Financial statement effects of depreciation methods. Answer the following questions using data from the Intel Corporation Annual Report in the…

Financial statement effects of depreciation methods. Answer the following questionsusing data from the Intel Corporation Annual Report in the Appendix.Required:a. Find the discussion of depreciation methods used by Intel on page 26.Explain why the particular method is used for the purpose described. Whatmethod do you think the company uses for income tax purposes?b. Calculate the ratio of the depreciation expense for 2001 reported on page 22in the Consolidated Statements of Cash Flows to the cost (not net bookvalue) of property, plant, and equipment reported in the December 29, 2001,balance sheet.c. Based on the ratio calculated in part b and the depreciation method beingused by Intel, what is the average useful life being used for its depreciationcalculation?d. Assume that the use of an accelerated depreciation method would haveresulted in 50% more accumulated depreciation than reported at December29, 2001, and that Intel’s Retained Earnings account would have beenaffected by the entire difference. By what percentage would this havereduced the retained earnings amount reported at December 29, 2001?

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