Answer:
$679,700
Explanation:
I believe Mickelson is the person preparing the books for Indigo Inc.
This question tests your knowledge of revaluation and its application to financial statements. It indirectly checks your knowledge of depreciation also.
A quick definition of terms would make it clearer.
Depreciation is the systematic allocation of the price of an asset over its useful life. That is once an asset (non-current) is purchased, it cannot be used up immediately in one financial year, hence accountants usually want to spread the use of the asset and match it with whatever revenue they get from the use of the asset (an application of prudence concept).
But land does not depreciate, rather it appreciates over time. Due to the fact that land appreciates over time, it would be misrepresentation on the part of Mickelson to report the value of the asset in December 2017 at the price in which the land was purchased in 2000.
Because land appreciates over time, a revaluation is more appropriate. this revaluation compares the carrying value of the land with the fair value on the land as at the date of revaluation (comparing $418,200 with $679,700) and the higher is used.
Hence to faithfully represent the current details of the status of the land, the IFRS (International Financial Reporting Standards) states that the entity should record the value of land at fair value.
I hope this is clear and easy to understand.
Other concepts you might want to check out are;
depreciation
carrying amount
revaluation surplus
fair value
Answer:
PV= $74,999.97
Explanation:
Giving the following information:
Interest rate= 0.036/4= 0.009
Number of quarters= 5*4= 20
Future value= $89,719
We need to determine the initial inventment. We will use the following formula:
PV= FV/(1+i)^n
PV= 89,719/ (1.009^20)
PV= $74,999.97
The amount that the farmer paid for the tractor, which is the net price after discounts, is $126,543.75.
<h3>What is the net price?</h3>
The net price is the difference between the sticker price and the discount of 15% received off the sticker price.
<h3>Data and Calculations:</h3>
Sticker price of tractor = $148,875
Discount reduction 15%
Amount paid = $126,543.75 ($148,875 x 1 - 0/15)
Thus, the farmer paid $126,543.75 for the tractor at the dealership.
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Answer:
The correct answer is the option A: True.
Explanation:
To begin with, a common mistake made in the companies that are not well managed, is that those organizations focuses in the profit orientation and also most of the time those companies have <em>marketing myopia</em>, a concept that explains that they focuses on the product and not on the client and their needs. Therefore that it is understandable that Classic Creatives has not yet adopted a customer orientation, that focuses on satisfying the twenty percent of the customers that give the company the eighty percent of the profits, according to the<em> 80/20 rule of the Pareto Principle</em>.
Answer:
$165,000
Explanation:
Free cash flow is the net cash cash flow available for the shareholders or for the reinvestment after paying all capital expenditure.
The Depreciation is already adjusted in the Cash Flow from operating activities.
Free Cash Flow = Cash Flow from operating activities - Dividend payment - Capital expenditure
Free Cash Flow = $335,000 - $60,000 - $110,000 = $165,000
Current and Long term liabilities has nothing to do in free cash flow calculations.
