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Dima020 [189]
3 years ago
15

Samson Manufacturing Company, a calendar-year company, purchased a machine for $65,000 on January 1, 20X0. At the date of purcha

se, Samson incurred the following additional costs: Loss on sale of old machinery $1,000 Freight-in 500 Installation cost 2,000 Testing costs prior to regular operation 300 The machine’s estimated salvage value was $5,000, and Samson estimated it would have a useful life of 20 years with depreciation being computed on the straight-line method. In January 20X2, accessories costing $3,600 were added to the machine to reduce its operating costs. These accessories neither prolonged the machine’s life nor provided any additional salvage value. Required: What should Samson record as depreciation expense for 20X2?
Business
1 answer:
zheka24 [161]3 years ago
6 0

Answer:

Samson should record as depreciation expense for 20X2 $3,340

Explanation:

In order to calculate what should Samson record as depreciation expense for 20X2 we would have to calculate first the cost to capitalize as follows:

cost to capitalize=Purchase price+Freight+Installation+Testing

cost to capitalize=$65,000+$500+$2,000+$300

cost to capitalize=$67,800

Depreciation expense 20X1=(Cost of machinery-residual value)/life of machinery

Depreciation expense 20X1=($67,800-$5,000)/20

Depreciation expense 20X1=$3,140

Book value at the beginning of 20X2=Cost of machinery-((Cost of machinery-residual value)/life of machinery)*period of asset used

=$67,800-($62,800-$5,000/20)*2

=$61,520

Therefore, depreciation expense for 20X2=(Book value of machinery+Accesories cost-residual vale)/Life of machinery

=($61,520+$3,600-$5,000)/18

=$3,340

Samson should record as depreciation expense for 20X2 $3,340

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Answer:

A respond to customer

Explanation:

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When customers feel and believe they are offered excellent services, they will recommend the business to other customers. In due course, the business will have a circle of many loyal customers. Ignoring a customer or over-pricing of goods will make existing and potential customers look for alternatives.

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3 years ago
Winnebago Industries, Inc. is a leading manufacturer of motor homes. Suppose Winnebago reported ending inventory at August 29, 2
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= $77,196,000

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7 0
3 years ago
For the following transaction, determine whether cash flows from operating activities will increase, decrease, or remain the sam
grandymaker [24]

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Sari, a movie theater manager, recently implemented a policy stating that workers who are willing to work a double shift on Frid
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8 0
3 years ago
Read 2 more answers
Cotrone Beverages makes energy drinks in three flavors: Original, Strawberry, and Orange. Company is currently operating at 75 p
yulyashka [42]

Answer:

Yes Strawberry line should be dropped as it reduces the overall profit by$ 3600 when the fixed costs are not 20 %

Yes Strawberry line should be dropped as it reduces the overall profit by$ 1720 even when the fixed costs are  20 %

Explanation:

Cotrone Beverages

Differential Analysis

                          Totals                    Totals             Difference / Change

                      including    (less)   Without   (equals)

                     Strawberry             Strawberry

Sales                           253,200    167,600           85600  Decrease

Variable costs              201,400   124,200          77200    Decrease

Fixed costs allocated  35,600        28,480          7120    Decrease

<u>Operating profit (loss)   </u><u>13,200       14,920           (1720)     Increase</u>

<u>Working </u>

<u>Total Fixed Costs Reduced will be = </u> 35,600 *20%= 7120

Here we see the profit is increased by 1720 therefore strawberry line should be dropped.

Cotrone Beverages

Differential Analysis

                          Totals                    Totals             Difference / Change

                      including    (less)   Without   (equals)

                     Strawberry             Strawberry

Sales                           253,200    167,600           85600  Decrease

Variable costs              201,400   124,200          77200    Decrease

Contribution margin     51,800       43,400           8,400    Decrease

Fixed costs allocated  35,600        23,600          12000    Decrease

<u>Operating profit (loss)   </u><u>13,200       16,800           (3,600)   Increase</u>

<u></u>

Yes Strawberry line should be dropped as it reduces the overall profit by$ 3600

<u><em>Working </em></u>

<u><em>We find the totals with and without the strawberry product line and then subtract to find the   differential costs</em></u>

Cotrone Beverages

Product                        Original             Strawberry       Orange     Total

Sales                            $65,200            $85,600         $102,400   253,200

Variable costs              44,000              77,200             80,200      201,400

Contribution margin $21,200                $8,400          $22,200       51,800

Fixed costs allocated 9,400                  12,000              14,200     35,600

Operating profit (loss) $11,800               $(3,600)           $8,000     13,200

If we drop the strawberry line then the new totals would be

Product                        Original          Orange      Total

Sales                            $65,200       $102,400   167,600

Variable costs              44,000          80,200      124,200

Contribution margin $21,200          $22,200       43,400

Fixed costs allocated 9,400               14,200     23,600

Operating profit (loss) $11,800           $8,000     16,800

6 0
3 years ago
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