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denpristay [2]
3 years ago
12

On January 1, Year 1, Dunn Brothers, Inc., purchased a new smartphone case making machine at a cost of $80,000. The estimated re

sidual value was $9,000. Assume that the estimated useful life was four years and the estimated productive life of the machine was 710,000 units. Actual annual production was as follows: Year Units 1 213,000 2 156,200 3 195,250 4 145,550 Required: a. Calculate depreciation expense under the Straight-line method for Years 1 to 4. b. Calculate depreciation expense under the Units-of-production method for Years 1 to 4. c. Complete a depreciation schedule under the Double-declining-balance method.
Business
1 answer:
Gala2k [10]3 years ago
5 0

Answer:

Depreciation expense under:

  • the Straight-line method for Years 1 to 4 is $71,000.
  • the Units-of-production method for Years 1 to 4 is $71,000.
  • the Double-declining-balance method is $75,000.

Explanation:

Under straight-line method, depreciation expense is (cost - residual value) / No of years = ($80,000 - $9,000) / 4 years = $17,750 yearly depreciation expense.

Depreciation expense for Years 1 to 4 is $17,750 x 4 years $71,000.

The unit-of-production method is used when the asset value closely relates to the units of output it is able to produce. It is expressed with the formula below:

(Original Cost - Salvage value) / Estimated production capacity x Units/year

At Year 1, depreciation expense (DE) is: ($80,000 - $9,000) / 710,000 units x 213,000 units = $21,300

At Year 2, DE = $71,000 / 710,000 units x 156,200 units = $15,620

At Year 3, DE = $71,000 / 710,000 units x 195,250 units = $19,525

At Year 4, DE = $71,000 / 710,000 units x 145,550 units = $14,555

Note that this depreciation method results in higher depreciation charge when the asset is heavily used, at this time, it was in Year 1, followed by Year 2.  

Depreciation expense for Years 1 to 4, under this method, is $71,000 (addition of all the yearly depreciation).

The double-declining method is otherwise known as the reducing balance method and is given by the formula below:

Double declining method = 2 X SLDP X BV

SLDP = straight-line depreciation percentage

BV = Book value

SLDP is 100%/4years = 25%, then 25% multiplied by 2 to give 50%

At Year 1, 50% X $80,000 = $40,000

At Year 2, 50% X $40,000 ($80,000 - $40,000) = $20,000

At Year 3, 50% X $20,000 ($40,000 - $20,000) = $10,000

At Year 4, 50% X $10,000 ($20,000 - $10,000) = $5,000 (the depreciation expense would stop at this stage since the amount falls below the residual value).

Depreciation expense for Years 1 to 4, under this method, is $75,000 (addition of all the yearly depreciation).

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Answer:

b. supply curve for diamond rings will shift right, which will create a surplus at the current price. Price will decrease, which will increase quantity demanded and decrease quantity supplied. The new market equilibrium will be at a lower price and higher quantity

Explanation:

This question isn't complete. The full question can be found here: https://www.chegg.com/homework-help/questions-and-answers/market-diamond-rings-closely-linked-market-high-quality-diamonds-large-quantity-high-quali-q34930995

High-quality diamonds are an input used in the production of diamond rings. If the supply of high quality diamonds increases, it implies that the production of diamond rings would increase. As a result of the increased production, the supply curve would shift to the right. This would lead to an excess of supply over demand known as a surplus. This would cause equilibrium price to fall and quantity to rise.

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The following is a partial year-end adjusted trial balance. Account Title Debits Credits Sales revenue $ 460,000 Loss on sale of
dalvyx [7]

Answer:

a) Operating Income = $73,000

b) Net income before income tax = $25,500

Explanation:

First part of the question is to determine the operating income or loss of the business

It is calculated as follows

Particulars                                          Amount

Sales Revenue                                  $460,000

Subtract: Cost of goods sold           ($240,000)

General and Administrative exp.       ($56,000)

Restructuring Costs                             ($58,000)

Selling Expenses                                  ($33,000)

Operating Income                             $73,000

Second part is to determine the income or loss before income taxes

Particulars                                            Amount

Operating Income                                 $73,000

Add: Interest Revenue                         $6,500

Deduct:Loss on sales of investment  ($54,000)

Income before Income Tax                  $25,500

Finally, the Net Income or loss after Income tax

$25,500 x .25 = $6,375

7 0
3 years ago
You own a stock portfolio invested 25 percent in Stock Q, 25 percent in Stock R, 15 percent in Stock S, and 35 percent in Stock
igor_vitrenko [27]

Answer:

1.1265

Explanation:

The computation of the portfolio beta is shown below:

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CAAT Traders acquired machinery on 1 July 20.18 for an amount of R175 300. This machinery was only available for use from 1 Sept
Ilia_Sergeevich [38]

The depreciation expenses to be shown in the statement of profit or loss and other comprehensive income for the year ended (31-05-2019) is R26,295.

<h3>What is depreciation?</h3>

Depreciation can be defined as a process in which the monetary (financial) value of an asset decreases or falls over time, especially due to wear and tear.

<h3>How to determine the depreciation expenses?</h3>

First of all, we would calculate the expected number of units produced by CAAT as follows:

Expected number of units produced = 15,000 + 13,000 + 11,000 + 10,500 + 10,500

Expected number of units produced = 60,000.

Mathematically, the depreciation expenses is given by:

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Substituting the given parameters into the formula, we have;

Depreciation expenses = 9,000/60,000 × 175,300

Depreciation expenses = R26,295.

Read more on depreciation expenses here: brainly.com/question/25806993

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