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balandron [24]
3 years ago
9

A company purchased new furniture at a cost of $14,000 on september 30. the furniture is estimated to have a useful life of 8 ye

ars and a salvage value of $2,000. the company uses the straight-line method of depreciation. how much depreciation expense will be recorded for the furniture for the first year ended december 31?
Business
2 answers:
Lesechka [4]3 years ago
8 0

Answer: The company will record a depreciation of $375  as depreciation.

We begin by calculating the depreciable value of the asset.

Depreciable Value = Purchase Price of the Asset - Salvage Value

Depreciable Value = 14,000 - 2,000 = 12,000

The depreciable value is $12,000.

The useful life of the asset is 8 years from the date of purchase.

So, the depreciation for one year will be \frac{Depreciable Value}{Useful Life}.

Hence the depreciation for one year is \frac{12000}{8} = 1500

Since the equipment was purchased at the end of September, we can only charge depreciation for 3 months on 31st December.

So, the depreciation expense will be \frac{1500}{12} * 3 = 375

valentina_108 [34]3 years ago
4 0

Depreciation expense for the first year of the rebate is calculated by the following calculation:

Depreciation expense = acquisition cost of fixed assets - residual value: economic life of fixed assets

Is known :

Cost of fixed assets = $ 14,000

Residual value = 8

Economic age = $ 2,000

Settlement:

Depreciation expense = 3 / 12x [($ 14,000 - $ 2,000): 8 years]

Depreciation expense = $ 375

So the depreciation expense for the first year is $ 375

Note: "Where is the value from 3/12? So in 1 year, there are 12 months, and the furniture began to be used at the end of September. So during the first years, the machine was used in the months: October - November - December. So in the first year, the furniture is used for 3 Months, then depreciation for 3 Months: 7/12

<h2>Further explanation </h2>

Depreciation or depreciation is an accounting term that is defined as a decrease in the value of a fixed asset due to time and use. Fixed assets that experienced depreciation include machinery, whether office equipment in the form of computers, printers, and calculating machines or mining machinery or factories, vehicles, furniture, and buildings.

As you already know, the depreciation method consists of several methods, including:

  • Straight-line Shrinkage Method
  • Double Decreased Depreciation Method
  • Depreciation Method Number of Year Figures
  • Depreciation Unit Work Hours Method
  • Depreciation Method of Production Unit

But in this discussion, we will discuss the Straight Line Method. Below is the explanation.

Straight Line Method

This straight-line method assumes that fixed assets will contribute evenly throughout their use. So that fixed assets will experience the same level of decline in function from period to another period until the fixed assets are not reused in the company's operational activities.

The fixed assets depreciation formula is a straight-line method:

Depreciation = acquisition cost of fixed assets - residual value: economic life of fixed assets

Can also use a percentage:

Depreciation = Percentage of depreciation x acquisition cost - Residual value/Economic life of fixed assets

Learn more

Straight-line method brainly.com/question/14208414, brainly.com/question/6982430

Details

Class: College

Subject: Bussines

Keyword: Method of depreciating straight-line goods.

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Answer:

      Journal Entry for establishing a Petty cash fund

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Jan 1      Petty cash A/c     $270  

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Journal Entry for reimbursement of petty cash

Date      Particulars             Debit      Credit

Jan 8     Postage A/c                  $36  

             Transportation A/c        $13  

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                    To Cash A/c                           $89

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Jan 8     Petty Cash A/c             $50  

                   To Cash A/c                             $50

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6 0
3 years ago
Journalize the following five transactions for Nexium &amp; Associates, Inc. Omit explanations.March 1 - Bills are sent to clien
emmasim [6.3K]

Answer: Please find answers in explanation column

Explanation:

Journal entry for Nexium & Associates

1.Journal to  record Services provided in February.

Date              Account                      Debit                           Credit

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 2.Journal to record purchase of furniture and supplies on account.

March 9      Office furniture         $1,060

               Office supplies             $160

          Accounts payable                                                          $1,220

3.Journal  To record payment made to suppliers, Corner Office Inc.

March 15      Accounts payable          $1,220

                          Cash                                                                  $1,220

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March 23       Electricity expense        $430

           Outstanding Liabilities                                                     $430

5.Journal To record the salary payment to employees.

March 31       Salaries expense                 $850

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3 0
3 years ago
Assume you have two projects with different lives. Project A is expected to generate present value cash flows of $5.2 million an
Alex787 [66]

Answer:

$1,033,190.69 ; better

Explanation:

Given:

Present value of cash flow of Project A (PV) = $5,200,000

Maturity (nper) = 7 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 7, -5200000)

=$1,033,190.69

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project A is $1,033,190.69

Project B:

Given:

Present value of cash flow of Project A (PV) = $3,800,000

Maturity (nper) = 5 years

Required return (rate) = 9%

Annual annuity (pmt) can be computed using spreadsheet function =pmt(rate,nper,PV,FV). Substituting the values, we get,

=pmt(0.09, 5, -3800000)

=$976,951.34

FV is 0. Present value is negative as it's cash outflow.

Annual annuity of Project B is $976,951.34

Annual annuity of Project is more than that of Project B, So Project A is better than Project B.

8 0
3 years ago
A low P/E for a stock indicates that:
pishuonlain [190]

Answer:

(A). People may expect earnings to fall in the future, perhaps because the firm will be faced with increased competition.

Explanation:

Price Earnings ratio of a company represents market price per share of a company's stock in relation to it's earnings per share.

Price Earnings ratio(PER) is given by the following formula:

PER = \frac{Market\ Price\ Per\ Share}{Earnings\ Per\ Share}

A lower P/E Ratio indicates that a company's market price of a share is lower relative to it's earnings. This means the company's stock is undervalued.

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Investors in general expect lower earnings in future for the stock of a company with low P/E Ratio.

6 0
3 years ago
A wire having a mass per unit length of 0.440 g/cm carries a 1.50-A current horizontally to the south. (a) What is the direction
coldgirl [10]

Answer:

B = 0.287  Tesla

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Explanation:

F = BiL sin∅

note that F = mg

B = magnetic field

i = current

therefore,

mg = BiLsin∅

Make B subject of the formula

B = mg/iLsin∅

m/L = mass per length of the wire and it is given in gram per centimeter . It should be converted to kg per meter.

m/L = 0.440 g/cm

convert to kg/m = 0.440 × 0.001 kg × 100 m = 0.044  kg/m

B = 9.8 × 0.044 / sin 90 × 1.50 × 1

B = 0.4312/ 1.50

B = 0.28746666666

B = 0.287  Tesla

According to thumb rule the direction of magnet is to the east.

4 0
3 years ago
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