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jolli1 [7]
3 years ago
7

You would like to have $50,000 saved at the end of Year 5. At the end of Year 2, you can deposit $7,500 for this purpose. If you

earn 4.5 percent, how much must you deposit today to reach your goal assuming no other deposits are made
Business
1 answer:
Helen [10]3 years ago
5 0

Answer:

The amount that should be deposited today is $33254.58

Explanation:

The deposit should be such that the future value of the deposit made today and at the end of year 2 should be equal to $50000 after 5 years. Let the deposit made today be x. The equation for the future value will be,

50000 = x * (1+0.045)^5  +  7500 * (1+0.045)^3

50000 = x *  (1.045)^5  +  8558.745938

50000 - 8558.745938  =  x * (1.045)^5

41441.25406 / (1.045)^5  =  x

x = $33254.57769 rounded off to $33254.58

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Pronghorn Company purchased equipment for $251,930 on October 1, 2017. It is estimated that the equipment will have a useful lif
GenaCL600 [577]

Answer:

Pronghorn Company

Depreciation Expense under Production Hours & Production Units:

c) Production Unit:

Depreciation Rate =Depreciable amount/Production hours

= $5.90 per unit

for 1,100 units, Depreciation expense = 1,100 x  $5,90 = $6,490

b) Production hours:

Depreciation Rate = Depreciable amount/Production hours

= $237,770/20,100 = $11.83 per hour

For 530 hours, depreciation expense = 530 x $11.83 = $6,270

Explanation:

1. Data:

Pronghorn Company:

October 1, 2017

Purchase of Equipment for $251,930

Salvage value                            14,160

Depreciable amount           $237,770

2. Depreciation Expenses based on production hours and hours are some of the methods to depreciate an equipment used for production.  Using these methods, the depreciation rate is determined and then multiplied by usage (hours or units) to obtain the depreciation expense for the period.  The methods are simple and logical for depreciating production equipment.

8 0
3 years ago
Testing conclusions review the typical benefits of physical capital described in section 1. give specific examples of how the fi
Ronch [10]
- he invention of railroads will reduce the amount of time and capital compared to having to buy supplies to feed horses and drivers in delivering goods.
- The trains also allow companies to deliver products on larger amount compared to using carriage
- Delivering with trains will decrease the likelihood of agricultural products in becoming rotten and unsellable.
3 0
3 years ago
During 2016, Ayayai Corporation spent $144,000 in research and development costs. As a result, a new product called the New Age
tatyana61 [14]

Answer:

Please see below the journal entries of Ayayai Corporation for the year ending 2016 and 2017 respectively.

Explanation:

Ayayai Corporation

Journal Entries

For the Year ending 2016

Debit: Research & Development Expense $144,000

Credit: Cash $144,000

To record research and development expense.

Debit: Patent $17,400

Credit: Cash $17,400

To record legal cost relating to Patent.

Debit: Amortization Expense $435

Credit: Patent $435

To record amortization expense for the pro rated year.

Ayayai Corporation

Journal Entries

For the Year ending 2017

Debit: Amortization Expense $1,740

Credit: Patent $1,740

To record amortization expense for year.

<em>AMORTIZATION EXPENSE CALCULATION:</em>

Legal Cost = $17,400

Useful Life = 10 Years

Amortization Expense = Legal Cost / Useful Life

Amortization Expense = $17,400 / 10

Amortization Expense = $1,740 per year

But since in 2016 the patent was obtained on October 1, so Ayayai Corporation will have to pro rate the Amortization Expense in 2016 as below:

Amortization Expense = Annual Amortization Expense x No. of months / Total no. of months

Since patent was obtained in October so the No. of months is '3'

Amortization Expense = $1,740 x 3 / 12

Amortization Expense = $435

5 0
3 years ago
Read 2 more answers
What is the biggest difference in who makes the contributions to 401(k) and IRA retirement plans?
allsm [11]
In a 401k the employer usually matches a percentage and if you are lucky dollar for dollar, where in an IRA it is does an an extra option with a set amount of money usually 2500 or more for each IRA contribution.
5 0
3 years ago
Carla is preparing a speech. How will creating an outline most help her speech?
lisov135 [29]
It will help organize the flow of ideas
5 0
3 years ago
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