailed explanation of your answer, including references to source materials)
b) Does the reason why the Large Mart
CFO wants to change the depreciation method of Large Mart’s computers (see above) influence your answerfor question 1a? (provide a
detailed explanation of your answer, including references to source materials)
2) Large Mart is currently using its own engineers
and its own laboratory to develop a new product (called the “study pillow’). The CFO remembers from his accounting studies that
development expenditures can sometimes be capitalised but he cannot rememberthe details. As a result he has asked you to write a report
that answers the following questions;
a) Provide a detailed explanation ofthe requirements that must be fulfilled if Large Mart wants to
capitalise the expenditure caused by the development ofthe study pillow.
b) Describe (using examples) what Large Mart can do to prove that
the project fulfils the necessary requirements.
Your report should be approximately 400 words (+/- 10%) in length for question 1 , and 400
words (+/- 10%) in length for question 2
The appropriate acknowledgement (referencing) of source material used to develop your report will
attract . An additional the marks will be given forthe number of sources otherthan the textbook that were used to develop the arguments in
Part A of your assignment. The use ofa MINIMUM of (6) appropriate sources otherthan the textbook is required (see below for details).
However, in orderto receive full marks for your use of resources, you will need to showthat you have used substantially more than (6)
Furthermore, you are expected to use a MINIMUM of (6) appropriate sources otherthan the textbook assigned to this unit when
answering ofthis assignment. This means that although the prescribed textbook is an appropriate reference, there should be evidence (in
the form ofin-text references and entries in your reference list) that you have used at least four other articles or resources that are
useful in developing the arguments in your essay. Appropriate sources ofinformation include, but are not limited to, journal articles,
books, selected online resources (i.e. journal databases, newspaper articles, working paper databases, conference websites, official
pronouncements of accounting bodies, standards setters, government agencies, public bodies, universities, or accounting firms).
Inappropriate online resources which should NOT be used underANY circumstances include Wikipedia, blogs, twitter and websites from
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