Answer:
option (a) $10,800
Explanation:
Data provided in the question:
Useful life of the machine = 5 years
Residual value = $15,000
Purchasing cost = $45,000
Now,
The rate of depreciation under the double declining method
Rate of depreciation =
or
Rate of depreciation =
or
Rate of depreciation = 0.4 or 40%
Therefore,
Depreciation expense for the year 1
= Rate of depreciation × Book value in year 1
= 0.40 × $45,000
= $18,000
Book value in year 2 = $45,000 - $18,000
= $27,000
Depreciation expense for the year 2
= Rate of depreciation × Book value in year 2
= 0.4 × $27,000
= $10,800
Hence,
The correct answer is option (a) $10,800
D sounds like the best answer
Answer:book value at end of year 5=$188,500.
Explanation:
Depreciation per year= (Cost-Salvage value)/Useful life
=(400,000-20,000)/10= $38000 per year
Book value after 4 years, Beginning of year 5= Cost - depreciation x number of years
$400,000 - (38000 x 4)= $248,000
Depreciation per year now= (Cost-Salvage value)/Useful life
($248000-$10,000)/4 = $59,500 per year.
Therefore, book value at end of year 5=Book value at the beginning of year 5 - depreciation
$248,000- $59,500 )= $188,500.
Answer:
They should not be able to successfully negotiate the terms of this loan within these parameters.
Explanation:
It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.
if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.
Interest = $10,000*0.12
= $1,200
RT requires $1,200 in interest.
It has been provided that Cynthia earns 8% on her investment.
If she borrows $10,000 and invests the amount for one year, she can earn 8% return on such amount.
Earning = $10,000*0.08
= $800
Cynthia is going to earn $800
RT requires a minimum of $1,200 as interest for 1-year loan he gives while Cynthia can pay a maximum of $10,000 as interest for 1-year loan she takes. there is mismatch between the minimum expectation to receive of lender and the maximum expectation to pay of borrower.
Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.
Answer:
The corret answer is b. decrease assets and decrease liabilities.
Explanation:
First entry
Earnings Accrued (- Net Equity)
to various creditors (+ Liabilities)
Since the minutes of the assembly must indicate that they are taken from the profits of previous years, the accumulated profits are reduced.
Second entry
Miscellaneous creditors (- Liabilities)
to Banks (- Active)
The first entry represents transfer from one liability to another liability. Although we think that capital accounts are not liabilities, it is not true, given that the value of debt to shareholders of the value of your company, so we can group everything in the same bag.
When decreeing dividends, what is done is to cover a small part of that company value. That is, when dividends are decreed, they become part of a formalized liability.
The second entry is the cancellation of the liability, through one of the ways to extinguish the obligations: payment.