According to the textbook, U.S. companies and foreign companies are affected bydeprecation rules. When companies write off the cost of long-lived assets over aperiod of time, the term used is depreciation.
In order to complete this assignment, reviewDelta Airlines’ annual reports for the years 2012 and 2013, located at http://ir.delta.com/stock-and-financial/sec-filings/.
Write a five to six (5-6) page paper in which you:
- Briefly outline Delta Airlines company’s history, products, and services,and identify the costs reported in the balance sheet for property, plant, andequipment. Prepare a horizontal analysis of Delta’s property, plant, andequipment for 2012 and 2013. Next, calculate the asset turnover ratio, return onasset ratio, and the debt to total assets ratio. Based on your calculations,indicate the conclusions that you can draw, based on the changes in property,plant, and equipment.
- Determine the method or methods of depreciation that Delta Airlines uses todepreciate its property, plant, and equipment. Suggest three (3) alternativemethods that Delta Airlines could use in order to depreciate assets. Based onyour suggestions, propose the method that Delta Airlines could use in order toimprove the reporting of its property, plant and equipment. Provide a rationalefor your response.
- Analyze the information disclosed in Delta Airlines’ notes to theirfinancial statements on property, plant, and equipment. Recommend additionaldata that Delta Airlines could include that would be useful to potentialinvestors and creditors.
- Use at least three (3) quality academic resources in this assignment.Note: Wikipedia and other Websites do not qualify as academicresources.
Your assignment must follow these formatting requirements:
- Be typed, double spaced, using Times New Roman font (size 12), with one-inchmargins on all sides; citations and references must follow APA orschool-specific format. Check with your professor for any additionalinstructions.
- Include a cover page containing the title of the assignment, the student’sname, the professor’s name, the course title, and the date. The cover page andthe reference page are not included in the required assignment pagelength.
The specific course learning outcomes associated with this assignmentare:
- Demonstrate, analyze, and explain the proper accounting for acquisition andvaluation of property, plant, and equipment; valuation; costs subsequent toacquisition; and disposition of plant assets.
- Demonstrate, analyze, and explain the proper accounting for depreciation,impairments, and depletion.
- Use technology and information resources to research issues in intermediateaccounting.
- Write clearly and concisely about intermediate accounting using properwriting mechanics.