ten empty packs returned to Brownie, customer will receive an attractive food container. The company estimates that only 30% of the packs reaching the market will be redeemed. Additional date are as follows: Units Amount Sales of food packs Food containers purchased 3,000,000 P9,000,000 60,000 180,000 Prizes distributed to customers 37,000 At the end of the year, Brownie recognized a liability equal to the estimated cost of potential prizes outstanding.

ten empty packs returned to Brownie, customer will receive an attractive food container. The company estimates that only 30% of the packs reaching the market will be redeemed. Additional date are as follows: Units Amount Sales of food packs Food containers purchased 3,000,000 P9,000,000 60,000 180,000 Prizes distributed to customers 37,000 At the end of the year, Brownie recognized a liability equal to the estimated cost of potential prizes outstanding.

Name: The Brownie Corporation launched a sales promotional campaign on June
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Description: The Brownie Corporation launched a sales promotional campaign on June 30, 2021. For everyten empty packs returned to Brownie, customer will receive an attractive food container. Thecompany estimates that only 30% of the packs reaching the market wil

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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Hayden Inc. has a number of copiers that were bought four years ago for $25,000. Currently maintenance costs $2,500 a year, but the maintenance agreement expires at the end of two years, and thereafter, the annual maintenance charge will rise to $8,500. The machines have a current resale value of $8,500, but at the end of year 2, their value will have fallen to $4,000. By the end of year 6, the machines will be valueless and would be scrapped.Hayden is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $30,000, and the company can take out an eight-year maintenance contract for $1,500 a year. The machines would have no value by the end of the eight years and would be scrapped.Both machines are depreciated using seven-year straight-line depreciation, and the tax rate is 40%. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7%.a. Calculate the equivalent annual cost, if the copiers are: (i)…
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