week 6 textbook questions ch 11-12

Saved Problem 10-6A Disposal of plant assets LO C1, P1, P2 [The following information applies to the questions displayed below.] Onslow Co. purchases a used machine for $288,000 cash on January 2 and readies it for use the next day at a $8,000 cost. On January 3, it is installed on a required operating platform costing $1,600, and it is further readied for operations. The company predicts the machine will be used for six years and have a $34,560 salvage value. Depreciation is to be charged on a straight-line basis. On December 31, at the end of its fifth year in operations, it is disposed of. roblem 10-6A Part 3 Prepare journal entries to record the machine's disposal under each of the following separate assumptions: 1. Record the sale of the used machine for $21,000 cash. 2. Record the sale of the used machine for $84,000 cash. 3. Record the insurance settlement received of $31,500 resulting from the total destruction of the machine in a fire. View transaction list Journal entry…

MC algo 10-1 Opportunity Costs   Shelton Company purchased a parcel of land six years ago for $867,500. At that time, the firm invested $139,000 in grading the site so that it would be usable. Since the firm wasn't ready to use the site itself at that time, it decided to lease the land for $51,000 a year. The company is now considering building a warehouse on the site as the rental lease is expiring. The current value of the land is $919,000. What value should be included in the initial cost of the warehouse project for the use of this land?   Multiple Choice   $1,058,000   $0   $1,006,500   $867,500   $919,000

Please answer last three requirement, If possible answer all the parts please other answer last 3 parts

Connect: Cha... 6 Table 9.7 Modified ACRS depreciation allowances Saved Help Save & Exit Submit Property Class Year 3-Year 5-Year 7-Year Check my work 1 33.33% 20.00% 14.29% 2 44.45 32.00 24.49 3 14.81 19.20 17.49 4 7.41 11.52 12.49 An asset used in a four-year project falls in the five-year MACRS class (MACRS schedule) for tax purposes. The asset has an acquisition cost of $7,200,000 and will be sold for $1,620,000 at the end of the project. If the tax rate is 24 percent, what is the aftertax salvage value of the asset? Note: Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32. 7 5 11.52 8.93 6 5.76 8.92 8.93 8 4.46 Aftertax salvage value

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Homework-Chapter 10 i 4 Saved Help Save & Exit Sull Check my wo 12.5 points A piece of newly purchased industrial equipment costs $1.325 million and is classified as seven-year property under MACRS. The MACRS depreciation schedule is shown in Table 10.7. Calculate the annual depreciation allowances and end-of-the-year book values for this equipment. Note: Leave no cells blank - be certain to enter "O" wherever required. Do not round intermediate calculations and enter your answers in dollars, not millions of dollars, rounded to 2 decimal places e.g., 1,234,567.89. eBook Year Beginning Book Value Depreciation Ending Book Value Hint 1 $ 1,325,000.00 $ 189,342.50 $ 1,135,657.50 2 Print $ 1,135,657.50 $ 811,165.00 References 345 $ 811,165.00 $ 579,422.50 $ 579,422.50 $ 413,930.00 $ 413,930.00 $ 295,607.50 6 $ 295,607.50 $ 177,417.50 7 $ 177,417.50 $ 59,095.00 $ 59,095.00 0

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A B C E F G H J K 1 Function: FV, Rate; Cell referencing 2 3 Problem 10.22 - Modified Internal Rate of Return (MIRR) 4 PROBLEM 5 Morningside Bakeries recently purchased equipment at a cost of 6 $650,000. Management expects the equipment to generate cash flows of 7 $275,000 in each of the next four years. The cost of capital is 14 percent. Student Work Area Required: Provide input into cells shaded in gray in this template. Use the FV function with cell references to the Problem area in order to calculate the terminal value of cash flows. Use the Rate function with cell references to the Problem area and Student Work area to calculate the MIRR. Do not leave any portion of the formula for the functions blank - use 0's when necessary. Be sure to represent cash inflows as positive values. 8 9 PV of Costs 10 Length of Project 11 Cost of Capital 12 Annual Cash Flows 13 14 15 16 17 18 19 $ 650,000.00 4 years 14% $275,000.00 What is the terminal cash flow for this project? Terminal cash flow…

