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Lapatulllka [165]
3 years ago
7

Lucky started a new business last year. Since it was the first year of operation, the business purchased $10,000 in machinery an

d used the straight-line method for deprecation. Business is booming, so lucky purchased $15000 in equipment during the current year to help meet production demands. Which of the following statements is true regarding the depreciation choices available to lucky.a. The new machinery can be depreciated using the same method or different method than the previously purchased machineryb. IF lucky wants to use a different depreciation method, he must recapture depreciation and change the method used on the prior purchase of machineryc. The new machinery must be depreciated using the same method as the previously purchased machinery
Business
1 answer:
Jet001 [13]3 years ago
6 0

Answer:

The answer is: A) The new machinery can be depreciated using the same method or different method than the previously purchased machinery

Explanation:

Their is no rule that requires a business to always use the same depreciation method for the assets they purchase.

The most common depreciation methods include:

  • Straight-line.
  • Double declining balance.
  • Units of production.
  • Sum of years digits.

Depending on the asset a business may consider one depreciation method that better suits it, and another depreciation method for their other assets.

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A company will make $74,000 in annual revenue each year for the next seven years from a new investment. The interest rate of 7.2
UkoKoshka [18]

Answer:

The present value is $395,354.84

Explanation:

The computation of the Present value is shown below

= Present value of all yearly cash inflows after applying discount factor

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,  

rate is 7.25%  

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.0725 ^ 1 = 0.9324

For Year 2 = 1 ÷ 1.0725 ^ 2 = 0.8694

For Year 3 = 1 ÷ 1.0725 ^ 3  = 0.8106

For Year 4 = 1 ÷ 1.0725 ^ 4  = 0.7558

For Year 5 = 1 ÷ 1.0725 ^ 5  = 0.7047

For Year 6 = 1 ÷ 1.0725 ^ 6  = 0.6571

For Year 7 = 1 ÷ 1.0725 ^ 7  = 0.6127

So, the calculation of a Present value of all yearly cash inflows are shown below

= (Year 1 cash inflow × Present Factor of Year 1) + (Year 2 cash inflow × Present Factor of Year 2) + (Year 3 cash inflow × Present Factor of Year 3) + (Year 4 cash inflow × Present Factor of Year 4)  + (Year 5 cash inflow × Present Factor of Year 5)  + (Year 6 cash inflow × Present Factor of Year 6)  + (Year 7 cash inflow × Present Factor of Year 7)

= ($74,000 × 0.9324 ) + ($74,000 × 0.8694  ) + ($74,000 × 0.8106 )  + ($74,000 ×  0.7558 )  + ($74,000 × 0.7047  ) + ($74,000 × 0.6571 )  + ($74,000 × 0.6127  )

= $68,997.67  + $64,333.49  + $59,984.61  + $55,929.70  + $52,148.91  + $48,623.69  + $45,336.77

= $395,354.84

We take the first four digits of the discount factor.  

4 0
2 years ago
6.
romanna [79]

Answer:

This may help you to solve it

3 0
2 years ago
Copperhead Trust has the following classes of​ stock: LOADING...​(Click the icon to view the​ data.) Read the requirementsLOADIN
sergeinik [125]

Answer:

Find attached complete question:

common stock dividends is $38,960

preferred stock dividends is $5,040

Explanation:

Going by the complete question,preferred stock dividends is computed thus:

preferred stock dividends=number of shares*par value*dividend rate

number of shares is 7000 (issued and outstanding)

par value of share is $12

dividend rate is 6%

preferred stock dividend=7000*$12*6%=$5040

The preferred stockholders would receive $5040 dividends while the remainder of dividends goes to common stockholders as shown below

Total dividends                              $44,000

preferred stock dividends             ($5040)

common stock dividends              $38,960

Download xlsx
6 0
2 years ago
Kayleigh is looking over a number of material requisition slips from her employees. She has to sign off on each request after re
dedylja [7]

Answer:

B. No, approval by an individual other than the requestor establishes greater accountability over inventory.

Explanation:

This step is required as it will ensure control over inventory usage.

3 0
3 years ago
The transactions of Spade Company appear below.
s2008m [1.1K]

Answer:

Entries are given

Explanation:

We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.

                                            DEBIT           CREDIT

A. Kacy Spade, owner, invested cash in the company

Common stock                   14250

Cash                                                           14250

B. The company purchased office supplies

Office supplies                      413

Cash                                                              413

C.The company purchased office equipment on credit

Office equipment                 7880

Payables                                                      7880

D.The company received $1,681 in cash

Cash                                       1681

Fees earned                                                 1681

E. The company paid $7,880 cash to settle the payable

Payables                                7880

Cash                                                              7880

F. The company billed a customer $3,021 as fees

Receivable                              3021

fees earned                                                   3021

G. The company paid $520 cash for the monthly rent.

Rental expense                        520

Cash                                                               520

H. The company collected $1,269 cash as partial payment

Cash                                         1269

Receivables                                                    1269

I. The company paid a $1,000 cash dividend to the owner

Retained earnings                  1000

Cash                                                                 1000

5 0
2 years ago
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