1. A fixed asset with a cost of $27,000 and accumulated depreciation of $24,300 is sold for $4,590. What is the amount of the gain or loss on disposal of the fixed asset? a. $1,890 gain b. $2,700 gain c. $2,700 loss d. $1,890 loss 2. Z Company purchased an asset for $55,000 on January 1, Year 1. The asset was expected to have a four-year life and an $8,000 salvage value. What would be the amount of depreciation expense for Year 1 using double-declining balance? 3. The project requires $700,000 in assets and will be 100% equity financed. If EBIT is $60,000 and the tax rate is 35% and assuming the company has a large, positive income overall, what is ROE?

1. A fixed asset with a cost of $27,000 and accumulated depreciation of $24,300 is sold for $4,590. What is the amount of the gain or loss on disposal of the fixed asset? a. $1,890 gain b. $2,700 gain c. $2,700 loss d. $1,890 loss 2. Z Company purchased an asset for $55,000 on January 1, Year 1. The asset was expected to have a four-year life and an $8,000 salvage value. What would be the amount of depreciation expense for Year 1 using double-declining balance? 3. The project requires $700,000 in assets and will be 100% equity financed. If EBIT is $60,000 and the tax rate is 35% and assuming the company has a large, positive income overall, what is ROE?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter11: Depreciation, Depletion, Impairment, And Disposal

Section: Chapter Questions

Problem 10RE: Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on...

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