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Akimi4 [234]
3 years ago
7

The Baldwin Company has just purchased $40,900,000 of plant and equipment that has an estimated useful life of 15 years. The exp

ected salvage value at the end of 15 years is $4,090,000. What will the accumulated depreciation expense for this purchase (exclude all other plant and equipment) be after its second year of use? a. $2,454,000 b. $4,908,000 c. $2,726,667 d. $5,453,333
Business
1 answer:
Svet_ta [14]3 years ago
7 0

Answer:

b. $4,908,000

Explanation:

According to the FASB GAAP, the straight line method is used in this given question which is shown below:

= (Original cost - residual value) ÷ (useful life)

= ($40,900,000 - $4,090,000) ÷ (15 years)

= ($36,810,000) ÷ (15 years)  

= $2,454,000

In this method, the depreciation is same for all the remaining useful life

For two years, the accumulated depreciation would be

= Annual year depreciation × number of years

= $2,454,000 × 2 years

= $4,908,000

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7 0
3 years ago
A process cost system would be appropriate for a a.jet airplane builder b.custom cabinet builder c.catering business d.natural g
lozanna [386]

Answer:

D. Natural gas refinery

Explanation:

Processing cost system is when identically units are mass produced. It involves assigning materials, factory labour, overhead cost and so on in an effort to value finished goods inventory. Process cost involves allocation of cost for different set in each process. It helps in determining total cost of producing a unit of commodity. It is best suited for the natural gas refinery because of the various steps involved in the processing and manufacturing of products as cost can be identified and allocated for each steps and also because what is produced are identical units which are mass produced.

3 0
3 years ago
Select the correct answer.
Vaselesa [24]

Answer:

D that's the correct trust me

7 0
2 years ago
To identify patterns across transactions, we can use _____.
antiseptic1488 [7]
The anser is d- k-means
8 0
2 years ago
Baron Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. It
astraxan [27]

Answer:

WACC is 7.24%

After tax cost of debt is 3.95%

Explanation:

WACC=Ke*E/V+Kd*D/V*(1-t)+Kp*P/V

Ke is the cost of equity of 9% or 0.09

Kd  is the cost of debt at 5% or 0.05

Kp is the of preferred stock of 4% or 0.04

E is the weight of equity of 65% 0r 0.65

D is the weight of debt of 25% 0.25

K is the weight of preferred stock of 10% or 0.10

t is the tax rate of 21% or 0.21

WACC=(0.09*0.65)+(0.05*0.25*1-0.21)+(0.04*0.10)

WACC=(0.09*0.65)+(0.05*0.25*0.79)+(0.04*0.10)

WACC=7.24%

after tax cost of debt=pretax cost of debt*(1-t)

                                  =0.05*(1-0.21)

                                 =0.0395=3.95%

5 0
3 years ago
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