Nikhil Limited purchased a machine on 1st July, 2019 for 8, 90,000 and freight and transit insurance premium paid 25,000 and 15,000 respectively. Installation expenses were 40,000 and salvage value after 5 year will be 50,000. Under straight line method for the year ended 31st March, 2020 the amount of depreciation will be: 1,81,000 1,35,750 1,38,000 1,84,000
Q: 13. You decide you'd like to buy a Nissan Leaf electric car, but you don't have enough money. You…
A: The objective of the question is to find out the loan term that would result in the same monthly…
Q: to earn 7.00% per year and the expected inflation rate is 2.00% per year. How much does Deshawn need…
A:
Q: To help with his retirement savings, Pablo has decided to invest. Assuming an interest rate of 3.43%…
A: Present value, also known as present discounted value, is a financial concept that refers to the…
Q: What is the modified IRR?
A: Modified IRR= (Future value of Positive cashflow /Present value of negative cashflow)^(1/n)-1Future…
Q: A stock in your portfolio has just paid a dividend of $0.50. You expect the dividend to grow to…
A: Dividend Discounted Model (DDM) is an financial approach that helps in computing the price of the…
Q: tate POOR NORMAL GOOD probability 40% 35% 25% Weight a .55 what is the weight of b what is the…
A: In the given case, we have provided the probability of each state of economy and its respective…
Q: percent and the tax rate is 24 percent. What is the price per share of the company's stock? (Do not…
A: The stock price shows only the current or market worth of a corporation. As a result, the price…
Q: Sachs Brands's defined benefit pension plan specifies annual retirement benefits equal to 1.3% x…
A: The project beneficiary approach involves identifying and quantifying the positive outcomes of a…
Q: Suppose that on Monday, 7 July, you assume a long position in one December British pound futures…
A: 1. Initial Position: Long position in December British pound futures.2. Initial Futures Price:…
Q: Bank with an interest of 12% compounded annually. You can pay off the debt in 4 years by paying $310…
A: Present value:Present value is a financial concept that refers to the current worth of a future sum…
Q: An investor has two bonds in his portfolio. Each bond matures in 4 years, has a face value of…
A: The objective of the question is to calculate the price of a zero-coupon bond, Bond Z, at the end of…
Q: Sloan Transmissions, Inc., has the following estimates for its new gear assembly project: price =…
A: Price = $2600 per unitVariable cost = $520 per unitFixed costs = $1.7 millionQuantity = 82,000 units
Q: Two mutually exclusive alternative public works projects are under consideration. Their respective…
A: As the lives of both the investments is different, we take the LCM of the lives and evaluate both…
Q: Analytical Question: China Eastern, headquartered in Shanghai, needs US $5,000,000 for one year to…
A: The problem requires an exchange rate concept. Here, two working capital loan alternatives are given…
Q: Kunkle Company wishes to earn 10% annually on its investments. If Kunkle makes an investment that…
A: First of all we need to compare the future value with the initial investmet .If the future value is…
Q: Plant Shutdown or Continue Operations, Qualitative Considerations, Traditional Analysis KarlAuto…
A: First Year:Materials: The cost of materials is $12,000 for both scenarios, as it represents the…
Q: i will 10 upvotes urgent Suppose you are the manager of a bank whose $100 billion of assets have an…
A: Assets$100.00Liabilities$90.00Interest rate rise2.00%Average duration for assets5Average duration…
Q: Using the US Straight Line Depreciation Schedule, estimate the total value of depreciation recorded…
A: 1.Determine the total cost basis:Equipment cost: $122,325Installation cost: $19,080Total cost basis:…
Q: A new project will cost $80,000 initially and will last for 7 years, at which time its salvage value…
A: The question is based on the concept of sensitivity analysis of capital budgeting. The analysis…
Q: Value of a stock is currently at $40. Volatility of that stock is 30% per year and risk- free…
A: Options are derivative products that gives the holder of option to buy or sell the stock on…
Q: Suppose you are considering building a factory that produces turbo jets. Price of a turbo jet right…
A: AmountCalculation Cost of factory $300.00Price of turbo jet $200.00WACC30%Present value of cash…
Q: Dyrdek Enterprises has equity with a market value of $1.8 million and the market value of debt is…
A: NPV is defined as the sum of the present values of all future cash inflows less the sum of the…
Q: You purchase a futures contract in euros for $170,000. The trading unit is 125,000 euros. What is…
A: The objective of the question is to calculate the ratio of cents to euros in a futures contract and…
