This year, Southern Coat Company had sales of £730,000. Cost of goods sold, administrative and selling expenses, and depreciation expenses were £580,000, £105,000 and £135,000 respectively. In addition, the company had an interest expense of £75,000 and a tax rate of 28 per cent. (Ignore any tax loss carry-back or carry-forward provisions.) Required: If spending on non-current assets and net working capital was zero, and if no new shares were issued during the year, what do you know about the firm’s long-term debt? (Round your answer to the nearest whole.) Minimum amount of new long-term deb
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
This year, Southern Coat Company had sales of £730,000. Cost of goods sold, administrative and selling expenses, and
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If spending on non-current assets and net working capital was zero, and if no new shares were issued during the year, what do you know about the firm’s long-term debt? (Round your answer to the nearest whole.)
Minimum amount of new long-term debt
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