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Alona [7]
3 years ago
7

On January 1, 2018, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truc

k has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2019, the truck was exchanged for a new truck valued at $60,000. Jacob received a trade allowance of $35,000 on the exchange with the remaining $25,000 paid in cash. What amount of gain or loss should Jacob Inc. record on December 31, 2019?
A. Loss, $18,000.
B. Gain, $5,000.
C. Loss, $38,000.
D. Loss, $3,000.
Business
1 answer:
Norma-Jean [14]3 years ago
5 0

Answer:

option (D) loss, $3,000

Explanation:

Given:

price of the truck = $48,000

estimated residual value = $8,000

Exchange price of the truck = $60,000

Trade allowance = $35,000

Since, straight line depreciation is given, thus,

Total depreciation = \frac{\textup{48,000−8,000}}{\textup{8}}

or

Total depreciation = $5,000 per year

Therefore,

the book value after two years

= Price of truck - total depreciation in two years

or

= $48,000 − ($5,000 × 2 years)

= $38,000

Now,

a trade allowance received ( i.e $35,000 ) is less than the book value

therefore a loss is recorded

The amount of loss = (Book value - trade allowance received)

or

The amount of loss =  $38,000 - $35,000 = $3,000

Hence, correct answer is option (D) loss, $3,000

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Answer:

a.$121,375

Explanation:

Increase in account receivable means there is more credit sales were made during the year than the cash received from the customers. So, cash will be used in the period by account recivables.

According to indirect method cash flow will be adjusted as follows

Net Income                                            $143,124

Net Increase in Rceivables                  ($21,749)

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Cash Flow from Operating Activites   <u> $121,375</u>

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3 years ago
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Use the following information to answer Questions 12 - 15. Below is selected data for Gertup Corporation as of 12/31/05: Gertup
alukav5142 [94]

Answer:

the cash that should be freed up is $267

Explanation:

The computation of the cash that would be freed up is shown below:

As we know that

The inventory turnover is

= Cost of goods sold ÷ average inventory

12 = $14,800  ÷ average inventory

So, the average inventory is 1,233

Now the cash that should be freed up is  

= 1,500 - 1,233

= $267

hence, the cash that should be freed up is $267

4 0
3 years ago
Ions:
kicyunya [14]

Answer: The answers are provided below.

Question:

Here is the complete question:

Marian, a top graduate from Loyola in Humanities, was hired by a major corporation into a management position. Marian finished the corporation's management training program top in her group, and is performing above the norm in her position. She is really enjoying her work.

As a woman she feels isolated, as there are no other women managers and few women in her area. One night at a company party she heard a conversation between two of her male co-workers and their supervisor. They were complaining to him about Marian's lack of qualifications and her unpleasant personality. They cursed affirmative action regulations for making the hiring of Marian necessary.

Marian is very upset and wants to quit.

Questions:

a. Should Marian quit?

b.Are her co-workers correct in their evaluation?

c. Should Marian confront the co-workers?

d. Should Marian file a discrimination suit?

e. Should Marian go to the supervisor?

f. What else could Marian do?

Explanation:

a. No, Marian does not have to quit her job but should rather face the situation. She came top in her group during the management training and she deserves to stay in her position and continue to perform well. She is doing well at her role and the opinion of others does not matter.

b. No, Marian co-workers are not correct with regards to their evaluation. She has sufficient and good qualifications which was the reason she got the job and she is also performing well. Also, Marian does not have an unpleasant personality but rather feels isolated because she is the only woman. Her colleagues should help her out in order to deal with the situation.

c. Yes, Marian should go and confront her co-workers. The co-workers have a wrong image of Marain in their minds and she should speak to them and clear the issues. This will help her to be more social with her male colleagues are also build a better working relationship.

d. No, Marian should not file a discrimination suit. The comments made by her co-workers were not discriminatory but rather she was misunderstood at work due to her reserved personality. She should relate better with her colleagues, be social and also build a bond with her colleagues.

e. Marian should go to her supervisor only when she was not successful when she confronted her colleague. She should confront her co-workers first and if that doesn't work, she can then go to her supervisor.

f. Marian should become social and be more friendly with her colleagues. She should talk and relate with her male colleagues. She can discuss work related issues with them and sometimes offer a helping hand. This would help build a bond.

8 0
3 years ago
To prepare common-size financial statements, each line item needs to be calculated to a common-size percent. The formula for com
Helen [10]

In accounting, the formula for common-size percent is (Amount / Base amount) * 100.

<h3>What is a common size income statement?</h3>

This is a financial statement where every line item are expressed as a percentage of the value of sales in other to make analysis easier.

In this analysis, the percentage of the base is the ratio of the line item versus the total amount.

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5 0
3 years ago
The following amounts were reported on the December 31, 2019, balance sheet:
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Answer:

a. $50,000

b. 2.25 times

c. 0.75 times

Explanation:

a. The formula to compute the working capital is shown below:

Working capital = Current assets - current liabilities

where,

Current assets = Cash + accounts receivable + merchandise inventory

                        = $16,000 + $44,000 + $60,000

                        = $90,000

And, the current liabilities would be

= Wages payable + accounts payable

= $10,000 + $30,000

= $40,000

Now put these values to the above formula

So, the value would be equal to

= $90,000 - $40,000

= $50,000

b.  Current ratio = Total Current assets ÷ total current liabilities  

= $90,000 ÷ $40,000

= 2.25 times

c. Acid-test ratio = Total Current assets - merchandise inventory  ÷ total current liabilities  

= $90,000 - $60,000 ÷ $40,000

= 0.75 times

7 0
4 years ago
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