Assume that Besley Golf Equipment commenced operations on January 1, 2008, and i

Question

Assume that Besley Golf Equipment commenced operations on January 1, 2008, and it was granted permission to use the same depreciation calculations for shareholder reporting and income tax purposes. The company planned to depreciate its fixed assets over 15 years, but in December 2008 management realized that the assets would last for only 10 years. The firm's accountants plan to report the 2008 financial statements based on this new information. How would the new depreciation assumption affect the company

Explanation / Answer

c)The firm's reported 2008 earnings per share would increase.

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