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sweet-ann [11.9K]
2 years ago
14

(True) or (False)? The total amount of depreciation accumulated for an asset over its entire life will differ depending on the m

ethod of depreciation used.
Business
1 answer:
vladimir1956 [14]2 years ago
5 0

Answer:

True

Explanation:

Let us illustrate this using the below hypothetical case:

Asset acquired-motor vehicle

useful life is 3 years

salvage value $20,000

cost of the asset=$100,000

depreciation methods:

straight-line method

double-declining balance method

depreciation under straight-line method=(cost-salvage value)/useful life

depreciation under straight-line method=($100,000-$20,000)/3=$26,666.67  

accumulated depreciation for 3 years=$26,666.67  *3=$80,000

double declining balance method:

double-declining rate=100%/useful life *2=100%/3*2=67%

2 means double

year 1 depreciation=$100,000*67%=$67,000

year 2 depreciation=($100,000-$67000)*67%=$22,110  

year 3 depreciation=($100,000-$67000-$22110)*67%=$7,296  

accumulated depreciation for 3 years=$67,000+$22,110+$7,296=$96,406  

$80,000 not equal to $96,406  

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Stonewall Corporation issued $52,000 of 5%, 10-year convertible bonds. Each $1,000 bond is convertible to 10 shares of common st
zalisa [80]

Answer:

A January 1, 2020

Dr Cash $54,600

Cr Bonds payable $52,000

Cr Premium on bonds payable $2,600

B. December 21 2022

Dr Bonds payable $52,000

Dr Premium on bonds payable $1,820

Cr Common stock $26,000

Cr Paid in capital in excess of Par $27,820

Explanation:

Preparation of the entry for Stonewall Corporation

A January 1, 2020

Dr Cash $54,600

($52,000+$2,600)

Cr Bonds payable $52,000

Cr Premium on bonds payable $2,600

(5%*$52,000)

(To record issue of bonds for premium)

B. December 21 2022

Dr Bonds payable $52,000

Dr Premium on bonds payable $1,820

(100%-30%*$2,600)

Cr Common stock $26,000

(52*10*50)

Cr Paid in capital in excess of Par $27,820

($52,000+$1,820-$26,000)

(To record conversion of bonds into Common Stock)

7 0
3 years ago
You missed a monthly payment on your mortgage. Your monthly payment is $1,278. Your mortgage holder places a 5% penalty on all t
balandron [24]

Answer:

A. $63.9

Explanation:

Your monthly payment is $1,278 => One-month payment is a fixed amount of $1,278

Your mortgage holder places a 5% penalty on all late payments so that the penalty cost for 1 month late would be 5% of one-month payment.

=> Penalty cost can be calculated as the following equation:

<em>Penalty cost = One-month payment x 5% </em>

<em>= 1,278 x 5 / 100 = $63.9</em>

So total penalty cost would be $63.9

3 0
3 years ago
Read 2 more answers
What is your assessment of the strength of competitive pressures stemming from the threat of entry of new competitors into the N
djyliett [7]

Incomplete question. Assumed you are referring to this article;

Six years after turning the leadership of Costco Wholesale over to the then- president, Craig Jelinek, Jim Sinegal, Costco’s co-founder and chief executive officer (CEO) from 1983 until year-end 2011, had ample reason to be pleased with the company’s ongoing revenue growth and competitive standing as one of the world’s biggest and best consumer goods merchandisers. Sinegal had been the driving force behind Costco’s 35-year evolution from a startup entrepreneurial venture into the largest retailer in the United States, the seventh-largest retailer in the world, and the undisputed leader of the discounted warehouse and wholesale club segment of the North America retailing industry. Since January 2012, when Craig Jelinek took reins as Costco Wholesale’s president and CEO, the company had prospered growing from annual revenue of $89 billion and 598 membership warehouse at year-end fiscal 2011 to annual revenues of $126.2 billion and 741 membership warehouse at year-end fiscal 2017. Costco’s growth continued in the first nine months of fiscal 2018. 9-month revenue was $95.0 billion, up 12.0 percent over 9 months of fiscal 2017, and the company had opened four additional warehouses. As of June 2018, Costco ranked as the second-largest retailer in both the United States and the world.

<u>Explanation:</u>

Note, the threat arising from new competitors into a particular market refers to the likelihood that this company or business would overtake existing ones in their market share.

However, <em>recall </em>that we are told that Costco has been in the business for up to 35 years, and has become "the undisputed leader of the discounted warehouse and wholesale club segment of the North America retailing industry," this fact alone makes us and the new competitors weary of how difficult to acquire part of the market. This thus puts Costco at a competitive advantage.

4 0
2 years ago
Tom's Shoes makes a profit from selling its shoes, provides free shoes to children in countries in need, encourages volunteers t
Tcecarenko [31]

Answer: Value of its stakeholders

Explanation: Tom's shoes is doing the charity work and also earning good profits from selling its product. Stakeholders refers to all those parties who will get affected due to operations of the business.

One of the stakeholders for every business entity is the society in which it resides in. Tom's shoes is creating value to one of its stakeholders by free distribution of its product to those in need .

3 0
3 years ago
Two or more items are omitted in each of the following tabulations of income statement data. Fill in the amounts that are missin
tankabanditka [31]

Answer:

<u>For 2013:</u>

Net sales = $279,000

Ending inventory = $32,000

Purchases = $242,000

<u>For 2014:</u>

Sales revenue = $360,000

Cost of Goods sold = $269,000

Ending inventory = $24,000

<u>For 2015:</u>

Net sales = $390,000

Sales returns and allowances = $20,000

Beginning inventory = $24,000

Ending inventory = $31,000

Explanation:

Note: See the attached excel file for the tabulated income statement data to see the filled missing amounts. The answers are the ones in bold red color.

For each of the years, the calculations are done as follows:

<u>For 2013:</u>

Net sales = Sales revenue - Sales returns and allowances = $290,000 - $11,000 = $279,000

Ending inventory in 2013 = Beginning inventory in 2014 = $32,000

Purchases = Cost of Goods sold - Beginning inventory + Purchase returns and allowances – Freight-in + Ending inventory = $233,000 - 20,000 + 5,000 - 8,000 + $32,000 = $242,000

<u>For 2014:</u>

Sales revenue = Sales returns and allowances + Net sales = $13,000 + $347,000 = $360,000

Cost of Goods sold = Net sales - Gross profit on sales = $347,000 - $91,000 = $269,000

Ending inventory = Beginning inventory + Purchases - Purchase returns and allowances + Freight-in - Cost of Goods sold = $32,000 + $260,000 - $8,000 + $9,000 - $269,000 = $24,000

<u>For 2015:</u>

Net sales = Cost of Goods sold + Gross profit on sales = $293,000 + $97,000 = $390,000

Sales returns and allowances = Sales revenue - Net sales = $410,000 - $390,000 = $20,000

Beginning inventory in 2015 = Ending inventory in 2014 = $24,000

Ending inventory = Beginning inventory + Purchases - Purchase returns and allowances + Freight-in - Cost of Goods sold = $24,000 + $298,000 - $10,000 + $12,000 - $293,000 = $31,000

Download xlsx
5 0
2 years ago
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