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Anastasy [175]
3 years ago
10

The asset's book value is $70,000 on June 1, Year 3. On that date, management determines that the asset's salvage value should b

e $5,000 rather than the original estimate of $10,000. Based on this information, the amount of depreciation expense the company should recognize during the last six months of Year 3 would be:____________
a) $8,125.00
b) $7,375.00
c) $4,062.50
d) $3,750.00
e) $7,812.50
Business
1 answer:
aniked [119]3 years ago
5 0

Answer:

The correct answer is C that is $4,062.50

Explanation:

The depreciation expense is computed as:

Depreciation expense = Book Value of asset - Salvage Value / Number of years × 6/ 12

where

Book value is $70,000

Salvage value is $5,000

Number of years is 8 because it is Year 3

Number of months is 6 months

= $70,000 - $5,000/ 8 × 6/ 12

= $65,000 / 8 × 6/ 12

= $8,125 × 6/ 12

= $4,062.50

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An agent who buys and sells securities from inventory is called a: 1) broker. 2) commission broker. 3) floor broker.4) floor tra
stepladder [879]

Answer:

5) Dealer

Explanation:

1) Broker: A person who arranges a transaction between two parties

2) Commission Broker: The person who executes buy and sell orders on behalf of customers.

3) Floor Broker: The person who executes buy and sell orders on the floor of an exchange and charges his fee for it.

4) Floor Trader: The person who buys and sells for his personal account and owns a trading license.

5) Dealer: An agent who buys and sells securities from inventory.

4 0
2 years ago
Presented below are three transactions. Mark each transaction as affecting owner's investment (I), owner's drawings (D), revenue
emmasim [6.3K]

Answer:

a. revenue (R), affecting owner's investment (I)

b. not affecting owner's equity (NOE)

c. expense (E) and affecting owner's investment (I)

Explanation:

Revenues and Expense form Profits which are included in the statement of changes in equity through the Retained Income line item, thus these two also affect owners investment.

7 0
3 years ago
Jack's Construction Co. has 80,000 bonds outstanding that are selling at par value. Bonds with similar characteristics are yield
zheka24 [161]

Answer:

WACC 10.42614%

Explanation:

<u>First we use CAPM to solve for the cost of equity</u>

Ke= r_f + \beta (r_m-r_f)  

risk free 0.04

market rate  

premium market (market rate - risk free) 0.08

beta(non diversifiable risk) 1.1

 

Ke= 0.04 + 1.1 (0.08)  

Ke 0.12800

Then we calculate the WACC (weighted average cost of capital)

WACC = K_e(\frac{E}{E+D}) + K_d(1-t)(\frac{D}{E+D})

D 80,000 bonsd x 1,000 = 80,000,000

E 4,000,000 shares x 40 = 160,000,000

E+ D 80,000,000 + 160,000,000 = 240,000,000

equity weight: 2/3

liability weight: 1/3

Ke 0.128

Equity weight 0.6667

Kd 0.086

Debt Weight 0.3334

t 0.34

WACC = 0.128(0.6667) + 0.086(1-0.34)(0.3334)

WACC 10.42614%

6 0
3 years ago
A working capital managers role is to manage: Select one: a. accounts receivable and payable only. b. cash, inventory, accounts
Dima020 [189]

Answer:

b. cash , inventory, accounts receivable, accounts payable and risk management

Explanation:

Working capital is defined as a measure that shows how a company is operating efficiently and it's ability to meet the short term financial obligations.

When a business working capital is properly managed, then the business will be healthy financially hence operate successfully and able to meet up with it's daily obligations.

A good working capital manager must be able to make use of working capital management to maintain balance between profitability, growth and liquidity. The role of working capital manager is also to manage cash, inventory, accounts receivable and payable and risk management.

A working capital manager must be able to manage cash that will be used for a business daily operation, must ensure the business inventories are properly managed and accounted for. It's duty also include risk management as he is responsible for making decisions regarding day to day finance of a business operation; the success or failure in terms of meeting up with short term financial obligation depends on him.

6 0
2 years ago
Indirect costs are traced to cost objects.
Aneli [31]

Answer:

Explanation:

The following statement is false and true

1. Indirect costs are traced to cost objects - This statement is false because it is not directly traced to the cost objectives. It is traced through the cost drivers.  

2. Yes, this statement is true because the cost drivers are used to allocate the indirect cost to their cost objects

3. Yes, this statement is true because for computing the allocation rate, we have to divide the total allocation cost to its allocation base

4.  Yes, this statement is true because the cost drivers play very important for cost allocation. Without cost drivers, the allocation of the cost would not be possible

5. This statement is false because depreciation should be allocated based on its useful life  rather than the number of square feet because the number of square feet occupied is used to allocate the renting cost

8 0
3 years ago
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