Answer:
Net present value of the project is $2,903
Explanation:
Net present value is the net of present value of all cash inflow or outflow of a project. It measure the net outcome of a project in current value terms. All the cash flows are discounted using a required rate of return.
All the calculations and workings are in the attached MS excel find please find it.
Answer:
1. The Journal Entry
Sr. No Particulars Debit Credit
Tractor- Machinery $ 45000
Cash $6000
Notes Payable $ 39,000
The journal entry to record the acquisition of the tractor.
Working : Interest Expense Payable:
11% of 39,000= $ 4290
<u>2. Income Statement of 2021</u>
Revenues xxxxx
Less
Depreciation xxxxx
Interest Expense 4290
<u>Profit xxxx</u>
<u />
<u>2. Income Statement of 2022</u>
Revenues xxxxx
Less
Depreciation xxxxx
Interest Expense 4290
<u>Profit xxxx</u>
<u>3. Balance Sheet of 2021</u>
Debit Side
Truck $45000
<u>Less Depreciation xxxxx</u>
Credit Side
<u>Interest Payable 4290</u>
<u>3. Balance Sheet of 2022</u>
Debit Side
Truck $45000
<u>Less Depreciation xxxxx</u>
Credit Side
<u>Interest Payable 4290</u>
The answer is Business Districts
Answer:
a. $390,000
b. $15.6
c. $28,860
Explanation:
depreciable cost = cost of asset - salvage value = $420,000 - $30,000 = $390,000
(b) The depreciation rate $ per hour = depreciable cost / estimated useful life = $390,000 / 25,000 = $15.6
The units-of-output depreciation for the year = $15.6 x 1,850 hours = $28,860
Depreciation expense is added to net income in a statement of cash flows prepared using the indirect method
Depreciation expense is allocated portion of cost shown on the income statement that reduces the company's net income. It is considered as a non cash expense, hence it is added to the net income in a statement of cash flows.
Net income is used to measure cash flows from operating activities, hence depreciation expense must be added back to net income when using indirect method.
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