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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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Barnes Company reports the following operating results for the month of August: sales $305,000 (units 5,000); variable costs $21
Ostrovityanka [42]

Answer:

1. $30,500;

2. $30,000;

3. $22,000;

=> Option 1 produce the highest net income.

Explanation:

We have sell price per unit = 305K /5K = $61

1.  Increase selling price by 10% with no change in total variable costs or sales volume:

Sell price = 61 x 1.1 = $67.1

Sales revenue = 67.1 x 5,000 = $335,500

Increase in sales revenue = 335.5K - 305K = $30,500

As costs remains the same, Net income will increase as much as the increase as sales revenue which is $30,500.

2.  Reduce variable costs to 60% of sales:

New variable cost = $305,000 x 60% = $183,000

Saving in variable cost = 213K - 183K = $30,000

As fixed cost and sales revenue remain the same, net income will increase as much as the saving in variable cost which is $30,000

3. Reduce fixed costs by $22,000:

As variable cost and sales revenue remain the same, net income will increase as much as the saving in fixed cost which is $22,000

6 0
3 years ago
Justin deposits $4,000 into an IRA account that earns an annual interest rate of 6.5%. If he makes no additional deposits, how m
Liula [17]

Answer:

The Future value at year time is $4,260

Explanation:

The future value at the end of the year one can be found by using the compounding formula which is as under:

Future Value = Present Value * (1 +r)^n

Future Value  = $4,000 * (1.065)^ 1 = $4,260

8 0
3 years ago
What are the advantages of electronic communication
fiasKO [112]

Answer:

IT HEPLS TO SOLVE ECONOMIC PROBLEMS ABOUT TRADITIONAL SUPERSTATION

5 0
3 years ago
Read 2 more answers
Suppose we have a bond issue currently outstanding that has 20 years left to maturity. The coupon rate is 8% And coupons are pai
cluponka [151]

Answer:

c. 10%

Explanation:

The Yield to Maturity(YTM) of the Bond is the cost of the debt. So, we need to find the YTM first.

Here i will use a Financial Calculator to enter and compute the YTM as follows :

N = 20× 2 = 40

PMT = ($1,000 × 8%) ÷ 2 = $40

PV = $828

P/YR = 2

FV = 1,000

I or YTM = ?

Thus the cost of the Bond is 10%

3 0
3 years ago
Ronald Rawls and Zabian Bailey were in an auto accident in Bridgeport, Connecticut. Bailey rear-ended Rawls at a stoplight. Evid
guapka [62]

Answer:

Yes, Rawls could collect.

Explanation:

It is possible that Rawls collects damages due to negligence. This is due to the fact that the main cause of the accident was not substantiated by the Progressive Northern Insurance Company. The company claimed that the accident could have been caused by a series of events and the company was also not certain about the main cause of the accident.

4 0
3 years ago
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