Unsubsidized Stafford Loans:

An x-ray machine at a dental offi ce is MACRS 5-year property. The x-ray machine costs $6,000 and has an expected useful life of

Brrunno [24]

Answer:

The correct answer is $2,637.31.

Explanation:

According to the scenario, the computation of the given data are as follows:

Cost of machine = $6,000

According to MACRs table depreciation for first 3 years are as follows:

Depreciation for 1st year = 20%, for 2nd year = 32% and for 3rd year = 19.2%

So, Cost of machine after 1st year = $6,000 - 20% × $6,000 = $6,000 - $1,200

= $4,800

Cost of machine after 2nd year = $4,800 - 32% × $4,800 = $4,800 - $1,536

= $3,264

Now, Cost of machine after 3rd year = $3,264 - 19.2% × $3,264

= $3,264 - $626.688 = $2,637.312

So, the book value at the end of three years = $2,637.31

3 0

3 years ago

Carver Lumber sells lumber and general building supplies to building contractors in a medium-sized town in Montana. Data regardi

german

Answer:

$55,300

Explanation:

Calculation to determine what The net income for December would be:

NET INCOME FOR DECEMBER

Revenue $327,000

Less cost of goods sold ($228,900)

(70%*$327,000)

Gross profit $98,100

($327,000-$228,900)

Less Depreciation ($17,400)

Less Operating expenses ($25,400)

Net Income $55,300

Therefore The net income for December would be:55,300

3 0

3 years ago

The following transactions and adjusting entries were completed by Robinson Furniture Co. during a three-year period. All are re

riadik2000 [5.3K]

Answer:

Year 1

Jan. 8. Purchased a used delivery truck for $24,000, paying cash.

Dr Truck 24,000
Cr Cash 24,000

Mar. 7. Paid garage $900 for changing the oil, replacing the oil filter, and tuning the engine on the delivery truck.

Dr Maintenance expenses - Truck 900
Cr Cash 900

Dec. 31. Recorded depreciation on the truck for the fiscal year. The estimated useful life of the truck is four years, with a residual value of $4,000 for the truck.

Depreciation expense = 2 x 0.25 x $24,000 = $12,000

Dr Depreciation expense 12,000
Cr Accumulated depreciation - truck 12,000

Year 2

Jan. 9. Purchased a new truck for $50,000, paying cash.

Dr Truck new 50,000
Cr Cash 50,000

Feb. 28. Paid garage $250 to tune the engine and make other minor repairs on the used truck.

Dr Maintenance expenses - Truck 250
Cr Cash 250

Apr. 30. Sold the used truck for $9,500. (Record depreciation to date in Year 2 for the truck.)

depreciation expense = 2 x 0.25 x 4/12 x $12,000 = $2,000

Dr Depreciation expense 2,000
Cr Accumulated depreciation - truck 2,000

truck sold at $9,500 - $10,000 (carrying value) = -$500 loss on sale

Dr Cash 9,500
Dr Accumulated depreciation 14,000
Dr Loss on sale - truck 500
Cr Truck 24,000

Dec. 31. Record depreciation for the new truck. It has an estimated residual value of $12,000 and an estimated life of eight years.

Depreciation expense = 2 x 0.125 x $50,000 = $12,500

Dr Depreciation expense 12,500
Cr Accumulated depreciation - truck new 12,500

Year 3

Sept. 1. Purchased a new truck for $58,500, paying cash.

Dr Truck three 58,500
Cr Cash 58,500

Sept. 4. Sold the truck purchased January 9, Year 2, for $36,000. (Record depreciation to date for Year 3 for the truck.)

Depreciation expense = 2 x 0.125 x 8/12 x $37,500 = $6,250

Dr Depreciation expense 6,250
Cr Accumulated depreciation - truck new 6,250

truck sold at $36,000 - $31,250 (carrying value) = $4,750 gain on sale

Dr Cash 36,000
Dr Accumulated depreciation 18,750
Cr Truck new 50,000
Cr Gain on sale - truck new 4,750

Dec. 31. Recorded depreciation on the remaining truck. It has an estimated residual value of $16,000 and an estimated useful life of 10 years.

Depreciation expense = 2 x 0.1 x 4/12 x $58,500 = $3,900

Dr Depreciation expense 3,900
Cr Accumulated depreciation - truck three 3,900

5 0

3 years ago

An investor owns 60 shares of common stock of a company issuing new shares in a rights offering. The stock trades at $12 per sha

Mkey [24]

Answer:

7 shares and $70

Explanation:

The computation is shown below:

The additional shares is

= 60 shares ÷ 9

= 7 shares

And, the amount of money that have to be paid is

= Additional shares × purchase price

= 7 × $10

= $70

Therefore the same would be considered relevant

4 0

3 years ago

Depreciation for a tax-paying firm:_________.

r-ruslan [8.4K]

Answer: a) increases expenses and lowers taxes.

Explanation:

Depreciation accounts for the wear and tear in fixed assets over their period of use. It is accounted for every period in the Income Statement as an expense which means that its addition increases the business's expenses.

It does that the advantage of being tax deductible however. This then means that it can be subtracted from Net Income for tax purposes. When that is done, it will reduce the Net Income thereby reducing the amount of taxes that can be charged on the company.

5 0

3 years ago