# Critical Thinking

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### Question Description

Now You See It, Now You Do Not: The Case of Jet Airways and Its Accounting Policies:

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Read and evaluate this case by answering the questions presented. Your well-written analysis must be 2 pages in length, in addition to the title and reference pages, and be formatted APA.

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Msharon
School: Cornell University

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Critical analysis
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CRITICAL ANALYSIS

2

Question 1
The method used to charge depreciation in the company changed from written down method
(WDV) to (SLM) straight line method. The reason for the charge from the written down method
to straight-line method is for the industry to be in line with the company practice adhered to in the
international as well as the domestic market (Srinivasan, 2010). The effect on the first quarter of
change was the depreciation written back 9,159 added to the income statement before tax.
Question 2
Straight-line method refers to a depreciation method whereby the fixed amount is written
off every year (Goshunovaa & Kirpikovb, 2016). The asset cost in normally uniformly spread over
the assets lifetime. The straight-line method of depreciation is also known as fixed installment
method.
1/3=*100=33.33%
33.33% *30000
=9,999.99 depreciation per year
Straight line= 9,999.99/35000*100
=28.57%
The method is also known as the reducing balance method as the annual depreciation
charge keeps on reducing every year.
Written down value= 1- 3 5000/35000
=0.133
=13.34%

CRITICAL ANALYSIS

3

Question 3
Jet Airways being one of the largest private international and domestic airlines whose turnover
in 2009 is Rs. 114,770 Million. The Company came into existence in 1992 launched by Naresh
Goyal. The company affiliates and promoters has equity of about eighty percent in 2009. Jet
Airways in 2007 acquired Sahara airways to enhance the low carrier synergies in the company
operations (Srinivasan, 2010). In the first quarter 2008-2009, that company expe...

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