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LenKa [72]
3 years ago
7

Flint Systems is considering investing in​ production-management software that costs​ $630,000, has​ $67,000 residual​ value, an

d leads to cost savings of​ $1,650,000 per year over its​ five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return.
Business
1 answer:
gizmo_the_mogwai [7]3 years ago
5 0

Answer:

The average amount invested in the asset that should be used for calculating the accounting rate of return is $348,500

Explanation:

For computing the average amount invested in the assets, following equation should be used which is shown below:

= (Production management cost + Residual value) ÷ 2

= ($630,000 + $67,000) ÷ 2

= $697,000 ÷ 2

= $348,500

In this the question has asked to compute the average so the amount should be divided by 2.

The cost saving should be irrelevant in the computation part because this is used in computing accounting rate of return. Thus, it is not been considered.

Hence, the the average amount invested in the asset that should be used for calculating the accounting rate of return is $348,500

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2 years ago
Your company, Beta Corporation, is considering a new project which you must analyze. Based on the following data, what is the pr
Likurg_2 [28]

Answer:

Net operating cash flow= $9,300

Explanation:

Giving the following information:

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Depreciation $8,000

Other operating costs $12,000

Tax rate 35%

We need to determine the net operating cash flow:

Sales= 22,000

Other operating costs= (12,000)

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EBIT= 2,000

Tax= (2,000*0.35)=  (700)

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3 years ago
A corporation issued 5,000 shares of $20 par value common stock for $120,000 cash. A corporation issued 2,500 shares of no-par c
lapo4ka [179]

Answer:

Journal Entries Transaction

1.

Dr. Cash                                                                    $120,000

Cr. Common stock                                                   $100,000

Cr. Paid-in capital excess of par, Common stock  $20,000

2.

Dr. Company expenses                                                        $22,000

Cr. Common stock, $1 stated value                                     $2,500

Cr. Paid-in-capital excess of stated value common stock $19,500

3.

Dr. Company expenses                 $22,000

Cr. Common stock, no-par value  $22,000

4.

Dr. Cash                                                                   $53,250

Cr. Preferred stock, $25 par value                         $31,250

Cr. Paid-in capital excess of par preferred stock  $22,000

Explanation:

1. The Excess of common stock and cash received will be recorded in the Paid in capital in excess of par value, common Stock account.

Common Stock, $20 Par Value = 5,000 shares × $20 per share = $100,000

Paid in capital in excess of par value, common Stock = $120,000 – $100,000 = $20,000

2.The Excess of common stock and cash received will be recorded in the Paid in capital in excess of stated value, common Stock account.

Common stock = $1 x 2,500 = $2,500

Paid-in capital in excess of stated value, common stock = $22,000 - $2,500 = $19,500

4. The Excess of common stock and cash received will be recorded in the Paid in capital in excess of par value, common Stock account.

Preferred Stock, $25 Par Value = 1,250 shares × $25 per share = $31,250

Paid in capital in excess of par value, preferred Stock = $53,250 – $31,250 = $22,000

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2 years ago
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3 years ago
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