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Mumz [18]
3 years ago
6

Cutter Enterprises purchased equipment for $72,000 on January 1, 2011. The equipment is expected to have a five-year life and a

residual value of $6,000. Using the sum-of-the-years'-digits method, depreciation for 2011 and book value at December 31, 2011 would be: $22,000 and $44,000. $22,000 and $50,000. $24,000 and $48,000. $24,000 and $42,000.
Business
1 answer:
lapo4ka [179]3 years ago
8 0

Answer:

$22000 and $50000.

Explanation:

Given: Purchased value of equipment- $72000.

           Residual value- $6000

           Estimated useful life of equipment- $ 5 years.

Now, finding value of depreciation for 2011 using the sum of the years digits method.

Depreciation cost= (\textrm{Purchased value - residual value}

⇒ Depreciation cost= (72000-6000)= \$ 66000

∴ Depreciation cost= $66000.

     

Depreciation fraction for 1st year= \frac{5}{1+2+3+4+5} = \frac{5}{15}

Depreciation expense for 1st year= \frac{5}{15} \times 66000= \$ 22000

∴ Depreciation for 2011 is $22000.

Next, lets find out the book value at the end of  first year.

Book value= (\textrm{Purchased value - depreciation expense})

Book value= (72000 - 22000) = \$ 50000

∴ Book value at December 2011 is $50000.      

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<h3>What is competitive advantage?</h3>

A firm seeks a competitive advantage when it aims to surpass its rivals in terms of profitability. An organization must be able to communicate to its chosen target market that it has a higher comparative or differential value than its rivals in order to establish and retain a competitive advantage. For instance, a business is likely to have a competitive advantage if it advertises a product at a lower price than a similar product from a rival. The same holds true if the marketed item is more expensive but has special characteristics that buyers are ready to pay for.

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1 year ago
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A deferred annuity is one of the type of contract where they pay some amount of their profit to the owner on the regular basis and it also used by various types of investors for profit purpose.

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Your brother announces at Thanksgiving Dinner that he is thinking of becoming a day trader. What questions might you ask him to
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Need not make any special disclosure

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