On May 31, 2012, Express Delivery, the overnight shipper, had total assets of $2

Question

On May 31, 2012, Express Delivery, the overnight shipper, had total assets of $21,000,000,000 and total liabilities of $13,000,000,000. Included among assets were property, plant, and equipment with a cost of $17,000,000,000 and accumulated depreciation of $10,000,000,000. During the year ended May 31, 212, Express Delivery earned total revenues of $28,000,000,000 and had total expenses of $25,000,000,000, of which $8,000,000,000 was depreciation expenses. The CFO and the controller are concerned that the results of 2012 will make investors unhappy. Additionally, both hold stock options to purchase shares at a reduced price, so they would like to see the market price continue to grow. They decide to

Explanation / Answer

a)their net income increases by $5,000,000,000 b) changing asset lives decreases the depreciation per year therefor decreasing annual expense increases net income yes this is ethical

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