All categories

3 years ago

a company bought a piece of equipment for A200 and expects to use it for eight years. The company that plans to

Business

1 answer:

chubhunter [2.5K]3 years ago

7 0

Answer:

The correct option b. $2,567.

Explanation:

Note: This question is not complete. The complete question is therefore provided before answering the question as follows:

A company bought a piece of equipment for $49,200 and expects to use it for eight years. The company then plans to sell it for $4,000. The company has already recorded depreciation of $42,632.60. Using the double-declining-balance method, what is the company's annual depreciation expense for the upcoming year? (Round your answer to the nearest whole dollar amount.)

a. $11,300.

b. $2,567.

c. $19,200.

d. $1,642.

The explanation to the answer is now given as follows:

Note: See the attached excel file for the calculation of the annual depreciation expenses.

Double declining depreciation method is an accelerated depreciation technique due to the fact the depreciation expenses are charged faster under it than under straight-line depreciation method.

The depreciation of double declining method is calculated by by multiplying the rate of straight-line depreciation method by 2.

From the question, the already recorded depreciation of $42,632.60 is the accumulated depreciation expenses for the 7th year.

Since the upcoming year is the 8th year which is the last year, the depreciation expense for it can be calculated as by adjusting for the residual value of $4,000 follows:

Equipment cost = $49,200

Accumulated Depreciation = $42,632.60

Residual value = $4,000

Estimated useful life = 8 years

Therefore, we have:

Straight line method depreciation rate = 1 / Estimated useful life = 1 / 8 = 0.125, or 12.50%

Double declining depreciation rate = Straight line method depreciation rate * 2 = 12.50% * 2 = 25%

Beginning book value of the equipment in the upcoming year or in the 8th year = Equipment cost - Accumulated Depreciation = $49,200 - $42,632.60 = $6,567.40

Annual depreciation expense for the upcoming year or for the 8th year = Beginning book value of the equipment - Residual value = $6,567.40 - $4,000 = $2,567

Therefore, the correct option b. $2,567.

Download xlsx

You might be interested in

Which of the following is not one of the three conditions that characterizes a perfectly competitive market? A. Firms have pric

mart [117]

Answer: Option A

Explanation: In simple words, perfect competition refers to a market structure in which the the market have a large number of small buyers and sellers.

Due to this high volume of small level buyers and sellers no single party has the power to influence the price. The price in such market are determined by the market forces of demand and supply.

Hence from the above we can conclude that the correct option is A.

3 0

2 years ago

A manufacturer makes and sells 2 products, P and Q. The revenue from the sale of each unit of P is $20.00 and the revenue from t

Ganezh [65]

Answer:

$18

Explanation:

Since the manufacturer sold twice as many units of Q than P, that means it at least sold 1 unit of P and 2 units of Q.

to determine the arithmetic mean (average) revenue per unit:

total revenue = P + 2Q = $20 + (2 x $17) = $20 + $34 = $54

arithmetic mean (average price) = $54 / 3 = $18

6 0

2 years ago

Paper Co. had net income of $70,000 during the year. Dividend payment was $10,000. The followinginformation is available:Mortgag

Marina CMI [18]

Answer:

net cash provided by operating activities 60,000

Explanation:

net income 70,000

Change in working Capital

Increase Inventory (40,000)

Increase Account payable 30,000

Net change in working capital (10,000)

net cash provided by operating activities 60,000

The working capital is the current asset and current liabilities.

the dividend, bonds and mortgare are not operating activities.

the securities are considered cash.

3 0

3 years ago

1. If the current allocation of resources in a market for a certain good is efficient, then it must be the case that

sweet-ann [11.9K]

Answer:

Explanation:

6 0

2 years ago

According to the consumer bill of rights, the idea that consumers' interests should receive full and sympathetic consideration i

Serga [27]

Answer:

right to the consumer.

Explanation:

According to the customer bill of rights, in this doctrine the consumers' enthusiasm should obtain adequate and compassionate deliberation in the formulation of the government strategy is identified as the right to the consumer. Proceeding from March 15 the year 1962, President John F. Kennedy portrayed a conversation to the Congress of the US in which the president extolled 4 fundamental customer powers, following described as Consumer Bill of Rights. The UN by the UN guide-manual for Consumer Protection extended those into 8 equities, and consequently, Consumers International affirmed those equities as law and began identifying on 15 of the March as World Consumer Rights.

3 0

3 years ago