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blondinia [14]
3 years ago
11

United Van Lines purchased a truck with a list price of $250,000 subject to a 6% discount if paid within 30 days. United Van Lin

es paid within the discount period. It paid $4,000 to obtain title to the truck with the state and an $800 license fee for the first year of operation. It paid $1,500 to paint the firm’s name on the truck and $2,500 for property and liability insurance for the first year of operation. What acquisition cost of this truck should United Van Lines record in its accounting records? Indicate the appropriate accounting treatment of any amount not included in acquisition cost.
Business
1 answer:
Varvara68 [4.7K]3 years ago
8 0

Answer: <em>Acquisition cost</em> of Truck for <em>United Van Lines</em>= List Price - Discount Availed + Truck title fees paid + Cost incurred on painting the Truck

= $ 250,000 - (.06 i.e. 6%) * $ 250,000 + $ 4,000 + $ 1500

= $ 250,000 - $ 15,000 + $ 4,000 + $ 1,500

= $ 240000 + $ 5500= $ 245500

License fees of $ 800 and property and liability insurance of $ 2,500 will both be debited to <em>United Van Lines</em> P&L A/c.

Explanation: The items of list price, discount availed, truck title fees paid and cost incurred on painting the Truck are all included in capital expenditure i.e. one time expenditure of <em>United Van Lines</em>, thus they are all included in the <em>acquisition cost</em> of the truck.

The items of license fees and property and liability insurance of $ 800 and $ 2,500 respectively are both revenue expenditures i.e. repetitive expenditures, hence they both will be debited to P&L A/C as follows-

License fees a/c Dr.                                                    $ 800

Property and liability insurance a/c Dr.                       $ 2,500

                   To P&L a/c                                                                 $3,300

(License fees and property and liabilty insurance paid for 1st Year)

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Answer:

B) False

Explanation:

When the terms of trade improve, it means that a country is actually selling more goods and services to foreign countries than the total amount of goods and services it is importing from foreign countries. For every dollar that a country is exporting, it is importing less than 1 dollar. But this improvement in the terms of trade will actually result in an appreciation of the domestic currency. This means that for every dollar that you export, you will be able to import more goods from foreign countries.

3 0
2 years ago
Tom Noel holds the following portfolio: Stock Investment Beta A $150,000 1.40 B 50,000 0.80 C 100,000 1.00 D 75,000 1.20 Total $
exis [7]

Answer: -0.24

Explanation:

The portfolio beta is a weighted average of the betas of the individual stocks in it.

The portfolio beta before the replacement is;

= (1.4 * 150,000/375,000) + (0.8 * 50,000/375,000) + ( 1 * 100,000/375,000) + (75,000 * 75,000/375,000)

= 0.56 + 0.11 + 0.27 + 0.24

= 1.17

After the replacement, portfolio beta will be;

=  (0.75 * 150,000/375,000) + (0.8 * 50,000/375,000) + ( 1 * 100,000/375,000) + (75,000 * 75,000/375,000)

= 0.32 + 0.11 + 0.27 + 0.24

= 0.93

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6 0
2 years ago
LanWan Software earned net sales revenue of $62,000,000 in 2016. Cost of goods sold was $41,540,000​, and net income reached $9,
blagie [28]

Answer:

33%

Explanation:

Given that,

Net sales revenue = $62,000,000

Cost of goods sold = $41,540,000

Net income reached the​ company's highest ever = $9,000,000

Gross profit:

= Net sales revenue - Cost of goods sold

= $62,000,000 - $41,540,000

= $20,460,000

Therefore, the gross profit percentage is calculated by dividing the gross profit by the net sales.

Gross profit percentage for 2016:

= (Gross profit ÷ Net sales) × 100

= ($20,460,000 ÷ $62,000,000) × 100

= 0.33 × 100

= 33%

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3 years ago
Tasty Subs acquired a delivery truck on October 1, 2021, for $22,500. The company estimates a residual value of $2,700 and a six
mixer [17]

Answer: Depreciation expense for 2021 = $825

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Explanation:

Using  Straight line depreciation

We have that our Annual depreciation= Purchase price - salvage value / useful life.

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$3, 300

Depreciation expense for 2021  ( from October to December )

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Depreciation expense for 2022 (  From January  to December)

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