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
horsena [70]
2 years ago
8

The management of Ro Corporation is investigating automating a process. Old equipment, with a current salvage value of $21,000,

would be replaced by a new machine. The new machine would be purchased for $420,000 and would have a 6 year useful life and no salvage value. By automating the process, the company would save $145,000 per year in cash operating costs. The simple rate of return on the investment is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)
Business
1 answer:
Nadya [2.5K]2 years ago
6 0

Answer: 18.8%

Explanation:

Simple rate of return on investment = Incremental net operating income / investment

Incremental net income = Operating savings - Annual cost

= 145,000 - 420,000/6 years

= $75,000

Net investment = Cost of new machine - salvage value of old

= 420,000 - 21,000

= $399,000

Return on investment = 75,000/399,000

= 18.8%

You might be interested in
In the balance sheet at the end of its first year of operations, Dinty Inc. reported an allowance for uncollectible accounts of
Vlada [557]

Answer:

The correct option is 2. $50,200

Explanation:

Please see below the required journals for the transactions that occurred:

Debit Allowance for doubtful accounts             $31,800

Credit Accounts receivable                                $31,800

(<em>To record write-off of accounts receivable)</em>

Debit Accounts receivable                           $2,340,000

Credit Sales revenue                                    $2,340,000

<em>(To record credit sales during the year)</em>

Debit Cash                                                      $1,910,000

Credit Accounts receivable                           $1,910,000

<em>(To record collection on account)</em>

  • The effect of the above journals on allowance for doubtful account is a reduction. Since Dinty already assessed its allowance for doubtful account to be $82,000, bad debt expense required will be $50,200 ($82,000 - $31,800).
  • The balance in accounts receivable will be $2,340,000 - $1,910,000 - $31,800 = $398,200.
7 0
2 years ago
Bramble Company uses the percentage of receivables method for recording bad debt expense. The accounts receivable balance is $59
shusha [124]

Answer and Explanation

Given:

Accounts receivable balance = $598,000

Percentage of receivables that are uncollectible = 5% or 0.05

Uncollectible receivables = 0.05 × 598,000 = $29,900

Adjusting journal entry to record bad debt expense is:

Particulars                                          Debit              Credit

Bad debts expense                            XXXXX

     Allowance for doubtful debts                               XXXXX

(Being bad debts incurred)

Noe, Allowance for doubtful debts has a credit balance of $4,800.

Bad debt incurred = 29,900 - 4,800 = $25,100

So adjusting entry :

Particulars                                          Debit              Credit

Bad debts expense                            $25,100

     Allowance for doubtful debts                             $25,100

(Being bad debts incurred)

7 0
3 years ago
Question 5 of 10
kogti [31]

Answer:

the first option is the correct one

8 0
2 years ago
West africa has tropical wet and dry forests, also known as tropical ________ forests, which receive rainfall for several months
galina1969 [7]
The answer to this question is rain.
3 0
3 years ago
1. Heather and Joe want the lowest interest rate for their residential mortgage. Which financial institution is designed to offe
gogolik [260]
By definition, a mortgage is loan that is used to purchase a property. The financial institutions can are designed to offer low interest rates on residential mortgages are commercial banks and loan associations. They often lead against the one-to-four family mortgages.
7 0
3 years ago
Other questions:
  • Gordon Corporation produces 1,000 units of a part per year which are used in the assembly of one of its products. The unit cost
    9·1 answer
  • Consider the following items:
    9·1 answer
  • Consider the single factor APT. Portfolio A has a beta of .2 and an expected return of 13%. Portfolio B has a beta of .4 and an
    7·1 answer
  • Key activities of supply management include negotiations, logistics, contract development and administration, inventory control
    12·1 answer
  • How do price changes drive markets toward equilibrium?
    5·1 answer
  • Shale oil mining corporation is a u.s. employer. shale oil and other u.s. employers must perform i-9 verifications for
    10·1 answer
  • Average fixed costs a. are defined as the change in total costs divided by the change in output. b. will always increase as outp
    15·1 answer
  • A company paid $150,000, plus a 6% commission and $4,000 in closing costs for a property. The property included land appraised a
    9·1 answer
  • Two of the biggest products the United States receives from other countries are
    15·1 answer
  • Compute predetermined overhead rates and explain why estimated overhead costs (rather than actual overhead costs) are used in th
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!