Subic Company purchased factory equipment on October 1, 2017 costing P960, 000. Inview of pending technological developments it is estimated that the machine will have aresale value upon disposal in four and one half years of P70,000 and the disposal cost willbe P10,000.Estimated useful life: Service hours. 8,000Actual operations (machine was retired at end of four and one half years)hours.service hours2017.1,0002000|2018.Required: Compute depreciation expense for 2017 and 2018 using:a. Service hours depreciationb. SYDc. Straight Lined. DDP

Depreciation is the reduction in the value of the asset due to the wear and tear of the asset. There…

Answered: Subic Company purchased factory…

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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Units of production method with workings required.
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BH is considering the manufacture of a new product which requires the use of both a new machine and existing machine. The following information has been prepared: (a) - current purchase price - residual value end Year 5 New Machine 2$ 450,000 30,000 (b) Existing Machine - cost 2 years ago - current written down value - current disposal value - residual value end Year 5 2$ 240,000 180,000 100,000 NIL The existing machine has sufficient spare capacity for the manufacture of the new product with no alternative use (c) New Product - life 5 years. Sales, 15,000 units per year at $ 46 per unit Cost per Unit Material Direct Labour, 2 hours at $ 8 per hour Variable overhead 16 4 Fixed overhead 10 (including depreciation of the new machine) (d) working capital required $ 45,000 immediately, it will remain at $ 45,000 during the Years 1 to 5 (e) direct labour is in short supply. It would need to be diverted from other work currently earning a $ 4 per hour (f) proceeds from the disposal of the…
Problems 43 and 44 are based on the following statement: Used New machine machine Initial Cost 15,000 40,000 ($) Annual 8,000 2,000 operating cost ($/year) Salvage 5,000 10,000 value ($) Life (years) 3 6 Use an interest rate of 10% per year 43. The present worth of the new machine is closest to: (A) $43,630 (B) $43,066 (C) $45,210 (D) $49,660 44. To compare the machines on the basis of a present worth analysis, the present worth values to use are: (A) PWused $31,139, PW new = $43,066 (B) PWused $31,139, PW new = $37,461 (C) PWused $54,533, PW new = $43,066 (D) PWused $54,533, PW new = $37,461
"age purchased a laboratory machine of 60000 $ on January 1, 2013. The machine is expected to have a salvage value of 6000 $ at the end of its 6 year useful life. During the useful life, the machine is expected to be used for 7600 hours. The machine was used as under: Year Hour used 2013 1 500 1 200 1 600 1 000 2014 2015 2016 2017 900 2018 1 400 Required: Prepare schedule of depi - Straight Line Method dream iation based on the following methods - Method Sum of Year - Double Declining Method
Required information [The following information applies to the questions displayed below.] Exact Photo Service purchased a new color printer at the beginning of Year 1 for $38,000. The printer is expected to have a four-year useful life and a $3,500 salvage value. The expected print production is estimated at 1,500,000 pages. Actual print production for the four years was as follows. Year 1 Year 2 Year 3 Year 4 390,000 410,000 420,000 300,000 Total 1,520,000 The printer was sold at the end of Year 4 for $1,650. c. Calculate the amount of gain or loss from the sale of the asset under each of the depreciation methods. Double Declining Balance Units of Production
A company plans to purchase a new machine due to the expected demand for anew product. The machine costs Ghc185,000 and it is expected that the machineshall be used for five (5) years with a scrap value of Ghc15,000. The companyexpects the demand for the product to be as follows: Year 1 2 3 4 5 Demand (Units) 25,000 30,000 35,000 40,000 20,000 Increase Selling Price 2% per year Variable Cost of production Fixed production expenses 3% per year5% per year The company’s cost of capital is 10% and pays corporate tax at a rate of 25% inthe related year. Calculate the Net Present Value (NPV) of purchasing the newmachine advice whether it makes economic sense to buy the new machine.
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A machine that produces cellphone components is purchased on January 1, 2024, for $171,000. It is expected to have a useful life of four years and a residual value of $12,000. The machine is expected to produce a total of 200,000 components during its life, distributed as follows: 40,000 in 2024, 50,000 in 2025, 60,000 in 2026, and 50,000 in 2027. The company has a December 31 year end. (a) Calculate the amount of depreciation to be charged each year, using each of the following methods: i. Straight-line method Straight-line method depreciation Senter a dollar amount per year per year ii. Units-of-production method (Round depreciation per unit to 3 decimal places, e.g. 15.257 and depreciation expense to 0 decimal places, e.g. 125.) Units-of-production method depreciation Senter a dollar amount per unit rounded to 3 decimal places per unit Year Depreciation Expense 2024 Senter a dollar amount 2025 Senter a dollar amount 2026 Senter a dollar amount 2027 Senter a dollar amount iii.…
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Stranger Things Corporation is planning to add a new product to its line. To package this product, the company needs to buy a new machine at a cost of $518,000 cost with an expected four-year life and $15,000 salvage value. Additional annual information for this new product line follows: Sales of new product Cost of Goods Sold (does not include depreciation) Selling, general, and administrative expenses (does not include depreciation) Required: (1) Determine income and net cash flow for each year of this machine's life. $ 1,750,000 1,248,000 (2) Compute this machine's payback period, assuming that cash flows occur evenly throughout each year. 315,000 (3) Compute net present value for this machine using a discount rate of 5%. Use the Present Value Tables below.

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