Answer:
Consider the following calculations
Explanation:
Step 1. Given information.
Asset Cost Adjusted Basis
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Skidder 230,000 40,000
Driller 120,000 60,000
Platform 620,000 0
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Total 970,000 100,000
Step 2. Formulas needed to solve the exercise.
Allocation for each asset = value sold * (adjusted basis / total)
Gain on sale = Sales price - Adjusted basis amount
Step 3. Calculation and Step 4. Solution.
Sales price is allocated on the basis of adjusted value.
- Skidder = 300.000 * 40.000/100.000 = 120.000
- Driller = 300.000*60.000/100.000 = 180.000
- Platform = 300.000*0/100.000 = 0
Gain on sale = Sales price - Adjusted basis amount
= 300.000 - (40.000 + 60.000 + 0)
= 200.000
Answer:
$31,104
Explanation:
EBIT / 12,000
= [EBIT - ($120,000 × .072)] / [12,000 - ($120,000 / $36)]
EBIT = $31,104
Therefore the minimum level of earnings before interest and taxes that the firm is expecting will be $31,104
Answer:
The answer is: Montana should recognize its revenue equally throughout the year as they provide their services.
Explanation:
The accrual basis of accounting recognizes revenue when earned. This means that Montana Corporation should recognize revenue when its service has been performed, regardless of when those services were paid. That means they should recognize revenue equally throughout the year (every month) as they provide their services.
Answer: reduce output.
Explanation:
In a competitive market, firms do not have control over the price that they sell their goods in the market but they do have control over their costs. It is recommended to produce/ sell goods at a quantity where Marginal Revenue will equal Marginal cost (MR = MC).
In a Competitive Market, Price is the same as Marginal revenue which means that Marginal revenue here is $25 and the Marginal Cost is $26. At this quantity of output, the Marginal Cost is larger than the Marginal revenue.
Company should therefore reduce output to a quantity where Marginal Cost will equal Marginal revenue.
Answer:
The answer is continuous budgeting.
Explanation:
This(continuous budgeting) is a method of preparing budgets for future periods(example periods can be monthly, quarterly etc.) revisiting them during current periods, and making adjustments at the end of the period. It is also known as rolling budget.
The advantages are:
1. It helps in reducing the uncertainty of budgeting.
2. It helps the management to know where the company is moving in terms of sales and profitability.
Disadvantage:
1. It is time consuming.
