When is it appropriate to use composite rate depreciation?

West Co. paid $50,000 for an intangible asset other than goodwill. Fair value of the asset is $55,000. West signed a contract to

gulaghasi [49]

Answer:

$4,000

Explanation:

Intangible assets are usually amortized using the straight line depreciation method.

Depreciation expense = ( Cost - Salvage value) / number of years

= ($50,000 - $10,000)/ 10 = $4000

I hope my answer helps you.

3 0

3 years ago

Many people dream of opening their own restaurant someday and restaurant supply houses provide easy finance options for equipmen

dsp73

<span>This is why the threat of potential entrants in this industry is so high. Because of all of the opportunities and financing plans, it is easy for someone who wants to start a restaurant to do so. The threat of potential entrants to other restaurants remains high because of new restaurants always popping up.</span>

4 0

3 years ago

Use the following to answer questions 6-10: Answer the next question(s) on the basis of the following data. All figures are in b

sergij07 [2.7K]

Answer:

GDP B). $417

NDP C. $392

NI D. $402

PI B. $314

DI A. $284

Explanation:

Gross domestic product is the total monetary value of final goods and services produce within the country.

GDP = 20 + 40 + 24 + 35 + 90 + 75 - 22 + 10 + 123 = 417

NDP = GDP - Consumption of fixed capital

NDP = 417 - 25 = 392

NI = NDP - Statistical discrepancy + net foreign income

DI = NI - Taxes on imports - social security consumption - Corporate income tax - undistributed profits.

4 0

3 years ago

Pina Colada Corp bought equipment on January 1, 2017. The equipment cost $490000 and had an expected salvage value of $70000. Th

Olenka [21]

Answer:

$322,000

Explanation:

For computing the book value at the beginning of the third year first we have to determine the depreciation expense using the straight-line method which is shown below:

= (Original cost of equipment - expected salvage value) ÷ (estimated life)

= ($490,000 - $70,000) ÷ (5 years)

= ($20,000) ÷ (5 years)

= $84,000

In this method, the depreciation is same for all the remaining useful life

For two years, the accumulated depreciation is

= $84,000 × 2

= $168,000

So, the book value is

= $490,000 - $168,000

= $322,000

This is the answer but the same is not provided in the given options

7 0

3 years ago

Based on the projections, Decker will have a. a financing deficit of $36 b. a financing surplus of $36 c. zero financing surplus

GalinKa [24]

Answer:

B, A financing surplus of $36

Explanation:

As the question is incomplete so firstly I am going to write the question for you first and its solution

Question: Decker Enterprises Below are the simplified current and projected financial statements for Decker Enterprises. All of Decker's assets are operating assets. All of Decker's current liabilities are operating liabilities. Income statement Current Projected Sales na 1,500 Costs na 1,080 Profit before tax na 420 Taxes (25%) na 105 Net income na 315 Dividends na 95 Balance sheets Current Projected Current Projected Current assets 100 115 Current liabilities 70 81 Net fixed assets 1,200 1,440 Long-term debt 300 360 Common stock 500 500 Retained earnings 430 650 Based on the projections, Decker will have

Solution :

We need to find total assets first

Current assets = 115

Net fixed assets = 1440

Total assets = 115+1440= 1555

Secondly, we need to find sum of liabilities and stockholder equities to compare them with Total assets.

Liabilities = current liabilities + long term debt

Liabilities = 81 + 360 = 441

Equity = Common stock + retained earnings

Equity = 500 + 650 = 1150

Total equity + liabilities = 1591

Financial Deficit/Surplus = Total assets - Total liabilities and stockholder equity

Financial Deficit/Surplus = 1555 - 1591

Financial Deficit/Surplus = -36 surplus

8 0

3 years ago

When is it appropriate to use composite rate depreciation?​

When is it appropriate to use composite rate depreciation?