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Marina CMI [18]

3 years ago

9

On January 1, 2021, the Allegheny Corporation purchased equipment for $115,000. The estimated service life of the equipment is 1

0 years and the estimated residual value is $5,000. The equipment is expected to produce 220,000 units during its life. Required: Calculate depreciation for 2021 and 2022 using each of the following methods.Assume instead the equipment was purchased on October 1, 2021. Calculate depreciation for 2021 and 2022 using each of the two methods. Partial-year depreciation is calculated based on the number of months the:

1 answer:

Rasek [7]3 years ago

4 0

Solution:

Straight-Line Depreciation

Choose Numerator: / Choose Denominator = Annual Depreciation Expense

Cost minus Salvage / Estimated Useful Life (years) = Depreciation Expense

$110,000 / 10 = $11,000

Depreciation Expense

2016 $11,000

2017 $11,000

Sum-of-the-years' digits depreciation

Depreciable Base x Rate per Year = Depreciation Expense

2016 $110,000 x 10/55 = $20,000

2017 $110,000 x 9/55 = $18,000

Depreciation for the Period End of Period

Annual Period Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value

2016 $115,000 20% $23,000 $23,000 $92,000

2017 $92,000 20% $18,400 $41,400 $73,600

Depreciation for the Period End of Period

Annual Period Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value

2016 $115,000 15% $17,250 $17,250 $97,750

2017 $97,750 15% $14,663 $31,913 $83,087

Select formula for Units of Production Depreciation:

(Cost - Salvage) / Total units of production

Calculate 2016 depreciation expense:

Depreciation per unit rate $0.50

Units produced in 2016 30,000

Depreciation in 2016 $15,000

Calculate 2017 depreciation expense:

Depreciation per unit rate $0.50

Units produced in 2017 25,000

Depreciation in 2017 $12,500

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Answer:

See the answers and explanation below.

Explanation:

a. the necessary journal entries assuming a small (10%) stock dividend

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<u><em> To record a small (10%) stock dividend on common stock. .</em></u>

b. the necessary journal entries assuming a large (100%) stock dividend

<u>Date Details Dr ($) Cr ($)</u>

Sept. 1 Stock Dividends (16,000 * 7 * 100%) 112,000

Common Stock (16,000 * 7 *10%) 112,000

<u><em> To record a large (100%) stock dividend on common stock. .</em></u>

c. the necessary journal entries assuming a 2-for-1 stock split.

"No journal entry required"

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Kevin has $20 to spend on summer clothes. He is looking at shirts, shorts, and flip-flops. Shirts are $10, shorts are $15, and f

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Answer:

Kevin has analyzed the situation well. However, he should also consider the fact that he saved $10 by only purchasing the shirt.

Opportunity cost is the cost of the forgone alternative. Out of the 3 choices, he only purchased 1 of the choices, the opportunity cost are the other two choices. However, he is still capable of buying the flip-flops costing $10 but he chose not to do so. He should consider it as a savings aside from it being a lost opportunity.

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Which of the following entries would be made to record $20,800 of labor-80% of which is direct, and 20% of which is indirect-to

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Answer:

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Entry: DEBIT CREDIT

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Tariffs create a(n) ___________ pressure on domestic prices.

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Answer: A. upward

Explanation:

Tariffs are taxes that a Government imposes on imported goods in a bid to protect local producers that are making the same goods.

When a Tariff is implemented, it will make goods from outside more expensive as well as give domestic producers an opportunity to charge higher prices as imports have become more expensive.

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3 years ago

A mail-order house uses 18,000 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The followi

LuckyWell [14K]

Answer:

Explanation:

Given that:

A mail-order house uses 18,000 boxes a year.

Carrying costs are 60 cents per box a year =$0.60

and ordering costs are $96.

Determine:

A. The optimal order quantity.

The optimal order quantity can be calculated by using the formula:

$Q_o = \sqrt{\dfrac{2DS}{H}}$

$Q_o = \sqrt{\dfrac{2*18000*96}{0.60}}$

$Q_o = \sqrt{\dfrac{3456000}{0.60}}$

$Q_o = \sqrt{5760000}$

$Q_o = 2400 \ boxes$

B. The number of orders per year.

of boxes: 1,000-1,999 Price per box: $1.25

of boxes: 2,000- 4,999 Price per box: $1.20

of boxes: 5,000- 9,999 Price per box : $1.15

of boxes: 10,000 or more Price per box : $1.10

SInce 2400 boxes lies within ''of boxes: 2,000- 4,999 Price per box: $1.20 ''

Total cost = Carrying cost + ordering cost + Purchasing cost

$Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD$

$Total \ cost =(\dfrac{2400}{2} )0.60 +(\dfrac{18000}{2400}) 96+1.20*18000$

Total cost = ( 1200) 0.60 + 7.5(96) + 1.20(18000)

Total cost = 720 + 720 + 21600

Total cost = $ 23040

If the order size is 5000, the price per box will be 1.15

$Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD$

$Total \ cost =(\dfrac{5000}{2} )0.60 +(\dfrac{18000}{5000}) 96+1.15*18000$

Total cost = 2500 (0.60) + 3.6 (96) + 20700

Total cost = 1500 + 345.6 + 20700

Total cost = $22545.6

If the order size is 10000 , the price per box will be 1.10

$Total \ cost =(\dfrac{Q}{2} )H +(\dfrac{D}{Q}) S+PD$

$Total \ cost =(\dfrac{10000}{2} )0.60 +(\dfrac{18000}{10000}) 96+1.10*18000$

Total cost = 5000 (0.60) + 1.8(96) + 19800

Total cost = 3000 + 172.8 + 19800

Total cost = $22972.8

From the three total cost, the least minimum cost of ordering is: 5000

So; the number of orders per year = total number of boxes per year/ boxes per order

the number of orders per year = 18000/5000

the number of orders per year = 3.6 orders per year

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