4.

Where would revenue be maximized for a company facing a linear demand curve

Bond [772]

Answer:

at equilibrium point

Explanation:

equilibrium when price is reasonable to both sellers and buyers. They are willing to buy and sell at optimal quantity, so that firm can maximize revenue

3 0

2 years ago

Loban Company purchased four cars for $9,000 each and expects that they will be sold in 3 years for $1,500 each. The company use

VLD [36.1K]

Answer:

a). The journal entries required to record the acquisition of the four cars are as follows:

i) credit motor vehicle account with the amount paid to purchase the four cars = $ 36,000

ii) Credit bank account with the the amount paid to purchase the four cars = $ 36,000

b). The journal entries required to record the 1st year's depreciation expense :

i) Debit the motor vehicle expense account with the amount accruing for the periods expense =$ 10,000 .

ii) Credit the accumulated depreciation with the same amount = $ 10,000 .

b) The journal entries required to record the gain on disposal of the motor vehicle is as follows:

i) Debit the Cash account by amount gained = $ 500 .

ii) Debit the Accumulated depreciation account by amount = $ 500 .

iii) Credit the Motor vehicle account by amount = $ 500 .

iv) Credit the Gain on disposal account by amount = $ 500 .

Explanation:

a). Determining the depreciation expense

Step 1

Get the purchase price for all the four cars using the expression below;

Total purchase price=purchase price per car×number of cars purchased

where;

purchase price per car=$9,000

number of cars purchased=4

replacing;

Total purchase price=(9,000×4)=36,000

Total purchase price=$36,000

Step 2

Determine the salvage value after the useful life as shown;

Salvage value=selling price per car×number of cars

where;

selling price per car=$1,500

number of cars=4

replacing;

Salvage value=(1,500×4)=6,000

Salvage value=$6,000

Step 3

Determine the depreciation base as shown;

depreciation base=total purchase price-salvage value

where;

total purchase price=$36,000

salvage value=$6,000

replacing;

depreciation base=(36,000-6,000)=$30,000

annual depreciation cost=depreciation base/useful life

annual depreciation cost=30,000/3

annual depreciation cost=$10,000

The first year's depreciation expense=$10,000

Therefore, expected journal entries are as follows:

i) credit motor vehicle account with the amount paid to purchase the four cars = $ 36,000

ii) Credit bank account with the the amount paid to purchase the four cars = $ 36,000

b). The journal entries required to record the 1st year's depreciation expense :

i) Debit the motor vehicle expense account with the amount accruing for the periods expense =$ 10,000 .

ii) Credit the accumulated depreciation with the same amount = $ 10,000 .

b). Determining whether car was sold at a loss or gain.

Car book Value = Acquisition cost - Accumulated depreciation

Car book Value = 9,000 - 2,500 = $ 6,500

Loss /Gain = Consideration price( disposal price) - Acquisition cost

Loss /Gain = $7,000 - $6,500 = $ 500

The company realized a gain of = $ 500

Therefore, expected journal entries are as follows:

i) Debit the Cash account by amount gained = $ 500 .

ii) Debit the Accumulated depreciation account by amount = $ 500 .

iii) Credit the Motor vehicle account by amount = $ 500 .

iv) Credit the Gain on disposal account by amount = $ 500 .

7 0

3 years ago

QUICK ONE!

never [62]

Answer:

Rate is 1.5 times the straight line depreciation rate which is;

= $\frac{80,000}{8}$

= $10,000 per year

Rate = $\frac{10,000}{80,000}$ * 100%

=12.5%

Reducing balance rate = 12.5% * 1.5

= 18.75%

The Depreciation Schedule would be;

Year Beginning Book Value Depreciation Expense Accumulated Depreciation Book Value

1 $80,000 80,000*18.75% = $15,000 $15,000 $65,000

2 $65,000 65,000 * 18.75% = $12,1875.50 $27,187.50 $52,812.50

3 $52,812.50 52,812.5 *18.75% = $9,902.34 $37,187.84 $42,910.16

4 $42,910.16 42,910.16 * 18.75% = $8,045.66 $45,233.50 $34,766.50

5 $34,766.50 34,766.50 * 0.1875 = 6,518.72 $51,752.22 $28,247.78

6 $28,247.78 28,247.78 * 0.1875= $5,296.45 $57,048.67 $22,951.33

7 $22,951.33 22,951.33 * 0.1875= 4,403.37 $61,452.04 $18,547.96

8 $18,547.96 18,547.96 * 0.1875 = $3,477.74 $80,000 $0

$3,477.74 + 15,070.22= $18,574.96

Depreciation for the last year was not sufficient to take the truck to $0 so the remainder will be depreciated in that year so that it may be completely depreciated.