Financial accounting The Goodwill is to be valued at two years' purchaseof the last four years' average profit. The profits wereR.O 40,000, R.O 32,000, R.O 15,000 and R.O 13,000respectively. Find out the value of goodwill.

Step 1: Calculate the Average Profit• Add the profits of the last four years.• Divide the total…

Answered: The Goodwill is to be valued at two…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PA: Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the...

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The following details relate to M/s XYZ, a firm: Average profit of last four years = $7,00,000 Average capital employed by the firm: $55,00,000 Normal rate of return :10% Present value of annuity of $1 for 4 years @ 10% : 3.1699 Determine the value of goodwill on the basis of annuity of super profit.
The following present value factors are provided for use in this problem. Periods Present Value of $1 at 8% Present Value of an Annuity of $1 at 8% 1 0.9259 0.9259 2 0.8573 1.7833 3 0.7938 2.5771 4 0.7350 3.3121 Xavier Company wants to purchase an asset for $37,000 with a four-year life and a $1,000 salvage value. Xavier requires an 8% return on investment. The expected year - end net cash flows are $12,000 in each of the four years. What is the machine's net present value (round to the nearest whole dollar)?
4. An instrument requires recalibration once every five years at a cost of $2500 each time. Determine the capitalized cost of this expense, assuming i = 5%.
Please read instructions and answer each question show work.
am. 281.
If an asset book-depreciates by the DDB method over a 10-year period, how long will it take to reach its salvage value if the estimated salvage is 20% of the first cost? Remember, assets can continue to depreciate after they have reached their salvage value.
An asset costs R6 300,000 with a R900,000 salvage value at the end of its ten-year life. If annual cash inflows are R900,000, the cash payback period is A. 8 years. B. 7 years. C. 6 years. D. 5 years.
Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?
a. Using straight-line depreciation, what is the book value after five years for an asset costing $150,000 that has a salvage value of $35,000 after 20 years? What is the depreciation charge in the sixth year? b. Using declining-balance depreciation with d = 25 percent, what is the book value after five years for an asset costing $150,000? What is the depreciation charge in the sixth year? c. What is the depreciation rate using declining balance for an asset costing $150,000 and having a salvage value of $35,000 after 20 years? a. The book value after five years using straight-line depreciation is $. (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Aggie Company is going to trade-in an old piece of equipment for new equipment. The following is information concerning the purchase: List Price: $65,000 Term: 5 years Payments: Quarterly Down Payment: $6,000 Interest Rate: Trade-in value 10,000 8% Determine the amount of the quarterly payment.
Which one of the following would correctly describe the net realisable value of a two year old asset? Select one alternative The original cost of the asset less two years' depreciation The cost of an equivalent new asset less two years' depreciation The amount that could be obtained from selling the asset, less any costs of disposal The present value of the future cash flows obtainable from continuing to use the asset
Rework previous parts assuming they are annuities due. Present value of $800 per year for 14 years at 16%: $ Present value of $400 per year for 7 years at 8%: $ Present value of $900 per year for 7 years at 0%: $

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The Goodwill is to be valued at two years' purchase of the last four years' average profit. The profits were R.O 40,000, R.O 32,000, R.O 15,000 and R.O 13,000 respectively. Find out the value of goodwill.