Schrade Company bought a machine for $114,000 cash. The estimated useful life was four years and the estimated residual value was $7,760, Assume that the estimated useful life in productive units is 128,000. Units actually produced were 51,000 in Year 1 and 53,000 in Year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. 2-a. Which method would result in the lowest Earnings per Share for Year 1? 2-b. Which method would result in the lowest Earnings per Share for Year 2? 3. Which method would result in the highest amount of cash outflows in Year 1? Required 1 Required 2a Required 2b Required 3 Determine the appropriate amounts to complete the following schedule. Note: Do not round your intermediate calculations. Method of Depreciation Straight line Units-of-production Double-declining-balance Depreciation Expense for Year 1 Year 2 $ 26,560 $ $ 42,330 $ 57,000 $ Required 1 Net Book Value at the End of Year 1 Year 2 87,440 S 26,500 $ 28,500 $ 60,880 57,000 $ 28,500 Required 2a >

Schrade Company bought a machine for $114,000 cash. The estimated useful life was four years and the estimated residual value was $7,760, Assume that the estimated useful life in productive units is 128,000. Units actually produced were 51,000 in Year 1 and 53,000 in Year 2. Required: 1. Determine the appropriate amounts to complete the following schedule. 2-a. Which method would result in the lowest Earnings per Share for Year 1? 2-b. Which method would result in the lowest Earnings per Share for Year 2? 3. Which method would result in the highest amount of cash outflows in Year 1? Required 1 Required 2a Required 2b Required 3 Determine the appropriate amounts to complete the following schedule. Note: Do not round your intermediate calculations. Method of Depreciation Straight line Units-of-production Double-declining-balance Depreciation Expense for Year 1 Year 2 $ 26,560 $ $ 42,330 $ 57,000 $ Required 1 Net Book Value at the End of Year 1 Year 2 87,440 S 26,500 $ 28,500 $ 60,880 57,000 $ 28,500 Required 2a >

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On 1 June 20X9 a machine was sold which cost $10,000 on 31 July 20X5. Sale proceeds were $2,750 and the profit on disposal was $750. The depreciation policy for machinery is straight line with a full year being charged in the year of acquisition and none in the year of sale. What is the depreciation rate?
Pharoah Company purchased for $4,543,000 a mine that is estimated to have 45,430,000 tons of ore and no salvage value. In the first year, 14,040,000 tons of ore are extracted. (a1) Calculate depletion cost per unit. (Round answer to 2 decimal places, e.g. 0.50.) Depletion cost per unit $ per ton Save for Later (a2) The parts of this question must be completed in order. This part will be available when you complete the part above.
Please explain how to the methods below and only answer if you completely answer the question. Perdue Company purchased equipment on April 1 for $43,470. The equipment was expected to have a useful life of three years, or 7,020 operating hours, and a residual value of $1,350. The equipment was used for 1,300 hours during Year 1, 2,500 hours in Year 2, 2,100 hours in Year 3, and 1,120 hours in Year 4. Required: Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) the units-of-activity method, and (c) the double-declining-balance method.
Global Imex has two divisions; one located at Accra and the other in Takoradi.The following is an extract from the annual report for the 2010 financial year ACCRA TAKORADI Profit Before Depreciation 450,000 620,000 Depreciation 120,000 130,000 Non Current Assets 1,200,000 1,300,000 Current Assets 750,000 1,000,000 Current Liabilities 350,000 400,000 Cost of Capital is 20% Required (i) Using Return on Investment (ROI) and Residual Income, comment on the performance of the divisions.(ii) The Takoradi branch intends to sell one of the non-current assets with book value of GH¢120,000. This asset generates a profit of GH¢60,000. Accra also wants to acquire another asset costing GH¢90,000 that will generate a profit of GH¢40,000. To what extent will the decisions affect the performance of the divisions?
The following information is available for ABC Industries from year 1 operations: Sales revenue (65,000 units) $ 1,735,000 Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) 4 Administrative depreciation. Total costs Operating profits (losses) $ 260,000 565,000 347,000 180,000 191,000 61,000 182,000 25,000 $ 1,811,000 $ (76,000) All depreciation charges are fixed. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount…
Assume a company had net operating income of $300,000, sales of $1,500,000, average operating assets of $1,000,000, and a minimum required rate of return on average operating assets of 10.00%. The company's residual income is closest to: Multiple Choice $100,000. $200,000. $150,000. $250,000.
A company purchased equipment with a cost of $96,000. Residual value at the end of a six-year useful life is estimated to be $24,000. The company uses straight-line depreciation and sold the equipment at the end of the third year.Required:(a) Calculate accumulated depreciation by the end of the third year and then calculate the gain or loss assuming the equipment is (b) sold for $70,000, (c) sold for $50,000, or (d) retired. In addition, record the entry for the events in (b), (c), and (d). How would your answers change if the company had initially estimated the residual value to be $16,000 and the useful life to be five years?
The Marine Division of Pacific Corporation has average invested assets of $110,000,000. Sales revenue of $50,280,000 results in net operating income of $9,972,000. The hurdle rate is 7%. Required a. Calculate the return on investment. b. Calculate the profit margin. c. Calculate the investment turnover. d. Calculate the residual income. Complete this question by entering your answers in the tabs below. Required A Required B Required C Calculate the return on investment. Note: Round percentage to 2 decimals. Return on Investment Required D %
MANAGERIAL ACCOUNTING (You may use excel. RATE will be given. No long explanation needed) Show in tabular form (depreciation schedule) the computation for the depreciation expenses, accumulated depreciation, and book value per year for a machine worth Php 1,000,000 with a salvage value of 10% of the original cost and a depreciable life of 5 years using: a. straight-line method b. sum of year's digits method
Data on three unrelated companies are given in the following table. Comfy Inn Hamton Inn Night Inn Revenue $1,200,000 $3,185,000 Operating income $240,000 $210,000 Total assets $1,000,000 ? Profit margin ? 15% 18% Asset turnover 0.7 27% Return on investment (ROI) 20% 8.0% Target rate of return ? $150,000 Residual income a) Calculate each of the missing values. b) Comment on each company's performance in relation to the others.
The following are the respective costs and revenues incurred by USA company: costs for months 1, 2, 3: $80,000.00, $90,000.00, $100,000.00 Revenues for months 2, 3, 4: $70,000.00, $95,000.00 $105,000.00 The USA company wants to know from you if it has made any profit or not. What will be your answer and explain? Use interest= 12%