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3 years ago

Most of the assets were bought a long

Business

1 answer:

Margarita [4]3 years ago

4 0

Answer:

Historical cost principle

Explanation:

Assets must be recorded at cost value, not market value. When you record an asset, you cannot change its value every period, you have to keep using the historical value. This is why we use a separate account to record accumulated depreciation of assets, so that the purchase cost is always constant, but the net carrying value will vary depending on depreciation expense.

Market value changes and can be very volatile. Imagine a house, whose initial value was $300,000, then it increased to $500,000 but the market went down and its value was $350,000. It would be a mess to change the value and pay capital gains taxes, or then report a loss.

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A pest control company sprays insecticide around the perimeter of a 180 ft by 180 ft building. if the spray costs $0.11 per foot

Bess [88]

To the nearest dollar, it would cost $3,564

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4 years ago

A manufacturer paid total factory payroll of $200,000 in cash. The journal entry for this transaction includes a:

andrew11 [14]

Based on the information given the journal entry for this transaction includes a: Debit Factory Wages Payable $200,000; Credit Cash $200,000.

Based on the given details the we were told that total factory payroll of the amount of $200,000 was paid by cash by the manufacturer.

Hence:

The appropriate journal entry to record this transaction is:

Debit Factory Wages Payable $200,000

Credit Cash $200,000

(To record factory wages payable)

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3 years ago

Kessler, Inc. received the following information from its pension plan trustee concerning the operation of the company's defined

Savatey [412]

Answer:

(a) $493,200

Explanation:

(a) Pension expense to be reported in 2018:

= Service cost + Interest on projected benefit obligation - Expected return on plan assets + Amortization of prior service cost

= $137,500 + ($2,480,000 × 9%) - (1,150,000 × 9%) + $236,000

= $137,500 + $223,200 - $103,500 + $236,000

= $493,200

(b) The journal entry is as follows:

Pension expenses A/c Dr. $493,200

Pension Asset/ Liability A/c Dr. $242,800

To cash $500,000

To Other comprehensive income $236,000

(To record the pension expense and the employer's contribution to the pension plan)

8 0

3 years ago

Lockheed Martin is increasing its booster thrust power in order to win more satellite launch contracts from European companies i

Valentin [98]

Answer:

Lockheed Martin needs to make $3,476,250 per year (during 8 years) to cover their costs and investment required for the project if their MARR is 12%.

Explanation:

required investment -$13,000,000

operating costs per year = -$900,000

8 years useful life, salvage value of $500,000

to calculate the annual worth we need to determine capital recovery of the project:

capital recovery = [-$13,000,000 x annuity factor PV (A/P, 12%, 8)] + [$500,000 x annuity factor (A/F, 12%, 8)] = (-$13,000,000 x .2013) + ($500,000 x .0813) = -$2,616,900 + $40,650 = -$2,576,250

this means that Lockheed Martin would need to earn $2,576,250 during 8 years just to recover their investment.

since the company will also incur in yearly operating costs, they must include them to determine the total annual worth of the project:

annual worth = -$2,576,250 - $900,000 = -$3,476,250

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3 years ago

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

Makovka662 [10]

d. by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

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3 years ago