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Stels [109]
3 years ago
8

Rossiter Restaurants is analyzing a project that requires $180,000 of fixed assets. When the project ends, those assets are expe

cted to have an aftertax salvage value of $45,000. How is the $45,000 salvage value handled when computing the net present value of the project?
Business
1 answer:
Korolek [52]3 years ago
4 0

Answer:

We consider the salvage value as an income at the last moment.

Explanation:

The salvage value is the money we can when we sell the fixed assets we use in project.  

When we compute the net present value ,  we consider the salvage value as an income in the last moment.  We have to consider the time of the project to bring it at the actual moment. If the rate of discount is different to 0,  the actual value of salvage value ,  will always be smaller that the $45,000

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Bluestone Company had three intangible assets at the end of the current year:
adoni [48]

Answer and Explanation:

The computation is shown below:

1) Calculation of the acquisition cost is

Patent = $4,000

Trademark = $210,000 + $8,500 = $218,500

Licensing Rights = $80,000

2) Computation the amortization expense is  

Patent = $4,000 ÷ 10 = $400

Trademark = $218,500 ÷ 10 = $21,850

Here we assume the indefinite life of 10 years  

Licensing Rights = $80,000 ÷ 5 = $16,000

3)

Income statement:

Amortization expense  $38,250 ($400 + $21,850 + $16,000)

Balance sheet at year end december:

Fixed assets

Intangibles

Patent         $3600 ($4,000 - $400)

Trademark  $196,650 ($218,500 - $21,850)

Licensing Rights  $64,000 ($80,000 - $64,000)

8 0
2 years ago
Mary-Jo owns a theater. She purchased a new computer to run the accounting software and lighting for the theater. The computer c
Ratling [72]

Answer:

The depreciation for 2020 is $233.33

Explanation:

Under the MACRS, computer useful life is 5 years.

The depreciation rate for every year, applying double declining method is: 100% / 5 = 20%. So, depreciation expenses for first year of the computer is calculated as: Cost of the computer x 20% = = 2,000 x 20% = $400.

As the computer is purchased in May, the year 2020 would only account for 7 month out of the first year of depreciation. Thus 2020 depreciation expenses = First year depreciation x 7/12 = 400 x 7/12 = $233.33

8 0
3 years ago
Which one of the following will produce the highest present value interest factor? A. 6 percent interest for five years B. 6 per
disa [49]

Answer:

The correct answer is A

Explanation:

The formula to compute the present value interest factor using excel is as:

= 1/(1+r)^ n

where

r is the rate

n is number of years

So, in case of A,

The present value interest factor is:

= 1/(1+0.06)^5

= 0.74725

In case of B,

The present value interest factor is:

= 1/(1+0.06)^8

= 0.62741

In case of C,

The present value interest factor is:

= 1/(1+0.06)^10

= 0.55839

In case of D,

The present value interest factor is:

= 1/(1+0.08)^5

= 0.68058

In case of E,

The present value interest factor is:

= 1/(1+0.08)^10

= 0.46319

Therefore, it is highest in option A.

3 0
3 years ago
Lorraine works for a company that does not pay very well. She relies heavily on extra paychecks that her company gives out a cou
Nataliya [291]

Answer: Bonus pay plan of individual-level performance-based pay

Explanation:

In this scenario, an extrinsic reward used here is the bonus pay plan. An extrinsic reward simply means a reward that is being given to the employee of a particular company after a particular thing has been achieved.

Here, a bonus pay plan of individual-level performance-based pay is being used. A bonus is given to the employee for meeting a particular requirements. Bonus are calculated base on either the percentage of ones wages or salaries or by using a flat rate.

3 0
3 years ago
On January 1, 2018, Brussels Enterprises issues bonds at par dated January 1, 2018, that have a $3,400,000 par value, mature in
pashok25 [27]

Answer:

a. Record the entry for the issuance of bonds for cash on January 1, 2018.

January 1, 2018, bonds are issued

Dr Cash 3,400,000

    Cr Bonds payable 3,400,000

b. Record the entry for the first semiannual interest payment on June 30, 2018.

June 30, 2018, first coupon payment

Dr Interest expense 153,000

    Cr Cash 153,000

c. Record the entry for the second semiannual interest payment on December 31, 2018.

December 31, 2018, second coupon payment

Dr Interest expense 153,000

    Cr Cash 153,000

d. Record the entry for the maturity of the bonds on December 31, 2021 (assume semiannual interest is already recorded).

December 31, 2021, payment of bonds payable

Dr Bonds payable 3,400,000

    Cr Cash 3,400,000

6 0
2 years ago
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