Yu Corporation
Use the following Assets section of Yu Corporation's balance sheets for the years ended December 31,2013 and 2012 to answer the questions that follow.
Yu Corporation recorded depreciation expense of $344 million for 2012.
Refer to the information for Yu Corporation.
Required:
(1)Explain the impact on net income and cash flows of Yu using straight-line depreciation for financial reporting and accelerated depreciation methods for income tax purposes.
(2)In the notes to the financial statements,Yu indicates that it uses different depreciation methods for different types of plant and equipment assets.Explain why Yu might follow this policy.

Question

Yu Corporation
Use the following Assets section of Yu Corporation's balance sheets for the years ended December 31,2013 and 2012 to answer the questions that follow.
  Yu Corporation recorded depreciation expense of $344 million for 2012.
Refer to the information for Yu Corporation.
Required:
(1)Explain the impact on net income and cash flows of Yu using straight-line depreciation for financial reporting and accelerated depreciation methods for income tax purposes.
(2)In the notes to the financial statements,Yu indicates that it uses different depreciation methods for different types of plant and equipment assets.Explain why Yu might follow this policy.

Quizplus · Accepted Answer

The Answer of Yu Corporation
Use the following Assets section of Yu Corporation's balance sheets for the years ended December 31,2013 and 2012 to answer the questions that follow.
  Yu Corporation recorded depreciation expense of $344 million for 2012.
Refer to the information for Yu Corporation.
Required:
(1)Explain the impact on net income and cash flows of Yu using straight-line depreciation for financial reporting and accelerated depreciation methods for income tax purposes.
(2)In the notes to the financial statements,Yu indicates that it uses different depreciation methods for different types of plant and equipment assets.Explain why Yu might follow this policy.

Yu Corporation Use the Following Assets Section of Yu Corporation's Balance Sheets