Solar Innovations Corporation bought a machine at the beginning of the year at a cost of $39,000. The estimated useful life was fiveyears and the residual value was $4,000. Assume that the estimated productive life of the machine is 20,000 units. Expected annualproduction was year 1, 4,600 units; year 2, 5,600 units; year 3, 4,600 units; year 4, 4,600 units; and year 5, 600 units.Required:00:58:151. Complete a depreciation schedule for each of the alternative methods.a. Straight-line.b. Units-of-production.c. Double-declining-balance.eBook22. Which method will result in the highest net income in year 2? Does this higher net income mean the machine was used moreefficiently under this depreciation method?Complete this question by entering your answers in the tabs below.Req 1AReq 1 Req 1C Req 2AReq 2BWhich method will result in the highest net income in year 2?0 |Units-of-productionO Double-declining-balanceStraight-lineReq 2B

Depreciation expense in Year-2 Dep expenseSLM 7000 UOP 9800 DDB 9360

Answered: Solar Innovations Corporation bought a…

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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applies to the questions displayed below.] Nicole's Getaway Spa (NGS) purchased a hydrotherapy tub system to add to the wellness programs at NGS. The machine was purchased at the beginning of the year at a cost of $15,500. The estimated useful life was five years and the residual value was $1,500. Assume that the estimated productive life of the machine is 10,000 hours. Expected annual production was year 1, 2,350 hours; year 2, 2,500 hours; year 3, 2,050 hours; year 4, 2,100 hours; and year 5, 1,000 hours. 3. Assume NGS sold the hydrotherapy tub system for $4,650 at the end of year 3. The following amounts were forecast for year 3: Sales Revenues $52,000; Cost of Goods Sold $41,000; Other Operating Expenses $4,500; and Interest Expense $700. Create an income statement for year 3 for each of the different depreciation methods, ending at Income before Income Tax Expense. (Don't forget to include a loss or gain on disposal for each method.). (Do not round intermediate calculations. Round…
Assume Plain Ice Cream Company, Incorporated, in Ithaca, NY, bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $24,000. The estimated useful life was four years, and the residual value was $2,580. Assume that the estimated productive life of the machine was 10,200 hours. Actual annual usage was 4,080 hours in Year 1; 3,060 hours in Year 2; 2,040 hours in Year 3; and 1,020 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the units-of-production method. Note: Use two decimal places for the per unit output factor. Do not round intermediate calculations. Year Depreciation Expense At acquisition 1 2 3 4 Accumulated Depreciation Net…
4. A company bought a machine three years ago at a cost of $ 55,000 . The expected life at the time of purchase was 10 years with a $ 5,000 salvage value and an annual operating cost of $ 2,700 . A new machine is now under consideration that costs $ 40,000 . It is projected to have a life of 12 years , a salvage value of $ 3,500 and an annual operating cost of $ 7,200 . Compute the required Trade - In Value ( Replacement Value ) of the presently owned machine if the new machine is to be bought using a discount rate of 12 % per year .
Oakmont Company has an opportunity to manufacture and sell a new product for a four-year period. The company's discount rate is 17%. After careful study, Oakmont estimated the following costs and revenues for the new product: Cost of equipment needed Working capital needed) Overhaul of the equipment in two years. Salvage value of the equipment in four years Annual revenues and costs: Sales revenues $ 275,000 $ 86,000 $10,000 $ 13,000 $ 420,000 Variable expenses $ 205,000 Fixed out-of-pocket operating costs $ 87,000 When the project concludes in four years the working capital will be released for investment elsewhere within the company. Click here to view Exhibit 148-1 and Exhibit 148-2. to determine the appropriate discount factor(s) using tables. Required: Calculate the net present value of this investment opportunity. (Round your final answer to the nearest whole dollar amount.)
A new machine was bought for $8,500 with a life of eight years and no salvage value. Its annual operating costs were as follows: $7,000, $7,210, 7426.30, ..., $8,609.12 If the MARR=12%, what was the annual equivalent cost of the machine? Choose the correct answer below. A. The annual equivalent cost of the machine was $16,656. B. The annual equivalent cost of the machine was $6,622. C. The annual equivalent cost of the machine was $1,711. D. The annual equivalent cost of the machine was $7,646. E. The annual equivalent cost of the machine was $9,357.
Units of production method with workings required.
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You are given the following financial data about an assembly machine to be implemented at a company: - Investment cost at year 0 (n=0) is $22,000 - Investment cost at the end of the first year (n=1) is $18,500 - Useful life: 15 years - Salvage value (at the end of 15 years): $7,000 Annual revenues: $18,000 per year - Annual expenses: $5,000 per year Assuming the first revenues and expenses will occur starting from the end of year 2, determine the conventional (non-discounted) payback period.
A company will invest in a machine worth 50000$ to produce a new product. The economic life of the machine is 4 years and its scrap value is 1000$. It will be produced on this machine The annual sales revenue of the product is expected to be 25000 $. Annual operation of the machine Expenditure is expected to be 10000 $. A) The amount of depreciation that will be allocated each year for the equipment to be purchased is Find it with the proportional depreciation method. B) The income tax is 40% and the investment will be made with the company’s equity. Assuming, find the net cash flows that will be generated by purchasing the machine.
Assume that the capital expenditures to replace and upgrade the production equipment areas given in the original exercise, but that the production and sales quantity is not known. Forwhat production and sales quantity would SS (i) upgrade the equipment or (ii) replace the equipment?
Assume Plain Ice Cream Company, Incorporated, in Ithaca, NY, bought a new ice cream production kit (pasteurizer/homogenizer, cooler, aging vat, freezer, and filling machine) at the beginning of the year at a cost of $28,000. The estimated useful life was four years, and the residual value was $2,560. Assume that the estimated productive life of the machine was 10,600 hours. Actual annual usage was 4,240 hours in Year 1; 3,180 hours in Year 2; 2,120 hours in Year 3; and 1,060 hours in Year 4. Required: 1. Complete a separate depreciation schedule for each of the alternative methods. a. Straight-line. b. Units-of-production. c. Double-declining-balance. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Complete a depreciation schedule using the straight-line method. Year Depreciation Expense At acquisition 1 2 3 Accumulated Depreciation Net Book Value
Your business buys a copy machine for $8,000 on January 1. You estimate that the copy machine will produce 350,000 copies during its useful life; its salvage value after producing the 350,000 copies is projected to be $1,000. The copy machine produced 75,200 copies in year 1 and 68,300 copies in year 2. Calculate depreciation for each of the first two years using the units-of-production method.

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