ᴅᴇᴛᴇʀᴍɪɴᴇ ᴛʜᴇ ᴀɴɴᴜᴀʟ ᴅᴇᴘʀᴇᴄɪᴀᴛɪᴏɴ ᴄᴏꜱᴛ ʙʏ ᴛʜᴇ ꜱɪɴᴋɪɴɢ ꜰᴜɴᴅ ᴍᴇᴛʜᴏᴅ
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ᴀ ᴄᴏᴍᴘᴀɴʏ ᴘᴜʀᴄʜᴀꜱᴇᴅ ᴀɴ ᴇQᴜɪᴘᴍᴇɴᴛ ꜰᴏʀ ᴘʜᴘ 53,000 ᴀɴᴅ ᴘᴀɪᴅ ᴘʜᴘ 1,500 ꜰᴏʀ ꜰʀᴇɪɢʜᴛ ᴀɴᴅ ᴅᴇʟɪᴠᴇʀʏ ᴄʜᴀʀɢᴇꜱ ᴛᴏ ᴛʜᴇ ᴊᴏʙ ꜱɪᴛᴇ. ᴛʜᴇ ᴇQᴜɪᴘᴍᴇɴᴛ ʜᴀꜱ ᴀ ɴᴏʀᴍᴀʟ ʟɪꜰᴇ ᴏꜰ 10 ʏᴇᴀʀꜱ ᴡɪᴛʜ ᴀ ᴛʀᴀᴅᴇ-ɪɴ ᴠᴀʟᴜᴇ ᴏꜰ 5,000 ᴀɢᴀɪɴꜱᴛ ᴛʜᴇ ᴘᴜʀᴄʜᴀꜱᴇ ᴏꜰ ᴀ ɴᴇᴡ ᴇQᴜɪᴘᴍᴇɴᴛ ᴀᴛ ᴛʜᴇ ᴇɴᴅ ᴏꜰ ᴛʜᴇ ʟɪꜰᴇ. ᴅᴇᴛᴇʀᴍɪɴᴇ ᴛʜᴇ ᴀɴɴᴜᴀʟ ᴅᴇᴘʀᴇᴄɪᴀᴛɪᴏɴ ᴄᴏꜱᴛ ʙʏ ᴛʜᴇ ꜱɪɴᴋɪɴɢ ꜰᴜɴᴅ ᴍᴇᴛʜᴏᴅ ᴀꜱꜱᴜᴍɪɴɢ ɪɴᴛᴇʀᴇꜱᴛ ᴀᴛ 6.5% ᴄᴏᴍᴘᴏᴜɴᴅᴇᴅ ᴀɴɴᴜᴀʟʟʏ.
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