1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alexxx [7]
4 years ago
6

Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 2

50,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 80,000 miles in 2018, 55,000 miles in 2019, 51,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $53,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes.
Calculate the net income for 2021? (Round "Per Unit Cost" to 3 decimal places.)
Business
1 answer:
anygoal [31]4 years ago
6 0

Answer:

Net Income Calculation for 2021

                                                Company A       Company B       Company C

Revenue                                    $53,000             $53,000             $53,000

Less Depreciation Expense     ($15,000)             ($0.00)              ($16,800)

Net Income / (Loss)                   $38,000             $53,000             $36,200

Explanation:

Company A

Depreciation Expense (Straight line) : (Cost - Salvage Value) / Number of Useful Life

2021 = ($62,000-$2,000) / 4

        = $15,000

Company B

Depreciation Expense (Double Declining Balance) : 2 × SLDP × BVSLD

SLDP = 100/ 4

         = 25%

2018 = 2 × 25% × $62,000

        = $ 31,000

2019 = 2 × 25% × ($62,000 - $ 31,000)

        = $ 15,500

2020 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 )

        = $ 7,750

2021 = 2 × 25% × ($62,000 - $ 31,000 - $ 15,500 - $ 7,750 )

        = 0

In 2021 depreciation will only be allowed where:

Book Value = Salvage Value

<em>Test to see if Book Value has fallen below Salvage Value :</em>

Cost                                                 $62,000

Less Accumulated depreciation    $54,250

Book Value                                      $ 7,750

Company C

Depreciation Expense (units-of-production) : (Cost - Salvage Value) × Period`s Production / Total Expected Production

2021 = ($62,000-$2,000) × 70,000/  250,000

        = $16,800

Net Income Calculation for 2021

                                                Company A       Company B       Company C

Revenue                                    $53,000             $53,000             $53,000

Less Depreciation Expense     ($15,000)             ($0.00)              ($16,800)

Net Income / (Loss)                   $38,000             $53,000             $36,200

You might be interested in
An investor enters into a short oil futures contract when the futures price is $15.5 per barrel. The contract size of 100 barrel
Nikolay [14]

Answer:

$150

Explanation:

Calculation to determine How much does the investor gain or lose if the oil price at the end of the contract equals $14.0

Using this formula

Gain or Loss =(Futures price- Ending contract)*Contract size

Let plug in the formula

Gain or Loss=$15.5 per barrel- $14.0* 100 barrels

Gain or Loss=$1.5*100

Gain or Loss=$150

Therefore How much does the investor gain or lose if the oil price at the end of the contract equals $14.0 will be $150

3 0
3 years ago
A firm recently replaced an existing piece of machinery with a different model that produces a higher-quality finished product w
MissTica

Answer:

capitalize the new cost as an asset to be amortized over future periods expected to benefit

Explanation:

A capitalized cost is a cost which is added to the cost basis of a fixed asset on a company's balance sheet. This Capitalized costs are sustained from the purchase or construction of fixed assets.  Example of such costs are costs of materials, sales taxes, labor, transportation, and interest incurred to finance the construction of the asset.

This is usually done for items that would be used over a long period of time, therefore the item is capitalized and amortized or depreciated over its future periods.

7 0
3 years ago
Read 2 more answers
Which of the following is useful for making rational choices?
ehidna [41]

Answer:

financial planning

Explanation:

It is best to be prepared. most things we want to do cost money. It is very easy to loose track of spending money.

8 0
3 years ago
Read 2 more answers
Producing one yard of cloth requires 3 worker and 1 capital, while producing one pound of food requires 1 worker and 2 capital.
Afina-wow [57]

Answer:

d. 3QC + QF = 720

Explanation:

The labor constraint is the resource limitation in terms of labors. If labor resource is scarce then production schedule needs to prepared with special attention to utilize the resource in best possible way. The labor constraint  is 3QC + QF = 720 for the ROW.

5 0
3 years ago
Managers are important members of the organization. Within an organization, there are managers at four levels: top, middle, firs
Zolol [24]

Answer:

1. Pat is Middle Level.

Pat is trying to implement the strategic goals of the company which are set by Top Management. That would make Pat a Middle level manager.

2. Rick is Top Level.

Rick is developing the policies for the entire company which would place Rick at Top Manager level.

3. Daisy is a First-line Manager

Daisy is responsible for the loading products such that it is done effectively. This is an operational duty which would place Daisy at First-line level.

4. Ruth is a First-Line Manager

Ruth directs art staff who are non-managers which would make Ruth a first-line manager

5. Gary is Top Level

By developing projections on long term growth, that means Gary contributes to strategic decisions thereby making Gary top level.

6. Greg is Middle Level

Greg is in charge of first line managers which places him directly on top of them which means he is a middle level manager.

7. Mike is a Team Leader

Mike is in charge of the team which is the textbook role of a team leader.

8. Nancy is a Team leader

The members of the team go to Nancy when they need to resolve conflict or when they want to coordinate their activities. As the team leader is in charge of team coordination, Nancy must therefore be a team leader.

5 0
3 years ago
Other questions:
  • Dorn purchased the rights to extract turquoise on a tract of land over a five year period. Dorn paid $200,000 for extraction rig
    8·1 answer
  • Consider the following duopoly in which the two firms sell a homogeneous product. The inverse demand is given by p = 10 − 1 2 Q.
    14·1 answer
  • Although equity theory suggests that both partners who are overbenefited and underbenefited feel uncomfortable, the partner who
    13·1 answer
  • "In connection with a new issue offering of a sought-after tech company issue, the underwriter offers shares to the officers of
    5·1 answer
  • A. On 1/1/Y1, the firm issued 10,000 nonqualified stock options to employees. The shares are currently trading for $10 per share
    10·1 answer
  • Employees who are paid a portion of the profit from the sale of a product or service are paid on a(n).
    12·1 answer
  • A profit firm in a competitive industry should ________ when marginal costs are falling.
    10·1 answer
  • Mark Company’s balance sheet reported total assets of $754,000, which include: cash, $48,000; accounts receivable, $130,000; lan
    9·1 answer
  • Derst Inc. sells a particular textbook for $27. Variable expenses are $20 per book. At the current volume of 43,000 books sold p
    9·1 answer
  • According to a summary of the payroll of Mountain Streaming Co., $110,000 was subject to the 6.0% social security tax and the 1.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!