Answer:
The old machine should be replaced.
Explanation:
Note: See the attached excel file for the the analysis showing whether the old machine should be retained or replaced.
From the attached excel file, the following calculation are made:
Variable Manufacturing cost of Retain = Initial Variable Manufacturing cost * remaining useful life of old machine = $592,600 * 5 = $2,963,000
Variable Manufacturing cost of Replace = New Variable Manufacturing cost * Remaining useful life of new machine = $505,500 * 5 = $2,527,500
From the attached excel, it can be observed that the total cost of Retain is $32,200 higher than the total cost of Replace. This therefore implies that the old machine should be replaced.
Answer:
b) technological advancements
Explanation:
Manufacturing automation and office automation are examples of technological advancements that are forces for change outside the....
Automation of manufacturing and office entails the use of technology in place of traditional means. Advancement in technology has made enterprises shift from traditional means of production to technology, which enhances efficiency and improves productivity.
Answer:
The correct answer is 'Option (b)
Explanation:
Cole co. should compare between actual interest incurred on all the debts and the calculated interest on weighted average accumulated expenditure and lower of these two should be capitalized.
Actual interest incurred =$50,000+20,000 = $70,000
Calculated interest = $40,000
Lower of these two to be capitalized for the building during 2011= $40,000
Answer:
1. The likelihood of a payment occurring is probable, and the estimated amount is $1.14 million.
- Dr Law suit loss 1,140,000
- Cr Law suit liability 1,140,000
2. The likelihood of a payment occurring is probable, and the amount is estimated to be in the range of $0.94 to $1.14 million.
- Dr Law suit loss 940,000
- Cr Law suit liability 940,000
US GAAP allows companies to record probable losses at lowest estimated value.
3. The likelihood of a payment occurring is reasonably possible, and the estimated amount is $1.14 million.
- no journal entry is required, only a disclosure in the footnotes of the financial statements.
A contingent liability (or loss) that is only possible, but not probable, does not need to be journalized and recorded. It only needs to be disclosed in the footnotes of the financial statements.
4. The likelihood of a payment occurring is remote, while the estimated potential amount is $1.14 million.
- no journal entry is required
A contingent liability (or loss) that is remote, does not need to be journalized or recorded, nor included in the footnotes of the financial statements.
Answer:
Option D) The company’s depreciation expense declined.
Explanation:
It happens because when company´s depreciation decrease you have less cost of sales and an improvement in the Gross Margin and hence in the Net Income, but this enhancement in the Net Income has an opposite effect on Net Cash because less depreciation means less total cash,
Total Cash it's defined by Net Income plus Depreciation, a less Depreciation means less Net Cash.
