Answer:
(A) Payback period for the machine= 3.5 years
(B) Simple rate of return for the machine= 87.5%
Explanation:
Alesu corporation is considering purchasing a machine that would cost $283,850
The useful life is 5 years
The machine would reduce cash operating costs by $81,100 per year
The salvage value is $107,100
(A) The payback period for the machine can be calculated as follows
= cost/amount of cash flow
= 283,850/81,100
= 3.5 years
(B) The simple rate of return for the machine can be calculated as follows
First we calculate the depreciation expense
= 283,850-107,100/5
= 176,750/5
= 35,350
Annual incremental income= cost savings -depreciation expenses
= 283,850-35,350
= 248,500
Simple rate of return = annual incremental income/cost × 100
= 248,500/283,850 × 100
= 0.875 × 100
= 87.5%
Answer:
See explanation section
Explanation:
When we need to close accounts, we close the income and expenses accounts. The reason to close those accounts is that those are temporary accounts. Drawings and dividends are also temporary as those accounts have to be settled through capital and retained earnings balance. Therefore,
We will close the entries to income summary are -
D. Depreciation Expense
E. Fees Earned
J. Supplies Expense
L. Wages expense.
The entry to close against a capital account is Drawings. Therefore, Jackie Lindsay, Drawing should be closed.
Answer:
The bad debt expense which should be recorded in the income statement for the year 2019, amounts to $127,600
Explanation:
The bad debt expense which should be recorded in the income statement for the year 2019 is computed as:
= Net Credit Sales × Uncollectible credit sales for the year 2019
where
Net Credit Sales is $290,000
Uncollectible credit sales for the year 2019 is 44%
Putting the values in the above formula:
= $290,000 × 44%
= $127,600
Answer:25,000 in 12 years = 25,000*(1.09)^12= $70,316
Value of $7,500 deposits in 6 years
Use financial calculator and input these values
N=6
PV=0
PMT=7,500
I=9
Compute FV= 56,425, after this
PV= 56,425
PMT= 15,000
I=9
N=6
Compute FV=$ 207,480
We will have (207,480+ 70,316) = $277,796 in 12 years to start our business.
Explanation:
