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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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8 0
3 years ago
Assume a project has normal cash flows. according to the accept/reject rules, the project should be accepted if the?
True [87]

Assume a project has normal cash flows. According to the accept/reject rules, the project should be accepted if the: IRR exceeds the required return.

Internal rate of return (IRR) is a metric used in financial analysis to estimate the potential profitability of an investment. The IRR is the discount rate that drives the net present value (NPV) of all cash flows to zero in discounted cash flow analysts. This suggests that an expected angel investment IRR of at least 22% is considered a good IRR. The higher

the project's projected IRR and the higher the amount above its cost of capital, the more net cash the project brings to the firm. So in this case the project appears to be profitable and management should go ahead with it.

Learn more about IRR  here

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6 0
2 years ago
Identify the reasons why the quantity demanded of a product increases as the price of that product decreases. a. as the price de
Brut [27]

Answer:

D) A and B

Explanation:

a. as the price declines, the real income of the consumer increases

b. as the price of product A declines, it makes it more attractive than product B

Hope this helps!

Ps. Don't click on those sketchy links.

Have a good day!

4 0
2 years ago
A(n) _________ occurs when one company buys the property and obligations of another company.
SVETLANKA909090 [29]
The answer would be C
8 0
3 years ago
June 1 Beginning inventory 20 units at $19 $ 380 June 7 Purchases 70 units at $20 1,400 June 22 Purchases 10 units at $23 230 $2
Vadim26 [7]

Answer:

Option (d) is correct.

Explanation:

Given that,

June 1 Beginning inventory 20 units at $19 = $ 380

June 7 Purchases 70 units at $20 = 1,400

June 22 Purchases 10 units at $23 = $230

Cost of goods available for sale = $2,010

On June 30, units on hand = 30 units

Cost of Ending inventory:

= (20 units × $20) + (10 units × $23)

= $400 + $230

= $630

Total cost of goods sold:

= Cost of goods available for sale - Cost of Ending inventory

= $2,010 - $630

= $1,380

6 0
2 years ago
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