Exercise 10-2 (Static) Recording costs of assets LO C1 Cala Manufacturing purchases land for $390,000 as part of its plans to build a new plant. The company pays $33,500 to tear down an old building on the lot and $47,000 to fill and level the lot. It also pays construction costs of $1,452,200 for the new building and $87,800 for lighting and paving a parking area. Prepare a single journal entry to record these costs incurred by Cala, all of which are paid in cash. View transaction list Journal entry worksheet A Record the total costs of the plant assets. Note: Enter debits before credits. Transaction General Journal Debit Credit

PROBLEM 9.1A Determining the Cost of Plant Assets and Depreciation e L09-1, L LO9-2, LO9-3 Hamlet College recently purchased new computing equipment for its library. The following information refers to the purchase and installation of this equipment. 1. The list price of the equipment was $285,00o; however, Hamlet College qualified for an "education discount" of $25,000. It paid $50,000 cash for the equipment, and issued a three-month, 9 percent note payable for the remaining balance. The note, plus accrued interest charges of $4,500, was paid promptly at the note's maturity date. 2. In addition to the amounts described in 1, Hamlet paid sales taxes of $15,000 at the date of purchase. 3. Freight charges for delivery of the equipment totaled $1,000. 4. Installation costs related to the equipment amounted to $5,000. 5. During installation, one of the computer terminals was accidentally damaged by a library employee. It cost the college $500 to repair this damage. 6. As soon as the…

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Chapter 10 Problem Set A Problem 10-1 On January 1, 2019 Crampton Company acquired land on which to construct a new distribution warehouse. During 2019, the company made expenditures as follows: Contract price of the land $600,000 Closing costs $23,000 Hoerr Excavating for clearing and grading $65,000 Sparks Concrete Construction for sidewalk and parking lot $158,500 Touchstone Lighting for parking lot lighting $21,500 J Hacker and Associates, Architects $71,000 Town of Normal for building permits $9,500 Lewis General Contractors $4,100,000 Crampton also purchased $1,450,000 of warehousing equipment and conveyors. The entire facility was placed in service before December 31, 2019. Prepare Crampton Company’s PPE section of their balance sheet dated December 31, 2019 before the adjusting entries for depreciation

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A B 1 Chapter 14: Applying Excel 2 3 Data 4 Example E 5 Cost of equipment needed 340,000 6. Working capital needed 40,000 Overhaul of equipment in four years 30.000 7 Salvage value of the equipment in five years 20,000 Annual revenues and costs: 9 Sales revenues 400,000 10 Cost of goods sold 245.000 11 Out-of-pocket operating costs 65.000 12 Discount rate 10 % 13 a. What is the net present value of the project? (Negatlve amount should be Indlicated by a mlnus sign. Round your present value factor to 3 declmals and round all other Intermedlate calculatlons to nearest whole dollar.) Net present value c. The internal rate of return is between what two whole discount rates (e.g., between 10% and 11%. between 11% and 12%, between 12% and 13%, between 13% and 14%, etc.)? The internal rate of return is between % and d. Reset the discount rate to 10%. Suppose the salvage value is uncertain. How large would the salvage value have to be to result in a positive net present value? Minimum salvage…

MODULE 5 8-7 DISPOSAL OF ASSET Please read the problem below and provide the correct answer along with an explanation of the answer. Thank you! Dump It is selling a machine that no longer is large enough for the production requirements.  Dump It has had the machien for 3 years and has depreicated it using the straightline method.  Original cost had been $98,000 and salvage was estimated at $6000.  The machine has a life of 8 years. a) Journalize the sale of the imagine $70,000 b) Journalize teh sale of the machine for $50,000

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Question 21 During year 4, King Company made the following expenditures relating to its plant building: Continuing and frequent repairs Repainted the plant building $40,000 10,000 Major improvements to the electrical wiring system 32,000 Partial replacement of roof tiles 14,000 How much should be charged to repair and maintenance expense in year 4? O $82,000 O $96,000 O $64,000 O$54,000

