Answer: $8025
Explanation:
From the information given, first and foremost, we need to realise that only the building in this case will be depreciated due to the fact that land is considered to be a non depreciable asset.
Therefore, the MACRS depreciation charge for year 1 will then be:
= MACRS rate × Value of Building
= 1.605% × $500,000
= 0.01605 × $500,000
= $8025
Answer:
The budgeted Accounts Receivable balance on July 31 is $ 244,800.
Explanation:
Since the company sells 85% credit of which 60% is collected in the month of sale and 40% in the following month. This implies that where the sales for the month of June is $ 680,000, all of the credit sales for the month of June would have been collected by 31 July. Hence no receivables will be budgeted for considering June sales by 31 July.
For sales to be made in July budgeted at $ 720,000, 85% will be credit sales
This amounts to
Credit sales for July = 85% of 720000
= 
= $ 612,000
60% of the credit sales in the month of July will be collected by 31 July while 40% will be collected in the following month hence,
Accounts Receivable balance on July 31
= 40% of 612000
= 
= $ 244,800
Answer:
c. sunk cost.
Explanation:
Because in short run, fixed cost doesn't changes with output, that is whether we produce or not, we have to pay for it, so it is considered as Sunk cost. Also like Sunk cost, we don't make decisions with fixed costs.