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3 years ago

Disposal of Fixed Asset

Business

1 answer:

andreev551 [17]3 years ago

4 0

Answer:

$328000

Explanation:

Given: Cost of machine= $880000

Residual value= 60000

Estimated life= 10 years

Company use straight line depreciation method.

∴ Depreciation = $\frac{\textrm{cost of machine- residual value}}{estimated\ useful\ life}$

⇒ Depreciation= $\frac{880000 - 60000}{10} = \frac{820000}{10}$

∴ Depreciation= $\$ 82000$ per year.

Now, lets find the value of depreciation.

∵ Machine is sold on December 31, 2019, which is 6 years after it is installed.

∴ Depreciation value after 6 years= $\textrm{Depreciation value every year \times number of years used}$

Depreciation value after 6 years= $82000\times 6 = \$ 492000$

Next, finding the value of machine after 6 years of depreciation.

Value of machine after 6 years= $820000 - 492000= \$ 328000$

∴ Disposal value of machine after 6 years of usage is $\$ 328000$ , however, machine was sold at $225000.

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Answer:

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3 years ago

The calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the

ANTONII [103]

Answer:

A. True

Explanation:

The terms of 2/10, net 30 implies that the firm is entitled to receive a 2 percent discount if it makes payment within 10 days for the goods it bought on term but the seller expects to pay full amount of the amount due in 30 days if it fails to pay within 10 days.

However, since there will be no more discount after the discount period, the cost of trade credit will continue to fall longer the payment is extended. For this question this can be demonstrated using the formula for calculating the cost of trade discount as follows:

Cost of trade discount = {[1 + (discount rate / (1 - discount rate))]^(365/days after discount)} - 1 ................... (1)

We can now applying equation (1) as follows:

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Cost of trade credit (payment in 40 days)= {[1 + (0.02 / (1 - 0.02))]^(365/40)} - 1 = 0.202436246672765, or 20%

For payment in 30 days

Cost of trade credit (payment in 30 days) = {[1 + (0.02 / (1 - 0.02))]^(365/30)} - 1 = 0.278643315029666, or 28%

Conclusion

Since the 20% calculated cost of trade credit for payment in 40 days is lower than 28% calculated cost of trade credit for payment in 30 days, the correct option is A. True. That is, the calculated cost of trade credit for a firm that buys on terms of 2/10, net 30, is lower (other things held constant) if the firm plans to pay in 40 days than in 30 days.

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3 years ago

Allowance for Doubtful Accounts will have a.an unadjusted debit balance at the end of the period if the write-offs during the pe

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Answer:

A. an unadjusted credit balance at the end of the period if the write-offs during the period were less than the beginning balance.

Explanation:

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3 years ago

The management of Indiana Corporation is considering the purchase of a new machine costing $400,000. The company's desired rate

OLga [1]

Answer:

The average rate of return for this investment is 21%

Explanation:

Average rate of return : The average rate of return shows the ratio between average net income and average initial investment.

Mathematically,

Average rate of return = Average Net income ÷ Average Initial Investment

where Average Net income = Total years of net income ÷ Number of years

= ($100,000 + $60,000 + $30,000 + $10,000 + $10,000) ÷ 5

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And, Average Initial Investment = Initial Investment ÷ 2

= $400,000 ÷ 2

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3 years ago

What is Internal information ?

kiruha [24]

Answer:

Internal information is any information, oral or recorded in electronic or paper format, maintained by the District or used by the District or its employees.

Explanation:

HOPE THIS HELPS AND HAVE A NICE DAY <3

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2 years ago