IFRS 9-4 Beckham Company constructed a warehouse for $280,000. Beckham estimates that the warehouse has a useful life of 20 years and no residual value. Construction records indicate that $50,000 of the cost of the warehouse relates to its heating, ventilation, and air conditioning (HVAC) system, which has an estimated useful life of only 10 years. Compute the first year of depreciation expense using straight-line component depreciation. Depreciation Expense $
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
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McDonald’s Corporation reports total average assets of $28.9 billion and net sales of $20.5 billion.
What is the company’s asset turnover? (Round answer to 2 decimal places, e.g. 15.25.)
| Asset Turnover Ratio |
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State whether each of the following statements is true or false.
| 1. | Mortgage bonds and sinking fund bonds are both examples of debenture bonds. |
TrueFalse
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| 2. | Convertible bonds are also known as callable bonds. |
TrueFalse
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| 3. | The market rate is the rate investors demand for loaning funds. |
TrueFalse
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| 4. | Semiannual interest on bonds is equal to the face value times the stated rate times 6/12. |
TrueFalse
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| 5. | The present |
TrueFalse
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