Searay 380 Inc. (Searay) is a competitor of Formula 400 SS Inc. The company haschanged from ASPE to IFRS, and the year-end is December 31. To expand the company,on January 1st, 2024, they purchased a new property for a lump sum price of $45 million;30 million for the land and 15 million for the building. The building was estimated tohave a useful life of 20 years and uses the straight-line depreciation method. OnDecember 31, 2027, before recording depreciation, Searay evaluated its assets forimpairment. The fair value less costs of disposal of the land was determined to be $27million and value in use 25.2 million. The fair value less costs of disposal of the buildingwas determined to be 9.2 million and value in use of 8.9 million.The company CFO, Vanceless Nominee Jr. needs to calculate the depreciation for 2024to 2026. Then determine if any the amount of impairment loss for December 31, 2027.Also do not forget to calculate depreciation expense for 2027.

Depreciation for 2024 to 2026:Building cost: $15 millionUseful life: 20 yearsDepreciation method:…

Answered: Searay 380 Inc. (Searay) is a…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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A suburban retail property in Arlington, Virginia with 60,000 square feet and 600 surface parking spaces was purchased for $6,000,000 at a cap rate of 6.0% with a 60% LTV interest-only loan at a 6% annual interest rate. If after six years the property appreciated by 60%, what would be the amount of the owner’s equity in the property at that time? a. $6,000,000 b. $2,400,000 c. $3,600,000 d. $9,600,000
This is the agreement to be bound by the terms of the contract. acceptance offer consideration capacity
A suburban office building in Fort Worth, Texas with 36,000 square feet was purchased for $4,500,000 at an 8% cap rate. Debt service for the first year was $305,000 of which $236,000 was interest and $69,000 was principal. Annual depreciation for tax purposes was $148,000. What was the property’s first year taxable income? a. $124,000 b. $212,000 c. - $24,000 d. $55,000
Build-Rite Construction has received favorable publicity from guest appearances on a public TV home improvement program. Public TV programming decisions seem to be unpredictable, so Build-Rite cannot estimate the probability of continued benefits from its relationship with the show. Demand for home improvements next year may be either low or high. But Build-Rite must decide now whether to hire more employees, do nothing, or develop subcontracts with other home improvement contractors. Build-Rite has developed the following payoff table:
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On December 31, 2019, the unadjusted trial balance of Tarzwell Services showed the following balances: Accounts receivable Allowance for doubtful accounts Sales $200,000 1,000 Cr. 700,000 The business has given up trying to collect $5,000 of its accounts receivable but has not yet recorded the write-off entry. The firm uses the allowance method to estimate bad-debt expense. Required a) Provide the entry for the write-off. b) If the firm uses the percent-of-sales allowance method for recording bad-debt expense, and has experienced an average 6% rate of non-collection based on sales, provide the entry to record bad-debt expense for 2019. c) Assume that after the firm recorded the $5,000 of write-offs, it determined that 18% of its remaining accounts receivable will be uncollectible under the aging method. Provide the entry to record bad-debt expense. Don't give answer in image format
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If the contract annual interest rate on a $2,880,000 fixed rate loan that is fully amortizing over 20 years with equal monthly payments is 6.25%, what is the effective yield to the lender if the lender charges 1.5% as an origination fee, $288 for a credit report and $3,080 for an appraisal fee and the loan is repaid after ten years? a. 6.25% b. 6.51% c. 6.46% d. 6.49%
Build-Rite Construction has received favorable publicity from guest appearances on a public TV home improvement program. Public TV programming decisions seem to be unpredictable, so Build-Rite cannot estimate the probability of continued benefits from its relationship with the show. Demand for home improvements next year may be either low or high. But Build-Rite must decide now whether to hire more employees, do nothing, or develop subcontracts with other home improvement contractors. Build-Rite has developed the following payoff table: Alternative Hire Subcontract Do nothing DEMAND FOR HOME IMPROVEMENTS Low Moderate High ($139,000) $183,000 $448,000 $85,000 $158,000 $587,000 $100,000 $143,000 $411,000 Show Transcribed Text Which alternative is best, according to each of the following decision criteria? a. Maximin b. Maximax c. Laplace d. Minimax Regret
On January 2, 2019, Epson Company signed an 8-year non-cancellable lease for a new machine, requiring P120,000 annual payments at the beginning of each year. The machine has an estimated life of 12 years, with no salvage value. Title passes to Epson at the lease expiration date. Epson uses straight-line method of depreciation for all of its plant asses. Aggregate lease payments have a present value on January 2, 2017, of P864,000 based on an appropriate rate of interest. For 2018, how much should Epson record as depreciation expense for the leased machine?

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