Q: The current spot price of a stock is $50, the expected return of the stock is 7%, and the volatility…
A: The Black-Scholes-Merton Model, often referred to as the Black-Scholes Model, is a groundbreaking…
Q: between -9.87% and 23.87% between -47.68 % and 54.68 % between -24.60 % and 31.80 % between -26.74 %…
A:
Q: Quigley Inc. is considering two financial plans for the coming year. Management expects sales to be…
A: EBIT = Sales - Operating costs = 300,000−265,000=35,000For Plan B, TIE =…
Q: You plan to retire 28 years later. Your account currently has $20,000 that you will leave aside for…
A: To solve this problem, we need to understand that it involves two parts: the growth of the initial…
Q: Cookie Dough Corporation has two different bonds currently outstanding. Bond M has a face value of…
A: The bond price is the value or the consideration paid by the potential investor of bond to purchase…
Q: the typical firm in a monopolistically competitive industry is in the situation as depicted in the…
A: Businesses with monopolistic competition have some market strength even in the face of numerous…
Q: You purchased land 3 years ago for $75,000 and believe its market value is now $120,000. You are…
A: Net present value or NPV is defined as the sum of the present values of all future cash inflows…
Q: A taxpayer is presumed a resident if they live within the state for an aggregate of how many months?…
A: A taxpayer is an individual, business, or legal entity subject to taxation by a government.…
Q: Analyze and evaluate the business strategy of the company based on the SWOT analysis. Help estimate…
A: A SWOT analysis is a strategic planning tool that organizations use to evaluate their internal…
Q: In cash flow estimation, depreciation shelters company's income from A. expansion B. salvages C.…
A: The reduction in income tax liability due to depreciation means that the company has more cash…
Q: Consider a two-state outcome for the following problem: Winterhold Publishing…
A: The hedge ratio denotes the percentage of a derivative instrument employed to counterbalance the…
Q: Quick Print Press borrowed $20 000 from the Provincial Bank on May 25 at 7.5% and secured the loan…
A: 25-MayLoan Amount 25-MayLoan Amount $ 20,000.00Interest…
Q: An investor needs exactly 1 lakh after 2 years and has 2 bonds in mind with YTM of 10%. Bond A has…
A: Bonds are financial instruments that represent debt obligations issued by governments, corporations,…
Q: A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers.…
A: Current Machine (3 years old): - Initial cost: $140,000 (not relevant for future costs) -…
Q: - Initial investment = $3,905,000 - Expense = $5,580,000 (first year) - Income = $6,480,000 (first…
A: Net present value(NPV) is the difference between present value of all cash inflows and initial…
Q: Suppose that you wish to buy a new home that will cost you $452,847. You must put $80,000 down, and…
A: Negative amortization means interest on the loan is not paid due which the loan amount tends to…
Q: In 2022, Pierre was 67 years of age and he decided to transfer his RRSP assets into a RRIF in June…
A: RRIF is the retirement plan in Canada and there are conditions for withdrawal from the RRIF plan…
Q: Investment options A and B are equally risky and have identical initial costs. Each investment will…
A: We are given the following data -Cash inflow of each project$20,000Option A will pay five annual…
Q: You are a consultant to a large manufacturing corporation that is considering a project with the…
A: r=rf+beta(rm−rf)rf=7%rm=15%beta=1.1=>7%+1.1(15%-7%).=>7%+8.8%=>15.8%
Q: is considering buying locked vend to replace open newspaper racks in the downtown area. The vending…
A: We will have to use the excel spreadsheet and the formulae embedded in excel to compute the answers.…
Q: ABC mines copper with fixed costs of $0.50/lb and variable cost of $0.40/lb. The 1-year forward…
A: No Hedging: We'll see how ABC's profit per pound of copper would change based on different spot…
Q: In the development of a publicly owned, commercial waterfront area, three possible independent plans…
A: Given InformationPresent Worth of Costs of Plan A, Plan B and Plan C are $97,000; $119,000 and…
Q: Depreciation and accounting cash flow A fim in the thed year of depreciating is only asset, which…
A: The objective of this question is to calculate the operating cash flow (OCF) for the current year…
Q: Complete the information below using Simple Annuity Due. 1. R= P230 Adue = t = 4 years m 11 Sdue= i…
A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…
Q: State Probability 0.10 0.20 0.20 0.30 0.20 L23 45 Return on Stock A Multiple Choice 10% 13% 12% 14%…
A:
Q: Westcomb, Incorporated had equity of $100,000 at the beginning of the year. At the end of the year,…
