Answer:
Book value= $302,000
Explanation:
Giving the following information:
Purchase price= $460,000
Salvage value= $65,000
Useful life= 5 years
<u>First, we need to calculate the annual depreciation.</u>
Annual depreciation= (original cost - salvage value)/estimated life (years)
Annual depreciation= (460,000 - 65,000) / 5
Annual depreciation= $79,000
<u>Now, the accumulated depreciation after 2 full years:</u>
Accumulated depreciation= 79,000*2= $158,000
<u>Finally, the book value:</u>
Book value= purchase price - accumulated depreciation
Book value= 460,000 - 158,000
Book value= $302,000
Explanation:
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Answer:
False
Explanation:
Retained earnings can be defined as the amount of money or income left after a firm or organization as paid out it dividends to their shareholders.
Retained earnings are also an organisation's profit which they retained or keep and this earning is reinvested for other purposes. Such purposes include: Future expansion of the the organization. Retained earnings are a form of liability to a firm.
Funds acquired by the firm through retained earnings (similar to their free cash flow), have cost attached to them. This is because the cost of retained earnings is equivalent to rate of return on re-investment of dividends of shareholders that is paid by the organization. Hence, retained earnings is equivalent to the cost of equity.
Answer:
Green Wave Company
T-Ledger Accounts:
1. Common Stock Account
Jan. 1 Cash Account $35,000
Cash Account
1. Jan. 1 Common Stock $35,000 3. Jan. 9 Equipment $8,300
5. Jan 18 Rental Fees $12,300 7. Jan. 31 Salaries $6,900
<u> </u> Jan. 31 Balance <u>$32,100</u>
<u> $47,300 </u> <u> $47,300</u>
Feb. 1 Balance $32,100
2. Land Account
Jan. 5 Note Payable $20,500
2. Note Payable Account
Jan. 5 Land $20,500
3. Equipment Account
Jan. 9 Cash $8,300
5. Rental Fees Revenue
Jan. 18 Cash $12,300
6. Office Supplies
Jan. 23 Accounts Payable $2,300
6. Accounts Payable
Jan. 23 Office Supplies $2,300
7. Salaries Expense
Jan. 31 Cash $6,900
Explanation:
T-Ledger accounts are ledger accounts in the form of the letter T. It has debit on the left-hand side and credit on the right-hand side. It is an accounting tool for determining balances.
The company under IFRS will have lower cash flow in the financing section and higher cash flow in the operating section than the company under US GAAP.
Explanation:
Interest payments are a capital outflow and are viewed as a part of the Cash Flow Statement under US GAAP. The Cash Flow from transactions under IFRS is higher than that under the US GAAP if it is presented in the finance segment of IFRS.
As, on the other hand, the cash outflow for the company is smaller under IFRS than the US GAAP, if interest payments is included in the funding segment of IFRS.
The company under US GAAP would be required to include interest paid in the operating section, which lowers cash flows for that section
