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umka21 [38]
3 years ago
5

When an accelerated depreciation method is used to calculate depreciation expense: Multiple Choice the accumulated depreciation

account balance will increase by a larger amount in the last half of an asset's life than if straight-line depreciation is used. the net book value of the asset halfway through its useful life will be less than if straight-line depreciation is used. the net book value of the asset at the end of its useful life will be less than if straight-line depreciation is used. depreciation expense will be less in the early years of the asset's life than if straight-line depreciation is used.
Business
1 answer:
erastovalidia [21]3 years ago
4 0

Answer:

the net book value of the asset halfway through its useful life will be less than if straight-line depreciation is used.

Explanation:

Let me use an example to illustrate this.

An asset has a useful life of 4 years. It costs $1000. It has a salvage value of 0

If the straight line depreciation method is used , the depreciation expense every year = $1000/ 4 = $250

The net book value halfway through its useful life = $1000 - ($250 x 2) = $500

If double declining method is used, the depreciation expense in the first year would be = 2/4 x $1000 = $500

The net book value at the beginning of year 2 = $1000 - $500 = $500

Depreciation expense in year 2 = 2/4 x $500 = $250

The net book value at the beginning of year 3 = $500 - $250 = $250

We can see that the net book value halfway through the useful is lower when double declining depreciation method is used

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Pink Arrangements has just completed operations for the year ended December 31, 2018. This is the third year of operations for t
Kruka [31]

Answer:

$21,000

Explanation:

Preparation of income statement

Income statement of Pink Arrangements for the year ended December 31, 2018.

REVENUE:

Service Revenue 84,000

Less EXPENSE:

Insurance Expense (2,500)

Utilities Expense (1,500)

Rent Expense (12,000)

Salaries Expense (47,000)

NET INCOME 21,000

Therefore the Income statement of Pink Arrangements for the year ended December 31, 2018 will be shows the amount of $21,000

4 0
3 years ago
Soda is the largest bottler of Soda in Western Europe. The company purchases Brand 1 and Brand 2 concentrate from The Soda Compa
Dmitry [639]

Answer and explanation:

<em>check the attached file for a well formatted answer</em>

The purchase budget for the month of Mar 2012 is asked. Also there are no changes in beginning and closing inventories. The data given is summarised as below,

Brand 1 Brand 2

Bottle size 2 lit 2 lit

Number of bottles 106000 81000

Concentrate cost $85 per pound

Concentrate used 0.15 lb per 100 lit 0.2 lb per 100 lit

Carbonated water used 2 lit 2 lit

Bottle cost $0.1 per bottle

Carbonated water cost $0.08 per litre

Based on this the budget is filled as below,

CONCENTRATE 2-LITRE BOTTLES CARBONATED WATER

Brand 1 (A)  

318 lbs

[=106000*2/100*0.15 lbs]

106000 bottles  

212000 litres

[106000 bottles * 2 litres]

Brand 2 (B)  

324 lbs

[=81000*2/100*0.2 lbs]

81000 bottles  

162000

[81000 bottles * 2 litres]

Total Materials (C=A+B) 642 lbs 187000 bottles 374000 litres

Direct materials unit price (D) $ 85 $ 0.1 $ 0.08

Total direct materials to be purchased (E=C*D) $54570 $18700 $29920

7 0
3 years ago
Holly's is currently an all-equity firm that has 12,000 shares of stock outstanding at a market price of $36 a share. The firm h
vagabundo [1.1K]

Answer:

$31,104

Explanation:

EBIT / 12,000

= [EBIT - ($120,000 × .072)] / [12,000 - ($120,000 / $36)]

EBIT = $31,104

Therefore the minimum level of earnings before interest and taxes that the firm is expecting will be $31,104

8 0
3 years ago
Exodus Limousine Company has $1,000 par value bonds outstanding at 15 percent interest. The bonds will mature in 30 years. Compu
nasty-shy [4]

Answer:

if YTM at 4% price :  $2,902.1237

if YTM at 8% price :  $1,788.0448

The bonds are above face value asthey offer a higher coupon payment than the market yield therefore the bond holders are willing to pay above theri face value

Explanation:

the market price of the bond will be the present value of coupo payment and maturity:

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.04

150 \times \frac{1-(1+0.04)^{-30} }{0.04} = PV\\

PV $2,593.8050

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.04

\frac{1000}{(1 + 0.04)^{30} } = PV  

PV   308.32

PV c $2,593.8050

PV m  $308.3187

Total $2,902.1237

No we repeat the process with the yield at 8%

C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C 150.000

time 30

rate 0.08

150 \times \frac{1-(1+0.08)^{-30} }{0.08} = PV\\

PV $1,688.6675

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   1,000.00

time   30.00

rate  0.08

\frac{1000}{(1 + 0.08)^{30} } = PV  

PV   99.38

PV c $1,688.6675

PV m  $99.3773

Total $1,788.0448

7 0
3 years ago
Alternative A would involve substantial fixed but relatively low variable costs: fixed costs would be $250,000 per year, and var
stepladder [879]

Answer:

From zero to 33 boats option B would be best

Explanation:

Assuming the first alternative (A)is 250,000 fixed and 500 per boat

second (B) 2,500 cost per boat

and third (C) 50,000 fixed and 1,000 cost per boat

We want' to know at which level B would be the best option

we want to know when alternative C or A have a cost of 2,500 or lower:

A:

500 + \frac{250,000}{Q} = 2,500

\frac{250,000}{2,500 - 500} = Q

Q = 125

From this point, as fixed cost will be distribute among more units, the cost will decrease meaking C better than B

C:

1,000 + \frac{50,000}{Q} = 2,500

\frac{50,000}{2,500 - 1,000} = Q

Q = 33.33

From this point, as fixed cost will be distribute among more units, the cost will decrease meaking A better than B

From zero to 33 boats option B would be the best of the three options

6 0
3 years ago
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