Answer:
The accumulated depreciation at 31 December 2019 is $144000
Explanation:
When recording the purchase of a fixed asset, the asset should be recognized at cost at which the asset is purchased plus all the necessary costs that are incurred to bring the asset to the location and in the condition necessary to use as required and intended by the management.
The equipment purchased by Mather should be recorded as,
Cost of equipment = 336000 + 6000 + 30000 = $372000
The freight and installation are non recurring and necessary expenses to bring the asset to the location and in the condition for use as intended by management. So, these expenses are capitalized.
The straight line depreciation charges a constant depreciation expense every year through out the useful life of the asset.
Straight line depreciation = (Cost - Salvage Value) / estimated useful life
Straight line depreciation per year = (372000 - 12000) / 5
Straight line depreciation per year = $72000
So, the accumulated depreciation at 31 December 2019 is,
Accumulated depreciation = 72000 + 72000 = $144000
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Answer:
a. Average total cost minus average fixed cost.
Explanation:
- Total cost of production (TC) can be expressed as the sum of two elements: total fixed cost (F) -those cost that do not vary with output level - and total variable cost (V) - which are those cost that vary with the level of production.
- Average total cost (ATC) is simply the division of total cost by the output produced (Q):
. - Average variable cost (AVC) is the division of variable cost by the output produced:
. - Then, average variable cost can be obtained by :
- dividing the total variable cost by output (option c) or
- subtracting to average total cost the fixed average cost (
), (option a).
Answer:
$66,700
b. LIFO = $70800
67807.81
Explanation:
LIFO means last in first out. It means that it is the last purchased inventory that is the first to be sold.
(8130 x 8) + [(9090 - 8130) x 6) = 70800
FIFO means first in, first out. It means that it is the first purchased inventory that is the first to be sold
(3010 x 6) + [(9090 - 3010) x $8] = 66,700
Average cost = [(3010 x 6) + (8130 x 8)] /
18060
48640
b 65040
5760
