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3 years ago

What are the criteria for distinguishing between a deductible expense and a capital expenditure?

1 answer:

6 0

The criteria for distinguishing between whether an expenditure is a capital item or a deductible expense is the useful life of the item.

If the purchase is going to be used and no longer have value at the end of the reporting period it is an expense for that period. If the item is a capital item it is going to have a longer useful life. In this case the item is depreciated over its useful life, assigning an expense amount to each accounting period that the item has value.

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An investment will pay $100 at the end of each of the next 3 years, $200 at the end of Year 4, $300 at the end of Year 5, and $6

Tomtit [17]

Answer:

present value $ 1,026.16

future value $ 1,539.98

Explanation:

Present Value = $ 100 * 1/(1.07) ^ 1 + $ 100 * 1/(1.07) ^ 2 +$ 100 * 1/(1.07) ^3 + $ 200 * 1/(1.07) ^4 + $ 300 * 1/(1.07) ^5 +$ 600 * 1/(1.07) ^6

=93.45+ 87.34+81.62+152.20+213.23+398.32

= $ 1,026.16

therefore, the correct value is $ 1,026.16

b. Future Value = Present Value * ( 1+ Rate of Interest ) ^ Time

= $ 1,175.63 * ( 1+0.07) ^ 6

= $ 1,539.98

Hence the correct answer is $ 1,539.98

5 0

3 years ago

The ________ phase of the strategic marketing process usually results in a(n) ________ that sets the direction for the marketing

zhenek [66]

Answer:

planning; marketing plan

Explanation:

The planning phase is the second phase of any activity. It is basically made after analysis of all the problems and opportunities.

Planning phase basically aims at organizing the techniques for achieving the aims. This aims for planning phase to achieve the sales and set targets for gaining maximum performance in marketing. This sets all the strategies and policies for marketing.

7 0

3 years ago

Equipment purchased at the beginning of the fiscal year for $150,000 is expected to have a useful life of 5 years, or 15,000 ope

CaHeK987 [17]

Answer:

(a). Depreciation for 1st year= $24,000

Depreciation for 2nd year= $24,000

(b). 1st Year Depreciation = $20,000

for 2nd year depreciation = $26,000

(c) 1st year Depreciation= $60,000

2nd year Depreciation = $36,000

Explanation:

a).

Annual Depreciation of Equipment = (Cost of Equipment - Residual Value) ÷ Useful Life of Equipment

= ($150,000 - $30,000) ÷ 5

= $24,000

Rate of Straight Line Depreciation = Annual Depreciation of Equipment ÷ (Cost of Equipment - Residual Value) × 100

= 24,000 ÷ ( $150,000 - 30,000) × 100

= $24,000 ÷ $120,000 × 100 = 20%

Depreciation for 1st year= $24,000

Depreciation for 2nd year= $24,000

b). Unit Of Production For 1st Year Depreciation= (Cost Of Equipment -Residual Value) × Annual Production Units ÷ Total Operating Hours

= ($150,000 - $30,000) × 2,500 ÷ 15,000 = $20,000

Unit of Production for 2nd year depreciation = ( $150,000 - $30,000) × 32,50 ÷ 15,000

= $26,000

c). Declining Balance Depreciation Rate = Straight Line Depreciation Rate × 2

= 20% × 2 = 40% (Because Declining Balance at Twice the Straight Line Rate)

1st year Depreciation= $150,000 × 40÷100 = $60,000

2nd year Depreciation = ($150,000 - $60,000) × 40÷100 =$36,000

8 0

3 years ago

Plz plz plz help me with these two click the pic plz multi choice

makvit [3.9K]

Answer:

For the first multi choice, I think the answer is `whether or not there is enough competition to keep prices low and quality high'

For the second multi choice, I think the answer is `the market is failing to compensate those who are impacted by the sale of goods and services`

3 0

3 years ago

Suppose Lois usually buys two cups of coffee for two dollars each and one scone for two dollars each. If the price of scones fal

777dan777 [17]

Answer:

The correct answer is D. Real income effect.

Explanation:

Real income is defined as the monetary income of an individual, taking into account the effect of inflation. For example, if a person's nominal salary increases by 10% in one year, and inflation is 6% in that year, the actual income will have increased 4% in that year.

4 0

3 years ago