1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Alexus [3.1K]
3 years ago
6

Determining asset cost, preparing depreciation schedules (3 methods), and identifying depreciation results that meet management

objectives
On January 3, 2018, Rapid Delivery Service purchased a truck at a cost of $100,000. Before placing the truck in service, Rapid spent $3,000 painting it, $600 replacing tires, and $10,400 overhauling the engine. The truck should remain in service for five years and have a residual value of $12,000. The truck’s annual mileage is expected to be 32,000 miles in each of the first four years and 8,000 miles in the fifth year—136,000 miles in total. In deciding which depreciation method to use, Andy Sargeant, the general manager, requests a depreciation schedule for each of the depreciation methods (straight-line, units-of-production, and double-declining-balance).
Requirements
Prepare a depreciation schedule for each depreciation method, showing asset cost, depreciation expense, accumulated depreciation, and asset book value.
Rapid prepares financial statements using the depreciation method that reports the highest net income in the early years of asset use, Consider the first year that Rapid uses the truck. Identify the depreciation method that meets the company’s objectives.
Business
1 answer:
den301095 [7]3 years ago
7 0

Answer:

total cost = $100,000 + $3,000 + $600 + $10,400 = $114,000

straight line depreciation expense = ($114,000 - $12,000) x 1/5 = $20,400

year       depreciation expense        book value

1                   $20,400                         $93,600

2                  $20,400                         $73,200

3                  $20,400                         $52,800

4                  $20,400                         $32,400

5                  $20,400                         $12,000

<u>RESULTS IN HIGHER INCOME DURING THE FIRST YEAR. </u>

<u />

units of production deprecation = ($114,000 - $12,000) / 136,000 = $0.75 per mile

year       depreciation expense        book value

1                   $24,000                         $90,000

2                  $24,000                         $66,000

3                  $24,000                         $42,000

4                  $24,000                         $18,000

5                  $6,000                           $12,000

double-declining-balance depreciation:

depreciation year 1 = $114,000 x 2/5 = $45,600

depreciation year 2 = $68,400 x 2/5 = $27,360

depreciation year 3 = $41,040 x 2/5 = $16,416

depreciation year 4 = $24,624 x 2/5 = $9,850

depreciation year 5 = $14,774 - $12,000 = $2,774

year       depreciation expense        book value

1                   $45,600                         $68,400

2                  $27,360                         $41,040

3                  $16,416                           $24,624

4                  $9,850                           $14,774

5                  $2,774                            $12,000

You might be interested in
Borstorff and her associates examined a number of factors related to employee willingness and concluded that married couples wit
konstantin123 [22]

Answer:

The answer would be FALSE

Explanation:

There is no information necessary to answer the question but it is more likely that a couple with children will want to accept a job abroad because they have no responsibility such as child support, school, etc. for a child.

In the case of a couple with small children, they are less likely to agree to go elsewhere because of the expenses that this would imply.

3 0
3 years ago
Revising for Conciseness - Rejecting Redundancies and PurgingEmpty Words
ludmilkaskok [199]

Answer:

Answer (A) - 1 and 2

Answer (B) - 3

Answer (C) - 2

Explanation:

There are three sections to this question.

PART A: Rejecting Redundancies

Among the 4 options given in this section, the redundancies are

1. Adequate enough

2. Combined together

Why? Because there is repetition in the phrases! Adequate is the same thing as Enough and Combined means the same thing as Together.

PART B: Purging Empty Words

For the statement given, the option containing the empty words is

3. "that was unfinished"

Why? Because this is the unnecessary phrase that needs to be eliminated from the sentence, not even for conciseness sake but for the sake of proper grammar and better comprehension by the reader.

PART C: Revising a Passage

For the passage given, the type of revision that could be made to make it more concise is

2. Drop unnecessary fillers

Why? Because the second statement in the passage was an unnecessary filler. It contained information that required story telling about the efforts of "Jump High Schools".

3 0
3 years ago
An economics professor is discussing a measure of inflation over time based on a basket of goods comprised of all the components
Jlenok [28]

Answer:

GDP Price Deflator

Explanation:

GDP price deflator is a measure of the general changes in the price level of all the finished goods and services in a country in a period.  While GDP is a measure of the total output in an economy, the GDP price deflator shows the extent to which prices changed in a period. In proving the effects of price changes, the GDP deflator identifies a base year then compares the current prices to base year prices.

The GDP price deflator allows economists to compare the GDP   of different periods while considering the inflation between those periods. It does this by comparing the nominal GDP with the real GDP.

3 0
3 years ago
An all-equity business has 100 million shares outstanding selling for $20 a share. Management believes that interest rates are u
dedylja [7]

Answer:

a) Market Value = $100 million × $20 = $2,000 million = $2 billion

Market value of equity would remain same = $2 billion

b) Market value would remain same after recap. Only market capitalization would reduce to half.

Market value of equity = 1 billion

c) Buying back shares increases the stock price which demonstrates the faith of the company in its work. But creditors have capital gains.

d) After recap and cash flow firm total value has increased to $2 billion + $100 Million = $2.1 billion and market value of equity has increased from $20 to $22 . ($1000 + $100)/50 = $22.

e) Equity shareholders have gained due to increase in there share value

Explanation:

4 0
3 years ago
Fillia, inc. worked on three jobs this period: job 14c, which cost $15,000; job 23a, which cost $28,000, and job 45b, which cost
mafiozo [28]
The cost of goods manufactured during the period would be the $15000 + $28000 + $23000 is $66000. In other words, the costs are the total amount of costs added up for all three of the projects since goods were presumably produced by all three projects.
7 0
3 years ago
Other questions:
  • Mohave Corp. is considering outsourcing production of the umbrella tote bag included with some of its products. The company has
    10·1 answer
  • An economy is experiencing a high rate of inflation. The government wants to reduceconsumption by $36 billion to reduce inflatio
    7·1 answer
  • What is networking in business?
    9·1 answer
  • Suppose that as a result of a housing price​ decline, the value of the​ bank's securitized assets falls by an uncertain​ amount,
    10·1 answer
  • J.C. Penney Company is expected to pay a dividend in year 1 of $1.65, a dividend in year 2 of $1.97, and a dividend in year 3 of
    5·1 answer
  • I need Public Administration introdution please about half a page​
    12·1 answer
  • Recording Transactions Affecting Stockholders’ Equity
    8·1 answer
  • The part of the market that a specific product is focusing on is called a____.
    15·2 answers
  • Explain how herbs are used in treating any<br>5 diseases<br>​
    13·1 answer
  • Which policy tools are considered automatic stabilizers?
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!