A: 1. Beginning Equity: $100,000 2. End-of-Year Total Assets: $200,0003. Yearly Net Income: $80,0004.…
Q: You purchased 50 shares of Z stock in January 2022 for $40 per share. Each year you received a cash…
A: Purchase price=$40Selling price=$60Dividend=$0.75Brokerage=3% on both sides
Step by step
Solved in 4 steps
- Hunter Company purchased a light truck on January 2, 2019 for 18,000. The truck, which will be used for deliveries, has the following characteristics: Estimated life: 5 years Estimated residual value: 3,000 Depreciation method for financial statements: straight-line method Depreciation for income tax purposes: MACRS (3-year life) From 2019 through 2023, each year, Hunter had sales of 100,000, cost of goods sold of 60,000, and operating expenses (excluding depreciation) of 15,000. The truck was disposed of on December 31, 2023, for 2,000. Required: 1. Prepare an income statement for financial reporting through pretax accounting income for each of the 5 years, 2019 through 2023. 2. Prepare, instead, an income statement for income tax purposes through taxable income for each of the 5 years, 2019 through 2023. 3. Compare the total income for all 5 years under Requirements 1 and 2.Kam Company purchased a machine on January 2, 2019, for 20,000. The machine had an expected life of 8 years and a residual value of 300. The double-declining-balance method of depreciation is used. Required: 1. Compute the depreciation expense for each year of the assets life and book value at the end of each year. 2. Assuming that the company has a policy of always changing to the straight-line method at the midpoint of the assets life, compute the depreciation expense for each year of the assets life. 3. Assuming that the company always changes to the straight-line method at the beginning of the year when the annual straight-line amount exceeds the double-declining-balance amount, compute the depreciation expense for each year of the assets life.Hathaway Company purchased a copying machine for 8,700 on October 1, 2019. The machines residual value was 500 and its expected service life was 5 years. Hathaway computes depreciation expense to the nearest whole month. Required: 1. Compute depredation expense (rounded to the nearest dollar) for 2019 and 2020 using the: a. straight-line method b. sum-of-the-years-digits method c. double-declining-balance method 2. Next Level Which method produces the highest book value at the end of 2020? 3. Next Level Which method produces the highest charge to income in 2020? 4. Next Level Over the life of the asset, which method produces the greatest amount of depreciation expense?
- On July 1, 2018, Mundo Corporation purchased factory equipment for 50,000. Residual value was estimated at 2,000. The equipment will be depreciated over 10 years using the double-declining balance method. Counting the year of acquisition as one-half year, Mundo should record 2019 depredation expense of: a. 7,680 b. 9,000 c. 9,600 d. 10,000Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense for 2019 if the units-of-production method were used ( Note: Round your answer to the nearest dollar)? a. $179,400 b. $184,000 c. $218,400 d. $224,000
- Gray Companys financial statements showed income before income taxes of 4,030,000 for the year ended December 31, 2020, and 3,330,000 for the year ended December 31, 2019. Additional information is as follows: Capital expenditures were 2,800,000 in 2020 and 4,000,000 in 2019. Included in the 2020 capital expenditures is equipment purchased for 1,000,000 on January 1, 2020, with no salvage value. Gray used straight-line depreciation based on a 10-year estimated life in its financial statements. As a result of additional information now available, it is estimated that this equipment should have only an 8-year life. Gray made an error in its financial statements that should be regarded as material. A payment of 180,000 was made in January 2020 and charged to expense in 2020 for insurance premiums applicable to policies commencing and expiring in 2019. No liability had been recorded for this item at December 31, 2019. The allowance for doubtful accounts reflected in Grays financial statements was 7,000 at December 31, 2020, and 97,000 at December 31, 2019. During 2020, 90,000 of uncollectible receivables were written off against the allowance for doubtful accounts. In 2019, the provision for doubtful accounts was based on a percentage of net sales. The 2020 provision has not yet been recorded. Net sales were 58,500,000 for the year ended December 31, 2020, and 49,230,000 for the year ended December 31, 2019. Based on the latest available facts, the 2020 provision for doubtful accounts is estimated to be 0.2% of net sales. A review of the estimated warranty liability at December 31, 2020, which is included in other liabilities in Grays financial