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-Dominant- [34]
3 years ago
5

Charm Co. owns a delivery truck with an original cost of $10,000 and accumulated depreciation of $7,000. Charm acquired a new tr

uck by exchanging the old truck and paying $2,000 in cash. The new truck has a fair value of $5,000 at the time of the exchange. What amount of gain or loss should Charm recognize?
Business
1 answer:
Kazeer [188]3 years ago
4 0

Answer:

no loss or gain should be recognized by the Charm

Explanation:

Given:

Original cost of the truck = $10,000

Accumulated depreciation of the truck = $7,000

Thus,

the value of the truck after depreciation = $10,000 - $7,000 = $3,000

The amount paid with the exchange of the truck = $2,000

Therefore, the total considerable amount paid for the new truck

= value of the truck after depreciation +  amount paid with the exchange

= $3,000 + $2,000

= $5,000

Also, the fair value of the truck  = $5,000

Since, the amount total considered amount paid by the charm co. for the new truck is equal to the fair value of the truck.

Hence, there no loss or gain should be recognized by the Charm

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Select the correct text in the passage.
AfilCa [17]

Answer:   I heard its the second option, I cannot verify that. But i do have the awnsers to every question for the final in Entrepreneruship, Its on quizlet labeled Entrepreneurship. 37 terms.

Explanation:

5 0
2 years ago
Sabv Corporation's break-even-point in sales is $840,000, and its variable expenses are 75% of sales. If the company lost $34,00
zhuklara [117]

Answer:sales must have amounted to:$704,000

Explanation:

Contribution ratio = Sales ratio - Variable cost ratio

= 100%- 75%

=25%

Sales to break even = Fixed expenses / Contribution margin ratio

Therefore,

 Fixed expenses = Sales to break even   x  Contribution margin ratio

=$840,000 x 25%

=$210,000

Contribution margin can also be calculated as

Fixed expenses- Operating loss

=$210,000 -$34,000

=$176,000

Sales = Contribution margin/ Contribution ratio

= $176,000/25% =$704,000

5 0
2 years ago
d (i). Suppose that ZX Inc. is currently selling at $50 per share. You buy 200 shares, using $5,000 of your own money and borrow
strojnjashka [21]

Answer:

-21%

Explanation:

Initial share price = $50

Share price after 1 year = $46

net return = (200 x $46) - $10,000 - ($5,000 x 5%) = $9,200 - $10,000 - $250 = -$1,050

rate of return of margined position = -$1,050 / $5,000 = -0.21 = -21%

when you operate on the margin, your earnings can increase or decrease dramatically. In this case, an 8% price decrease resulted in a 215 lose.

8 0
3 years ago
The managers at Movo Automobile Inc. want to diversify their business by acquiring a consumer electronics company. This acquisit
quester [9]

Answer:

C.principal-agent problems.

Explanation:

The acquisition of Movo Automobile is a typical example of AGENCY COST. Under the Agency cost theory, managers are agents of shareholders who represents principal in the principal - agent problem.

Agency cost is a situation where agents become selfish and pursue strategies and policies that will promote the self interest of agents and cause dissatisfaction to principals.

4 0
2 years ago
Tallow​, Inc. had reported the following​ balances: LOADING...​(Click the icon to view the 2018 and 2019 ​balances.) 11. Compute
Pachacha [2.7K]

Answer:

Explanation:

Rate of return on common stockholder's equity for 2019:

= (Net Income - Preferred Dividend) / Av. common stockholder's equity

= ($94,000 - $26,000) / $312,000

= $68,000 / $312,000

= 0.2179 or 21.79%

Av. common stockholder's equity 2019 :

Total stockholder's equity 2018 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred

= $318,000 - $22,000

= $296,000

Total stockholder's equity 2019 ( Common) = Total stockholder's equity - Stockholder's Equity attributable to preferred

= $350,000 - $22,000

= $328,000

Av. common stockholder's equity 2019 = ($296,000 + $328,000) / 2 = $312,000

7 0
3 years ago
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