Answer:
Depreciation Expense for December 31, 2016 = $12000
Explanation:
1st normal Depreciation in order get book value on January 1st, 2016
Depreciation Expense = (Cost - Salvage value ) / Estimated useful life
Depreciation Expense = ($60000-$24000) / 6
Depreciation Expense = $6000
As it straight line method depreciation will remain same So value of Truck will reduce by $12000. Hence, book value of Truck will be ($60000 - $12000) = $48000
Now get new book value by adding current book value of Truck and repairs on truck. ($48000 + $20000) = $68000 and new salvage value is $8000.
New Depreciation expense:
Depreciation Expense = (Cost - Salvage value ) / Estimated useful life
Depreciation Expense = ($68000-$8000) / 5
Depreciation Expense = $12000
Answer:
manufacturing organization
Explanation:
This is an example of a manufacturing organization. This is an organization that focuses on gathering all of the necessary ingredients, which are then placed in a specific process to which combines them to make a unique product. This product is then sold to other companies or individual customers to generate profit for the company. This is exactly what Black Diamond does in order to produce outdoor equipment.
Answer:
Price $17
PE ratio 8.5 times
Explanation:
As per given data
ROE = 20%,
Plowback ratio = b= 0.03,
EPS = $2,
k= 12%
As plowback referr to the retentrion value, deducting its effect from EPS
Dividend= EPS × ( 1 − b ) = $2 × ( 1 −0.03 )= $1.94
Growth = ROE x b = 20% x 0.03 = 0.006 = 0.6%
Using Dividendvaluation method we will calculate the price.
Price = Dividend / (Rate of return - Growth rate )
Price = $1.94 / ( 12% - 0.6% ) = $17
P / E Ratio = Price / EPS = $17 / $2 = 8.5