Answer:
C.
Explanation:
Im just guessing lol hopefully its right
It help you to keep your eyes on your prices
It helps ensure you don’t spend money you don’t have
It helps to prepare for emergencies
Answer:
Building C
Explanation:
Building A: Purchase for a cash price of $620,000, useful life 27 years.
Building B: Lease for 27 years with annual lease payments of $71,170 being made at the beginning of the year.
Building C: Purchase for $657,500 cash. This building is larger than needed; however, the excess space can be sublet for 27 years at a net annual rental of $6,200. Rental payments will be received at the end of each year.
11% cost of funds
we must determine the present value of each option:
- Building A's present value = $620,000
- Building B's present value = $71,170 x 9.48806 (PV annuity due factor, 11%, 27 periods) = $375,265.23
- Building C's present value = $657,500 - [$6,200 x 8.5478 (PV ordinary annuity factor, 11%, 27 periods) = $657,500 - $52,996.36 = <u>$604,503.64 (LOWEST PV)</u>
<u>Solution and Explanation:</u>
The following guidelines as per the previously issued FASB statements of the Financial Accounting Standards, and APB Opinions, or the accounting research bulletins and the staff positions.
<u>The appropriate match for the each of the pronouncement is as follows:
</u>
1. E (Interpretations)
2. C (Technical Bulletins)
3. B (Opinions)
4. D (Statements of Financial Accounting Concepts)
5. G (Accounting Research Bulletins)
6. A (The statements of the Financial Accounting Standards)
7. F (The Staff Positions)
Answer: The following journal entries would be recorded upon disposal of the equipment:
Debit Credit
Cash $100,000
Accumulated depreciation $140,000
Equipment $250,000
Loss on disposal of asset $10,000
Explanation: Using the straight-line method of depreciation, the following formula applies: (Historical cost - Salvage value) / No of years
<u>Depreciation = ($250,000 - $50,000) / 5 years = $40,000 yearly </u>
Accumulated depreciation (January 1, 2010 - July 1, 2013) for three and half years is $140,000 (3.5 years * $40,000). This means that the equipment had a net book value (NBV) of $110,000 as at the time of disposal. So, the above entries would eliminate the asset in the books and recognise the loss on disposal (sales proceed was less than the NBV).
