High-low pricing .............................
Answer:
depreciation expense 2017 = $180,000
depreciation expense 2018 = $144,000
depreciation expense 2019 = $115,200
Explanation:
purchase cost $900,000
estimated useful life 10 years
depreciation expense using double declining method = 2 x regular straight method depreciation rate x purchase cost
depreciation expense 2017 = 2 x 1/10 x $900,000 = $180,000
depreciation expense 2018 = 2 x 1/10 x $720,000 = $144,000
depreciation expense 2019 = 2 x 1/10 x $576,000 = $115,200
Answer: The correct answer is d. None of the above is correct.
Explanation: The intercompany gain realized would be recognized in the parent company's financial statements while at the consolidated position, the gain will be eliminated. For the parent to have recognized a gain on the capital asset, that means the proceed from sale was more than the net book value of the asset. So, there is no consolidated taxable income as regards this gain.
The $50,000 gain will be recognized by the subsidiary since it was sold to a nonmember of the group. However, it will not be nil at the consolidated position because it is not an intercompany transaction.
Scarcity is relevant to Charles and Ebony's budget because it helps them make a decision on how to spend their money on the urgent needs while ignoring the other important things which comes with a burden of future cost.
Tradeoff decisions would help Charles and Ebony to analyze the amount of money that they must set out every month for essentials, and discretionary money which is the money left over.
Opportunity cost
Opportunity cost looks at affordability given the prices of goods and the individual's income. Opportunity cost measures cost in terms of what must be given up in exchange.
Therefore the factors of scarcity, tradeoff and opportunity cost will affect Charles and Ebony's budget because they have to factor in the effects of these economic forces on the budget.
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Answer:
Net operating income $15,000
Explanation:
Flagger Company
Income statement for the year ended , 31 December
Fee earned
165,000
Less : Operating expenses
Salaries and wages 40,000
Rent expense. 51,000
(91,000)
Gross profit.
74,000
Less: Selling expense.
(44,000)
Profit before interest and tax.
30,000
Less interest expense.
(18,000)
12,000
Add: Interest income.
3,000
Net operating income.
15,000
