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Nana76 [90]
3 years ago
15

On january 1, 2016, knapp corporation acquired machinery at a cost of $1,250,000. knapp adopted the double-declining balance met

hod of depreciation for this machinery and had been recording depreciation over an estimated useful life of ten years, with no residual value. at the beginning of 2019, a decision was made to change to the straight-line method of depreciation for the machinery. the depreciation expense for 2019 would be
Business
1 answer:
Annette [7]3 years ago
5 0
Cost on January 1 2016 = $1,250,000
Life = 10 years

Therefore,
Double-declining depreciation rate = 2*(1,250,000/10)/1,250,000 = 2*0.1 = 2*10% = 20%
Book value at end of 2016 = 1,250,000 - (1,250,000*20/100) = $1,000,000
Book value at end of 2017 = 1,000,000 - (1,000,000*20/100) = $800,000
Book value at end of 2018 = 800,000 - (800,000*20/100) = $640,000

Changing to straight line depreciation:
Life remaining = 7 years
Book value = $640,000

Depreciation expense per year = 640,000/7 = $91,428.57

Therefore, depreciation expense for 2019 = $91,428.57

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Over the past year you earned a nominal rate of interest of 10% on your money. The inflation rate was 5% over the same period. T
Veronika [31]

Answer:

5%

Explanation:

Purchasing power refers to the amount of goods and services a unit of currency can buy.

Purchasing power can be determined by finding the real interest rate.

Real interest rate = Nominal interest rate - inflation rate

10% - 5% = 5%

I hope my answer helps you

5 0
3 years ago
Current operating income for Bay Area Cycles Co. is $34,000. Selling price per unit is $100, the contribution margin ratio is 25
leonid [27]

Answer:

break even point in unit =5440 units

break even point in sales = $544000

total sale = $680000

Explanation:

given data

Current operating income = $34,000

Selling price = $100

margin ratio = 25%

to find out

Bay Area Cycle’s break even point in units and total sales dollars

solution

we get here first break even point that is express as

break even point in unit =  \frac{fixed\ cost}{contribution\ per\ unit}   ..................1

break even point in unit =  \frac{136000}{100*0.25}

break even point in unit =5440 units

so

break even point in sales =  \frac{fixed\ cost}{margin\ ratio}   ..................2

break even point in sales = \frac{136000}{0.25}

break even point in sales = $544000

and

total sales will be

total sale =  \frac{operating\ income+ fixed\ expense}{margin\ ratio}   ..................3

total sale =  \frac{34000+136000}{0.25}

total sale = $680000

3 0
3 years ago
Researchers set up a study to determine whether large doses of a nutritional supplement would shorten the length of time it take
ozzi
<span>This study indicates that nutritional supplements do not have an affect on the common cold. The volunteers that were given the supplement did not experience any significant differences in the duration of their cold. They had the cold for the same duration that the volunteers who were given the placebo did.</span>
4 0
3 years ago
Warrants exercisable at $20 each to obtain 30,000 shares of common stock were outstanding during a period when the average marke
aivan3 [116]

Answer:

The increase in weighted average number of common shares is by 6,000 shares

Explanation:

Application of treasury method is used for exercising the warrants.

Outstanding Common shares = Number of shares / Market price * Exercisable price

= 30,000 shares / $25 * $20

= 24,000 shares

After the warrants have been exercise, the increase in weighted average number of common shares is as follows:

Increase in weighted average number of shares = 30,000 shares - 24,000 shares

= 6,000 shares

Thus, the increase in weighted average number of common shares is by 6,000 shares.

3 0
3 years ago
Tobang Company is in the process of setting its target capital structure. The CFO believes the optimal debt ratio is somewhere b
Alex787 [66]

Answer:

The Ideal Capital structure is approximately 20% of Debt and 50% of Equity. Thus, Optimal Capital Structure of Tobang Company is 40:60.

At 40% debt ratio the company’s Weighted Average Cost of Capital (WACC) is minimized.

Explanation:

3 0
3 years ago
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