statements, has disclosed that this estimated liability should be increased 170,000. Gray has two large blast furnaces that it uses in its manufacturing process. These furnaces must be periodically relined. Furnace A was relined in January 2014 at a cost of 230,000 and in January 2019 at a cost of 280,000. Furnace B was relined for the first time in January 2020 at a cost of 300,000. In Grays financial statements, these costs were expensed as incurred. Since a relining will last for 5 years, Grays management feels it would be preferable to capitalize and depreciate the cost of the relining over the productive life of the relining. Gray has decided to nuke a change in accounting principle from expensing relining costs as incurred to capitalizing them and depreciating them over their productive life on a straight-line basis with a full years depreciation in the year of relining. This change meets the requirements for a change in accounting principle under GAAP. Required: 1. For the years ended December 31, 2020 and 2019, prepare a worksheet reconciling income before income taxes as given previously with income before income taxes as adjusted for the preceding additional information. Show supporting computations in good form. Ignore income taxes and deferred tax considerations in your answer. The worksheet should have the following format: 2. As of January 1, 2020, compute the retrospective adjustment of retained earnings for the change in accounting principle from expensing to capitalizing relining costs. Ignore income taxes and deferred tax considerations in your answer.Chapman Inc. purchased a piece of equipment in 2018. Chapman depreciated the equipment on a straight-line basis over a useful life of 10 years and used a residual value of $12,000. Chapmans depreciation expense for 2019 was $11,000. What was the original cost of the building? a. $98,000 b. $110,000 c. $122,000 d. $134,000During 2019, Ryel Companys controller asked you to prepare correcting journal entries for the following three situations: 1. Machine A was purchased for 50,000 on January 1, 2014. Straight-line depreciation has been recorded for 5 years, and the Accumulated Depreciation account has a balance of 25,000. The estimated residual value remains at 5,000, but the service life is now estimated to be 1 year longer than estimated originally. 2. Machine B was purchased for 40,000 on January 1, 2017. It had an estimated residual value of 5,000 and an estimated service life of 10 years. it has been depreciated under the double-declining-balance method for 2 years. Now, at the beginning of the third year, Ryel has decided to change to the straight-line method. 3. Machine C was purchased for 20,000 on January 1, 2018, Double-declining-balance depreciation has been recorded for 1 year. The estimated residual value of the machine is 2,000 and the estimated service life is 5 years. The computation of the depreciation erroneously included the estimated residual value. Required: Prepare any necessary correcting journal entries for each situation. Also prepare the journal entry necessary for each situation to record depreciation expense for 2019.
- Depreciation Methods Sorter Company purchased equipment for 200,000 on January 2, 2019. The equipment has an estimated service life of 8 years and an estimated residual value of 20,000. Required: Compute the depreciation expense for 2019 under each of the following methods: 1. straight-line 2. sum-of-the-years-digits 3. double-declining-balance 4. Next Level What effect does the depreciation of the equipment have on the analysis of rate of return?Comprehensive: Acquisition, Subsequent Expenditures, and Depreciation On January 2, 2019, Lapar Corporation purchased a machine for 50,000. Lapar paid shipping expenses of 500, as well as installation costs of 1,200. The company estimated that the machine would have a useful life of 10 years and a residual value of 3,000. On January 1, 2020, Lapar made additions costing 3,600 to the machine in order to comply with pollution-control ordinances. These additions neither prolonged the life of the machine nor increased the residual value. Required: 1. If Lapar records depreciation expense under the straight-line method, how much is the depreciation expense for 2020? 2. Assume Lapar determines the machine has three significant components as shown below. If Lapar uses IFRS, what is the amount of depreciation expense that would be recorded?Loban Company purchased four cars for 9,000 each and expects that they will be sold in 3 years for 1,500 each. The company uses group depreciation on a straight-line basis. Required: 1. Prepare journal entries to record the acquisition and the first years depreciation expense. 2. If one of the cars is sold at the beginning of the second year for 7,000, what journal entry is required?