Chapter 11, Question 8

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Exercise 6-18A (Algo) Asset replacement decision LO 6-5 Tesla management are trying to decide whether to keep an older piece of machinery or buy a replacement. Management was presented with the following information to assist in their decision: • The old machine was purchased three years ago for $315,000 and has a current book value using straight-line depreciation of $185,000. • The old machine incurs operating expenses of $36,000 per year. • The current disposal value of the old machine is $83,000; if it is kept eleven more years, its remaining value would be $11,000. • The replacement machine would cost $229,000 and have a useful life of eleven years. • The replacement machine has an expected salvage value of $73,000 after eleven years. • The replacement machine would require $10,000 per year in operating expenses. Required Calculate the total costs in keeping the old machine and purchase a new machine. Should the old machine be replaced? Keep Old Purchase New Machine Machine Total…

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Exercise 8-14 (Algo) Ordinary repairs, extraordinary repairs, and betterments LO C3 Oki Company pays $254,900 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries record the following costs related to the equipment. 1. Paid $22,050 cash for a new component that increased the equipment's productivity. 2. Paid $5,513 cash for minor repairs necessary to keep the equipment working well. 3. Paid $15,000 cash for significant repairs to increase the useful life of the equipment from four to seven years. View transaction list A Record the betterment cost of $22,050 paid in cash. B Record the cost of minor repairs of $5,513 paid in cash to keep the equipment working well. c Record the cost of significant repairs of $15,000 paid in cash to increase the useful life of the equipment. Note: journal entry has been entered Record entry Clear entry / / Credit View general journal

Subject acc

Project Bono Project Edge Project Clayton Capital investment $160,000 $190,000 $206,000 Annual net income: Year 1 15,120 19,440 29,160 2 15,120 18,360 24,840 3 15,120 17,280 22,680 4 15,120 12,960 14,040 5 15,120 9,720 12,960 Total $75,600 $77,760 $103,680 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Click here to view PV table. (a) Your Answer Correct Answer (Used) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.) (b) Project Bono 3.40 years Project Edge 3.41 years Project Clayton 3.10 years * Your answer is incorrect. Compute the net present value for each project. (Round answers to O decimal places, e.g. 125. If the net present value is negative, use either a negative sign preceding the number eg -45 or parentheses eg (45). For calculation purposes, use 5 decimal places as displayed in the factor table…

Problem 6-16 Comparing Mutually Exclusive Projects Tanaka Industrial Systems Company is trying to decide between two different conveyor belt systems. System A costs $295,000, has a 4-year life, and requires $97,000 in pretax annual operating costs. System B costs $375,000, has a 6-year life, and requires $91,000 in pretax annual operating costs. Both systems are to be depreciated straight- line to zero over their lives and will have zero salvage value. Suppose the company always needs a conveyor belt system; when one wears out, it must be replaced. Assume the tax rate is 21 percent and the discount rate is 9 percent. Calculate the EAC for both conveyor belt systems. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) System A System B Which conveyor belt system should the firm choose? O System A O System B

Brief Exercise 8-5 (Algo) Effect of the disposal of plant assets on the financial statements LO 8-5 Mix & Match Company sold office equipment with a cost of $48,600 and accumulated depreciation of $33,000 for $28,000 cash. Required: a. What is the amount of gain or loss on the disposal? b. How would the sale affect net income (increase, decrease, no effect)? c. How would the sale affect the amount of total assets shown on the balance sheet (increase, decrease, no effect)? d. How would the event affect the statement of cash flows (inflow, outflow, no effect)? a. b. Effect of sale on net income c. Effect of sale on total assets d. Effect of sale on statement of cash flows

1 Check my work S Purchase price Delivery cost Installation charge Estimated life $ 55,800 $ 4,000 Estimated units Salvage estimate $ 2,000 5 years 142,000 $ 5,000 During Year 1, the machine produced 38,000 units, and during Year 2 it produced 40,000 units. Required: a. Determine the amount of depreciation expense for Year 1 and Year 2 using straight-line method. b. Determine the amount of depreciation expense for Year 1 and Year 2 using double-declining-balance method. c. Determine the amount of depreciation expense for Year 1 and Year 2 using units of production method. d. Determine the amount of depreciation expense for Year 1 and Year 2 using MACRS, assuming that the machine is classified as seven-year property. Note: Round your answers to the nearest dollar amount. MACRS table: Year 5-Year property,% 7-Year property,% 1 20.00 14.29 12345678 32.00 24.49 19.20 17.49 11.52 12.49 11.52 8.93 5.76 8.92 8.93 4.46