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4 years ago

9

Costs of Acquiring Fixed Assets

2 answers:

Zepler [3.9K]4 years ago

8 0

Answer:

The answer is given below:

Explanation:

a.

1.Yes

2.Yes

3.Yes

4.Yes

5.Yes

6. Yes

b.

7.No

8.Yes

9.Yes

10.No

11.No

12.No

As a rule of thumb,those costs which increase the value or useful life of asset should be capitalized where as those costs that are incurred to maintain the usage of asset are revenue expenditure and should be charged to income statement not the asset.

Olegator [25]4 years ago

7 0

Answer:

Yes

Yes

Yes

No

Yes

Yes

Yes

Yes

Yes

No

Yes

No

Explanation:

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One reason to buy a home instead of rent a home is: A Homes have the potential to appreciate in value over time. B Homes have fe

Aleks04 [339]

A. because you can live their without paying rent and its nice to live in a house that you buy.

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4 years ago

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3 years ago

You are considering investment that is going to pay $1,500 a month starting 20 years from today for 15 years. If you can earn 8

Margarita [4]

Answer:

<u><em>$31,858.57</em></u>

Explanation:

1. First calculate the value of a constant annuity of $1,500 for 15 years at the 8% return.

The formula is:

$PV=C[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}]$

Where:

PV is the present value of the annuity

C is the constant pay,emt: $1,500

r is the rate of return: 8%/12 = 0.08/12 =

t is the number of periods: 15 years × 12 moths/year = 180

Substitute and compute:

$PV=\$ 1,500[\dfrac{1}{(0.08/12)}-\dfrac{1}{(0.08/12)(1+0.08/12)^{180}}]$

$PV=\$ 156,960.89$

<u>2. Discount to the present year.</u>

You calculate the value of the annuity 20 years from now.

Then, you must discount that value at the same 8% rate to have the price today.

$Price=(Value\text{ }in\text{ }20\text{ }years)/(1+r)^t$

Here, the value in 20 years is $156,960.89, r = 0.08/12, and t = 240 (20 × 12).

$Price=\$ 156,960.89/(1+0.08/12)^{240}=\$ 31,858.57$

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3 years ago

Novak Company is constructing a building. Construction began on February 1 and was completed on December 31. Expenditures were $

Temka [501]

Answer: $2,940,000

Explanation: Weighted Average Accumulated Expenditure is the product of the amount incurred multiplied by the no of months its being capitalised.

on March 1st $ 2,520,000 was incurred = 10/12*2,520,000=2,100,000

on 1st June $1,680,000 was incurred = 6/12*1,680,000= 840,000

on 31st December $4,200,000 was incurred = 0/12*4,200,000=0

Total Weighted Average Accumulated Expenditures = 2,100,000+840,000

= $2,940,000

6 0

4 years ago

Read 2 more answers

Matthew Liotine's Dream Store sells water beds and assorted supplies. His best-selling bed has an annual demand of 395 units.

Sergeu [11.5K]

Answer:

77.48 units

Explanation:

Data provided in the questions

Annual demand = 395 units

Ordering cost = $38

Holding cost per unit per year = $5

The computation of the economic order quantity is shown below:

$= \sqrt{\frac{2\times \text{Annual demand}\times \text{Ordering cost}}{\text{Carrying cost}}}$

$= \sqrt{\frac{2\times \text{395}\times \text{\$38}}{\text{\$5}}}$

= 77.48 units

hence, the economic order quantity is 77.48 units

We simply applied the above formula so that approximate units could come. And it always expressed in units

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3 years ago