2. Marigold Corp. is considering the purchase of a piece of equipment and has complied the information… Marigold Corp. is considering the purchase of a piece of equipment and has complied the following informationInitial costOne-time training costSalvage valueUseful life12Projected net annual cash flows over the project's life are:3$119000Year Net Annual Cash Flow4140005220005 years$3500053000580006400072000Marigold uses the cash payback method as an initial screening tool and has a policy that the payback period should not be more thanhalf of the asset's useful life. Based on this, should Marigold move forward with further evaluation of the equipment purchase? Projected net annual cash flows over the project's life are:Year Net Annual Cash Flow12345$3500053000580006400072000Marigold uses the cash payback method as an initial screening tool and has a policy that the payback period should not be more thanhalf of the asset's useful life. Based on this, should Marigold move forward with further evaluation of the equipment purchase?Yes, because the cash payback period of 2.36 years is less than half of the asset's 5-year useful life.O No, because the cash payback 2.78 years is longer than half of the asset's 5-year useful life.Yes, because the cash payback period of 2.78 years is less than the asset's 5-year useful life of the asset.O No, because the cash payback period of 2.53 years is longer than half of the asset's 5-year useful life.

The question is based on the concept of Cost Accounting. Payback period is the period in which the…

Answered: Marigold Corp. is considering the…

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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One of the main differences between U.S. GAAP and IAS/IFRS is the measurement of property, plant & equipment subsequent to initial recognition. Read IAS 16 and answer the following questions. Provide a list of the references you have used to search this topic. 1) What are the accounting models accepted under IFRS for the measurement of property, plant & equipment subsequent to initial recognition? 2) How often should the company revalue its property, plant & equipment under the revaluation model? 3) How should the revaluation gains and losses be accounted for and reported in the financial statements? 4) How should any claim for compensation from third parties for impairment be accounted for? 5) How should the recoverability of the carrying amount of property, plant & equipment be accounted for?
The brand name of hand sanitizers has acquired by the company as part of another company acquisition. Does this fulfil the criteria to be recognised as intangible assets as per the provision of IAS 38? Explain.
) How could rates of technological change affect a company’s decision about whether to buy or lease equipment, vehicles, and other assets?
4. How can entries be made research costs and development costs? What account do they use? For example, for other intangible assets, we purchase 'Patent' with cash and amortize them. How about R&D costs? How do they appear in journal entries? I want the names of entries. On what account do we credit and debit?
Research & Development costs: A)Are included in the cost of a patent on the balance sheet B) Should be expensed C) Are amortized over the useful life of the patent D) Both A&B are correct
Which of the following costs incurred internally to create an intangible asset is generallyexpensed? a. Research and development costs.b. Filing costs.c. Legal costs.d. All of the above.
What is the effective life of an asset? a. The total period of ownership of the asset, including when it is not installed and ready for use.. b. The period prior to the asset being abandoned or scrapped. c. The period that the asset can be used for income-producing purposes. d. All of the above.
Question-based on, "Asset purchased"... Simple I am confused about it and got an incorrect answer.
E12.1B (L0 1,2) (Classification Issues—Intangibles) Presented below is a list of items that could be included in the intan- gibleassets section of the balance sheet. 1. Cost of purchasing a patent from an inventor. 2. Unrecovered costs of a successful legal suit to protect the patent. 3. Cost of purchasing a copyright. 4. Long-term receivables. 5. Cost of purchasing a trademark. 6. Cost of developing a trademark. 7. Research and development costs. 8. Cost of conceptual formulation of possible product alternatives. 9. Legal costs incurred in securing a patent. 10. Cost of developing a patent. 11. Timberland. 12. Lease prepayment (6 months’ rent paid in advance). 13. Cost of searching for applications of new research findings. 14. Operating losses incurred in the start-up of a business. 15. Purchase cost of a franchise. 16. Goodwill generated internally. 17. Goodwill acquired in the purchase of a business. 18. Cost of testing in search for product alternatives. 19. Training costs…

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Marigold Corp. is considering the purchase of a piece of equipment and has complied the following information Initial cost One-time training cost Salvage value Useful life $119000 14000 22000 5 years Projected net annual cash flows over the project's life are: