The La Salle Bus company has decided to purchase a new busfor $ 85,000 with a trade in of their old bus. The old bus has abook value of $ 10,000 at the time of the trade-in. The new buswill be kept for ten years before being sold. Its estimatedsalvage value at the time is expected to be $5,000.00Book value = $ 85,000(New Bus) + 10,000 (Old Bus)%3DBus Asset class = 9 yearsSolve for the depreciation using the 3 classical method, use a200% for DBM

Depreciation refers to reduction in the asset value over the expected time period or to the useful…

e La Salle Bus company has decided to pure $ 85,000 with a trade in of their old bus. Th ok value of $ 10,000 at the time of the trade- be kept for ten years before being sold. Its vage value at the time is expected to be $5, ok value = $ 85,000(New Bus) + 10,000 (Old Bu

e La Salle Bus company has decided to pure $ 85,000 with a trade in of their old bus. Th ok value of $ 10,000 at the time of the trade- be kept for ten years before being sold. Its vage value at the time is expected to be $5, ok value = $ 85,000(New Bus) + 10,000 (Old Bu

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Answer what total relevant cost is for the keep old?
A cyber is planning on replacing its existing computers, which were purchased 2 years ago at a cost of $16.500. They could be sold today at $12.500. The depreciation period of this system is 5 years from the date of its purchase. New PCs could be bought for $18.000. Asume a 25% tax rate over profits. Calculate the book value of the old PCs Calculate the after-tax proceeds of its sale for $12.500 Calculate the initial investment associated with the replacement project.
On October 1, Midway Distribution Company is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $150,400 of 5% U.S. Treasury bonds that mature in 16 years. The bonds could be purchased at face value. The following data have been assembled: Cost of store equipment $150,400 Life of store equipment 16 years Estimated residual value of store equipment $19,000 Yearly costs to operate the store, excluding depreciation of store equipment $56,900 Yearly expected revenues—years 1-8 $74,100 Yearly expected revenues—years 9-16 $70,800 Required: Question Content Area 1. Prepare a differential analysis as of October 1 to determine whether to Operate Retail Store (Alternative 1) or Invest in Bonds (Alternative 2). If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential…
Kamil Koç Transportation is considering two models of buses for newly opened routes. Bus Model 1 will have a first cost of $160912, an operating cost of $21338 per year, and a resale value of $86231 after 6 years. Bus Model 2 will have a first cost of $108347, an operating cost of $15486 per year, and also have a $75850 resale value, but after 4 years. At an interest rate of 7% per year, which model should the Kamil Koç buy based on an annual worth analysis? What is the annual worth and the present worth of the selected alternative? Select one: a. Bus Model 1 is selected, AW is $-25017 and PW is $-102936 b. Bus Model 2 is selected, AW is $-30390 and PW is $– 30390 c. Bus Model 1 is selected, AW is $-25017 and PW is $-205161 d. Bus Model 2 is selected, AW is $-33123 and PW is $ – 102936 e. Bus Model 2 is selected, AW is $-33123 and PW is $-205161 f. Bus Model 1 is selected, AW is $-30390 and PW is $-102936
6. On March 10, 2018, Hardwood Company sold to Barr Hardware 200 tool sets at a price of $50 each (cost $30 per set) with terms of n/60, f.o.b. shipping point. Hardwood allows Barr to return any unused tool sets within 60 days of purchase. Hardwood estimates that (1) 10 sets will be returned, (2) the cost of recovering the products will be immaterial, and (3) the returned tools sets can be resold at a profit. On March 25, 2018, Barr returned six tool sets and received a credit to its account. Required: Prepare journal entries for Hardwood to record (1) The sale on March 10, 2018 (2) The return on March 25, 2018 (3) Any adjusting entries required on March 31, 2018 (when Hardwood prepares financial statements). Hardwood believes the original estimate of returns is correct. Solution
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