At a recent luncheon, you were seated next to Mr. Lopez, the president of a local company that manufactures food process

[answerhappygod]

At a recent luncheon, you were seated next to Mr. Lopez, thepresident of a local company that manufactures food processors. Heheard that you were in a financial accounting class and asked:
“Why is it that I’m forced to record depreciation expense on mybuilding when I could sell it for more than I originally paid? Ithought that the purpose of the balance sheet is to reflect thevalue of my business and that the purpose of the income statementis to report the net change in value or wealth of a company. Itjust doesn’t make sense to penalize my profits when the buildinghasn’t lost any value.”
At the conclusion of the luncheon, you promised to send him ashort explanation of the rationale for current depreciationpractices.
Required:
Prepare a memo to Mr. Lopez. Explain the accounting concept ofdepreciation and contrast this with the dictionary definition ofdepreciation.
ACCEPTABLE LENGTH
Submit a paper that is 1 page in memo format.