Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life Salvage value at end of useful life Annual straight-line depreciation Annual income generated by asset (before deducting depreciation) Year 1 2 3 4 5 Use a 10 percent rate to compute the imputed interest charge. Required: Complete the following table. Income Before Depreciation $900,000 Annual Depreciation 5 years 0 $180,000 $270,000 Income Net of Depreciation Based on Net Book Value Average Net Book Imputed Interest Value Charge Residual Income Based on Gross Book Value Imputed Interest Charge Average Gross Book Value Residual Income

Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life Salvage value at end of useful life Annual straight-line depreciation Annual income generated by asset (before deducting depreciation) Year 1 2 3 4 5 Use a 10 percent rate to compute the imputed interest charge. Required: Complete the following table. Income Before Depreciation $900,000 Annual Depreciation 5 years 0 $180,000 $270,000 Income Net of Depreciation Based on Net Book Value Average Net Book Imputed Interest Value Charge Residual Income Based on Gross Book Value Imputed Interest Charge Average Gross Book Value Residual Income

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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Question

Suncoast Food Centers has provided the following information with regard to the purchase of equipment.
Acquisition cost of equipment
Useful life
Salvage value at end of useful life
Annual straight-line depreciation
Annual income generated by asset
(before deducting depreciation)
Year
1
2
3
4
5
Use a 10 percent rate to compute the imputed interest charge.
Required:
Complete the following table.
Income Before
Depreciation
$900,000
Annual
Depreciation
5 years
0
$180,000
$270,000
Income Net of
Depreciation
Based on Net Book Value
Average Net Book Imputed Interest
Value
Charge
Residual Income
Based on Gross Book Value
Imputed Interest
Charge
Average Gross
Book Value
Residual
Income

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Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life Salvage value at end of useful life Annual straight-line depreciation Annual income generated by asset (before deducting depreciation) Year 1 2 3 4 Use a 10 percent rate to compute the imputed interest charge. Required: Complete the following table. LO 5 Income Before Depreciation $ Annual Depreciation 246,000 $ 246,000 246,000 246,000 246,000 $820,000 164,000 $ 164,000 164,000 164,000 164,000 5 years 0 $164,000 $246,000 Income Net of Depreciation 82,000 82,000 82,000 82,000 82,000 Based on Net Book Value Average Net Book Imputed Interest Value Charge Residual Income Based on Gross Book Value Imputed Interest Charge Average Gross Book Value Residual Income
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