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You are hired to review the accounting records of Sheridan Inc. (a public corporation) before it closes its revenue and expense accounts as at December 31, 2023, the end of its current fiscal year. The following information comes to your attention. State whether or not you agree with each of the accounting decisions made by Sheridan. 1. During the current year, Sheridan Inc. changed its shipment policy from f.o.b. destination to f.o.b. shipping point. This would result in an additional $50,000 of revenue being recorded for fiscal 2023. 2. The estimated remaining useful life of its manufacturing equipment was reviewed by management and increased by five years. This reduced depreciation expense by $30,000 during fiscal 2023. 3. Due to the recent deterioration in the age of outstanding accounts receivable, Sheridan's controller changed the percentage of accounts receivable from 4.5% to 6% when arriving at the allowance for doubtful accounts for the year ended December 31,2023. This revision in the percentage used was applied to the previous year, and an additional $50,000 was recorded as bad debt expense for the year ended December 31, 2022. 4. The controller changed the classification of one expense on the comprehensive income statements for 2023 and 2022 . The expense had been previously reported as a selling expense and is now reclassified as an administrative expense. The controller didn't agree with the treatment given in prior years. Nothing was mentioned in the financial statements concerning implementing this change as he reasoned that net income and any key financial ratios remained unaffected. 5. During the year, Sheridan had an opportunity to buy equipment at an auction when its competitor went bankrupt. The equipment had to be purchased as bundles. Some of the equipment in the bundle purchased could be used by Sheridan immediately. Some of the equipment in the bundle did not fit the company's operations and had to be held for resale. The resale was expected to take place early in 2024. The purchase price of the bundle of equipment was added to property, plant, and equipment and depreciated in 2023 . The controller mentioned that the price paid for the equipment was such a bargain that any future gain or loss from the resale of equipment will not have any material effect on net income. 6. During fiscal 2023, new government legislation was passed requiring companies like Sheridan to install additional health and safety devices in their offices by 2028 . Although Sheridan does not intend to retrofit the required new devices until 2028 , an accrual for $375,500 has been established in the year-end financial statements for the future installation costs. 7. To maintain customer goodwill, Sheridan voluntarily recalled some products during the year. Sheridan has not established an accrual and is recording the sales returns as they happen

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