"consumers often face a trade-off between ______ and _____

Ivanhoe company purchased machinery with a list price of $88000. They were given a 7% discount by the manufacturer. They paid $4

cestrela7 [59]

Answer:

A) $6194

Explanation:

Price before discount = $88,000

discount rate = 7%

Amount of discount = 7% *$88,000 = $6,160

Price after discount = Price before discount - Amount of discount

= $88,000 - $6,160

Price after discount = $81,840 (this is the price included in depreciation)

Items included in total cost of machinery;

Price of machinery after discount = $81,840

Shipping cost = $400

Sales tax = $4,700

Therefore, total cost is therefore = $81,840 + $400 + $4,700 = $86,940

Depreciation per year = (Total cost of the machinery - salvage value) / useful life

= (86,940 - 25,000)/ 10

= 61,940/10

= 6,194

Therefore annual depreciation = $6,194

8 0

3 years ago

Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal ta

katen-ka-za [31]

Answer:

Nissan's all-electric car, the Leaf

PV cost of Leaf Purchase = $16,529

PV cost of Leasing = $12,944.78

The company should lease the car.

Explanation:

a) Costs incurred to purchase the Leaf:

Base price $32,780

less Federal tax credit ($7,500)

Charging station 2,200

less 50% tax credit (1,100)

Cash paid $26,380

Sales value after 3 yrs (9,851) ( $26,380 - 40% of base discounted to PV)

Net PV Investment $16,529

b) Calculation of Discounted Present Values of Payments under Leasing, using online financial calculator:

PV (Present Value) $12,944.78

N (Number of Periods) 3.000

I/Y (Interest Rate) 10.000%

PMT (Periodic Payment) $4,200.00

Starting Investment $2,500.00

Total Principal $15,100.00

Total Interest $2,129.50

c) The purchase of the Leaf would involve a present value cost of $26,380 after deducting all the savings from tax. The 40% sales value of the car at the end of 3 years = $13,112 ($32,780 x 40%). When this sales value is discounted to PV of $9,851, the PV of the car investments becomes $16,529 ($26,380 - $9,851). On the other hand, leasing will cost in PV the sum of $12,944.78

.

6 0

3 years ago

A company bought a computer for$1,500. Three years later, the computer was sold for $300.

madam [21]

The accounts that will be used to record the disposal of the assets are Gain/loss on sale of asset and Sales Income

<h3>What is a disposal account?</h3>

A disposal account calculates the gain or loss account that appears in the income statement.

The disposal account records the difference between the disposal proceeds and the net carrying amount of the fixed asset being disposed of.

Hence, the account that will be used to record the disposal of the assets is Gain/loss on sale of asset and Sales Income

Read more about assets disposal

<em>brainly.com/question/1357713</em>

6 0

2 years ago

In taking a physical inventory at the end of Year 1, Grant Company forgot to count certain units and understated ending inventor

Rina8888 [55]

Answer:

a. Overstates Year 1 cost of goods sold.

b. Understates Year 1 net income

c. Understates Year 2 cost of goods sold

Explanation:

a. The formula for Calculating the Cost of Goods sold is;

<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>

If the closing inventory is understated, it will reduced the amount being subtracted from Purchases and Opening inventory which would means that Cost of Goods sold will be overstated.

b. The Cost of goods sold is deducted from sales to give Gross profit. If Cost of goods is overstated, it will reduce Gross Profit higher than it should. A lower Gross Profit equates to a lower Net Income.

c. Going by the formula in <em>a;</em>

<em>Cost of Goods Sold = Opening inventory + Purchases - Closing inventory.</em>

In Year 2, the understated Year 1 closing stock will become the understated Year 2 Opening stock. With the opening stock understated, the Cost of goods will be understated as well because Opening stock is meant to increase Cost of goods sold as the formula shows. If it is understated, the amount that it will add will be understated as well.

4 0

3 years ago

Kumar Inc. uses a perpetual inventory system. At January 1, 2020, inventory was $214,000,000 at both cost and realizable value.

MAVERICK [17]

Answer:

A. Dr Cost of Goods Sold $21,000,000

Cr Allowance to Reduce Inventory to Market $21,000,000

B. Dr Loss Due to Market Decline of Inventory $21,000,000

Cr Allowance to Reduce Inventory to Market $21,000,000

Explanation:

A.Preparation of the necessary December 31 entry under the cost-of-goods-sold method

COST-OF-GOODS-SOLD METHOD

Dr Cost of Goods Sold $21,000,000

Cr Allowance to Reduce Inventory to Market $21,000,000

($286,000,000 - $265,000,000)

B.Preparation of the necessary December 31 entry under the Loss method

LOSS METHOD

Dr Loss Due to Market Decline of Inventory $21,000,000

Cr Allowance to Reduce Inventory to Market $21,000,000

($286,000,000 - $265,000,000)

7 0

3 years ago

"consumers often face a trade-off between ______ and ______."

"consumers often face a trade-off between and ."