A. The initial investment is a significant cash outflow that is treated separately from all other cash flows
Answer:
Profit= $1600
The profit which firm is generating is $1600.
Explanation:
Formula:
Profit= Total Selling Cost- Total Actual Cost
Profit= (Price at which unit is sold*Number of units) - (Average cost*Number of units)
In our case:
Number of units=800 units
Price= $6
Average cost= $4
Profit= ($6*800) - ($4*800)
Profit= ($4800) - ($3200)
Profit= $1600
The profit which firm is generating is $1600.
Answer:Don's casualty loss deduction=$ 770
Explanation:
A Casualty loss is an unexpected or sudden financial loss that occurred as a result of damage or loss of property. It will be calculated as follows
Adjusted basis at the time of accident $1,500
Repair cost on account of accident $2,750
Amount of casualty loss before the adjustments $ 1,500
( which is the Lessor of $ 1,500 and $ 2,750)
Deduct :
Reimbursements gotten from insurance $ 730
Don's casualty loss deduction = $ 1,500 - $ 730 = $ 770
Answer:
$3,160
Explanation:
Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.
It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset
.
Given that Williams Company purchased a machine costing $28,300 and is depreciating it over a 10-year estimated useful life with a residual value of $3,300,
Annual depreciation
= ($28,300 - $3,300)/10
= $2,500
At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,300,
Net book value at the beginning of the eighth year (before overhauling)
= $28,300 - 7($2,500)
= $10,800
Capitalizing the overhaul cost,
Net book value at the beginning of the eighth year (after overhauling)
= $10,800 + $8,300
= $19,100
Given that the total estimated useful life was changed to 12 years with the residual value unchanged,
Depreciation for the eighth year
= ($19,100 - $3,300)/5
= $15,800/5
= $3,160
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
