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Mazyrski [523]
2 years ago
15

Mullen Company purchased a new machine costing $55,200 on January 1, 2017. The machine is expected to have a $3,600 salvage valu

e at the end of its useful life of six years. What is the depreciation expense that Mullen Company records for 2017 using the double-declining-balance method?
Business
1 answer:
hammer [34]2 years ago
7 0

Answer:

depreciation expense for 2017

Explanation:

Double Declining    

Year  Beginning Dep-Expense   Acc. \: Dep           Ending

                                                                                        $55,200.00

1   $55,200.00   $18,400.00    $18,400.00           $36,800.00

2   $36,800.00   $12,266.67   $30,666.67           $24,533.33

3   $24,533.33   $8,177.78   $38,844.45           $16,355.55

4   $16,355.55   $5,451.85   $44,296.30           $10,903.70

5   $10,903.70   $3,634.57   $47,930.87           $7,269.13

6   $7,269.13   $3,669.13   $51,600.00           $3,600.00

The DD rate is done by appling:

straight line rate x 2

(1/6) x 2 = 2/6 = 1/3

to net book value.

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On January 1, 2022, Skysong, Inc. purchased equipment for $44280. The company is depreciating the equipment at the rate of $620
Svetllana [295]

On December 31, 2022, the book value of the equipment comes out to be $36,840 with monthly depreciation of $620.

Option D is the correct answer.

<h3>What is meant by depreciation?</h3>

Depreciation is a method that applies to tangible fixed assets where the fall in the value of an asset has been recorded.

Given values:

The purchase cost of equipment: $44,280

Monthly depreciation: $620

<u>Step-1</u> Computation of annual depreciation charges:

\rm\ Annual \rm\ depreciation=\rm\ Monthly \rm\ depreciation \times \rm\ Number \rm\ of \rm\ months \rm\ in  \rm\ a \rm\ year\\\rm\ Annual \rm\ depreciation=\$620 \times\ 12\\\rm\ Annual \rm\ depreciation=\$7,440

<u>Step-2</u> Computation of book value of the equipment at the year-end:

\rm\ Equipment's \rm\ Book \rm\ value=\rm\ Purchase \rm\ Cost \rm\ of \rm\ Equipment-\rm\ Annual \rm\ Depreciation \\\rm\ Equipment's \rm\ Book \rm\ value=\$44,280-\$7,440\\\rm\ Equipment's \rm\ Book \rm\ value=\$36,840

Therefore, when the company purchases equipment at $44,280 with annual depreciation is $7,440, then the equipment's book value comes out to be $36,840 at the year-end.

Learn more about the depreciation in the related link:

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3 0
2 years ago
The Reading Co. has adopted a policy of increasing the annual dividend on its common stock at a constant rate of 3 percent annua
kicyunya [14]

Answer:

$1.07

Explanation:

In this question ,we use the formula which is shown below:

A = P × (1 + r ÷ 100)^n

where,

P = Present value $0.90

A = Future value

rate =3%

number of years = 6

Now put these values to the above formula

So, the value would be equal to

= $0.90 × (1 + 3%)^6

= $0.90 × 1.03^6

= $0.90 + 1.194052

= $1.07

We considered all the items so that the correct dividend can come

7 0
2 years ago
Hodor borrowed $1000. The bank charges him 5% interest per year. At the end of year, he paid $50 in interest. There was 2% incre
dem82 [27]

Answer:

5%

Explanation:

nominal interest rate = 5%

real interest rate = nominal interest rate -  increase in GDP deflator (inflation rate) = 5% - 2% = 3%

The nominal interest rate is the interest rate earned or charged without considering the effects of inflation. The real interest rate adjusts the nominal interest rate against the year's inflation rate.

5 0
3 years ago
Q 6.41: Which of the following companies is most likely to have lost sales due to an inventory shortage? Company 1 has an invent
V125BC [204]

Answer:

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Explanation:

Inventory turnover is the ratio that how many time a business has sold or replaced the inventory during a given period. A business is considered more profitable if it has high inventory turnover.

Company with highest Inventory turnover may lost sales due to inventory shortage.  Company 1 1 has the highest inventory turnover of 46.3. Which may lead to to the shortage of stock because the inventory in stock is more likely to sold earlier than other companies. High inventory turnover will lead to low inventory days.

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In an emergency situation the driver should always contact the dispatcher? True or false
Goryan [66]

Most definitely True

7 0
3 years ago
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