The ABC, a computer manufacturing organization, is using building “ALFA–I” as ma

Question

The ABC, a computer manufacturing organization, is using building “ALFA–I” as manufacturing department while building “ALFA–II” for its administrative work. As a “Manager Accounts”, you are required to advice to the Accountant of the organization with logical reason regarding the treatment of depreciation of the building “ALFA–I” as direct or indirect manufacturing expense.

Also explain to him that in which heads of the “Income Statement” the depreciation of “ALFA-1” and “ALFA–II” will be reported.

Explanation / Answer

In 1947 ABC submitted requests for licenses in the five cities where it owned radio stations (which together represented 25 percent of the entire nationwide viewing audience at the time). All five requests were for each station to broadcast on channel 7; Frank Marx, ABC's vice president in charge of engineering, thought at the time that the low-band (channels 2 through 6) TV channels would be reallocated for military use, thus making these five stations broadcasting on VHF channel 7 the lowest on the TV dial and therefore the best channel positions.[5] (Such a move never occurred, although fortuitously, 60 years later the Channel 7 frequency would prove technically favorable for digital television transmission, a technology unanticipated at the dawn of TV broadcasting.)The ABC television network went on the air on April 19, 1948. The network picked up its first primary affiliates, WFIL-TV in Philadelphia (now WPVI-TV) and WMAL-TV in Washington (now WJLA-TV) before its flagship owned and operated station ("O&O"), WJZ-TV in New York (now WABC-TV) signed on in August of that year. The rest of ABC's fleet of owned-and-operated major market stations, in Detroit, Chicago, San Francisco and Los Angeles, would sign on during the next 13 months, giving it parity with CBS and NBC in the important area of big-city presence, as well as a long term advantage in guaranteed reach over the rival DuMont Television Network, by the fall of 1949.

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