Asset: 120,000
Year 1: estimated useful life of 10 years. residual value of 10,000
120,000 - 10,000 = 110,000 / 10 years = 11,000 annual depreciation.
Start of year 3.
estimated useful life of 4 years. residual value of 2,000
120,000 - 2,000 = 118,000 / 4 = 29,500 annual depreciation.
29,500 x 2 = 59,000
11,000 x 2 = 22,000
59,000 - 22,000 = 37,000
59,000 + 37,000 = 96,000 / 2 = 48,000 annual depreciation for year 3 and year 4.
Beginning Balance: 120,000
Less: Depreciation:
Year 1 11,000
Year 2 11,000
Year 3 48,000
Year 4 48,000 <u> (118,000)</u>
Residual Value 2,000
Answer:
Requirement 1
Loss on Exchange $ 1,600 (debit)
New Model $58,000 (debit)
Accumulated Depreciation -Old Model $21,200 (debit)
Cost -Old Model $48,000 (credit)
Cash $32,800 (credit)
Requirement 2
Loss on Exchange 24,800 (debit)
New Model $26,800 (debit)
Accumulated Depreciation -Old Model $21,200 (debit)
Cost -Old Model $48,000 (credit)
Cash 24,800 (credit)
Explanation:
Note : the exchange lacks commercial substance.
IAS 16 gives an exception on the measurement of Cost of Acquired asset when the transaction lacks commercial substance.
The Acquired Asset will be Measured at Carrying Amount of Asset given up.Otherwise the Acquired Asset would be measured at Fair Value of Asset given up of Fair Value of Asset Acquired.
Carrying Amount of Asset Given up = Cost - Accumulated Depreciation
= $48,000 - $21,200
= $26,800
Answer: $49,000
Explanation: In order to calculate how much he will need to repay we first need to calculate the amount of interest that he will pay. The formula for interest is Interest = Principal x rate x time.
Using the formula, Interest = $35,000 x .08 x 5, Interest = $14,000
On July 1, 2022 Hugh will need to repay the principal that he borrowed, which was $35,000 plus the interest of $14,000, which is a total of $49,000.
Answer: I Honestly think the answers D.
Explanation: