Answer:
Explanation:
Because land never depreciates, Western Bank & Trust wanted to distribute a higher percentage of the purchase price to the building, rather than the land. By allocating 90% of the purchase price to the building, rather than a more accurate 70%, Western Bank & Trust increases the depreciation amount of the building each year. For tax purposes, the IRS requires that the Modified Accelerated Cost Recovery System (MACRS) be used as the depreciation method used by companies. Under this method, the IRS specifies the useful life for a specific asset. MACRS also ignores residual value of an asset at the end of its useful life. By stating that the building was worth 90% of the total purchase price, Western Bank is attempting to increase its tax deduction from the IRS, because only the building depreciates, not the land. This improper allocation of the total purchase amount violates GAAP principles, which require that accounting information be “relevant and have faithful representation.” The information must be “complete, neutral, and free from error” (Nobles, Mattison, & Matsumura, 2014). For Western Bank to provide complete, neutral, and free from error information, it should record the transaction honestly: 70% to the building, 30% to the land. This dishonest representation is harmful to the federal government in that it is allowing Western Bank to take more money than what it is owed. If these kinds of situations happen on a large scale, it could have a huge impact on the economy in general. Source: Nobles, T., Mattison, B., & Matsumura, E. M. (2014). Horngren's Accounting, 10th Edition. Pearson Education, Inc. Student 2
Answer:
C. 20.00 percent
Explanation:
The computation of the accounting rate of return is shown below:
The formula to compute the accounting rate of return is shown below:
= Annual net income ÷ initial investment
where,
Annual net income is
= Net cash flows - depreciation expense
= $12,000 - $6,000
= $6,000
And, the initial investment is $30,000
So, the accounting rate of return on initial investment is
= $6,000 ÷ $30,000
= 20%
The depreciation expense is
= $30,000 ÷ 5 years
= $6,000
Answer:
b. variable life
Explanation:
Variable life insurance pays a premium in case the insured dies (that is a guaranteed benefit), but it also allows the beneficiary to invest a portion of the proceeds in different types of investments. These investments may include stocks, mutual funds, bonds, etc., that eventually grow and increase in value.
No, Walmart won't be able to offer such low prices if they were a different type organization
Walmart might soon follow in the footsteps of Borders booksellers, Sam Goody's record stores, and other once-dominant retailers whose market share shrank and finally collapsed as online sales got steadily larger if it didn't keep its pricing low enough to compete with e-commerce behemoths like Amazon.
Walmart has kept operating costs down since its inception in the early 1960s by heeding the advice of its late founder and namesake Sam Walton. Even after becoming a multi-millionaire, Walton is infamous for still using an old pickup vehicle for transportation. by using low-cost travel choices for executives and by maintaining a simple in-store design.
To learn more about Walmart refer to:
brainly.com/question/16607243
#SPJ4
