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Goryan [66]
3 years ago
15

Equipment costing $130,000 is expected to have a residual value of $10,000 at the end of its six-year useful life. The equipment

is metered so that the number of units processed is counted. The equipment is designed to process 1,000,000 units in its lifetime. In 2019 and 2020, the equipment processed 180,000 units and 140,000 units respectively. Calculate the depreciation expense for 2019 and 2020 using each of the following methods:
Business
1 answer:
Natalija [7]3 years ago
6 0

Answer:

a. Straight-Line method:

Year depreciation = (Cost - Residual value) / useful life

= (130,000 - 10,000) / 6

= $20,000

2019 = $20,000                                      2020 = $20,000

b. Double declining.

= Twice the rate of straight-line.

= 1 / 6 * 2

= 33%

2019                                                            2020

= 130,000 * 33%                                        = (130,000 - 42,900) * 33%

= $42,900                                                 = $28,743

c. Units of Production:

Rate per unit = (Cost - residual) / Number of units in lifetime

= (130,000 - 10,000) / 1,000,000

= $0.12 per unit

2019                                                              2020

= 180,000 * 0.12                                           = 140,000 * 0.12

= $21,600                                                     = $16,800

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3 years ago
Assume that Simple Co. had credit sales of $258,000 and cost of goods sold of $158,000 for the period. Simple uses the aging met
Sphinxa [80]

Answer: The amount of bad debt expense the company would record would be $3,470.

Explanation: Bad debt expense is an estimate of accounts receivable that is deemed as uncollectible while allowance for doubtful accounts is a balance sheet allowance account that warehouses the total balance of accounts receivable that is deemed irrecoverable.

In this scenario, Simple Co. estimated, using the aging method, that the allowance for doubtful accounts is $3,800. However, it had a credit balance of $330 in the same account. The reinstate the allowance account to $3,800, $3,470 has to be adjusted for by debiting bad debt expense and crediting allowance for doubtful account.

3 0
3 years ago
In an emergency situation the driver should always contact the dispatcher? True or false
Goryan [66]

Most definitely True

7 0
3 years ago
Read 2 more answers
Englewood Company has an opportunity to produce and sell a revolutionary new smoke detector for homes. To determine whether this
Alchen [17]

Answer:

1) Compute the net cash inflow (cash receipts less yearly cash operating expenses) anticipated from the sale of the smoke detectors for each year over the next 12 years.

year              net cash flow

0                   -$140,000

1                    ($20 x 4,000) - $70,000 - $127,500 + $7,500 = -$110,000

2                   ($20 x 7,000) - $70,000 - $127,500 + $7,500 = -$50,000

3                   ($20 x 10,000) - $50,000 - $127,500 + $7,500 = $30,000

4                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

5                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

6                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

7                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

8                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

9                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

10                  ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

11                   ($20 x 12,000) - $40,000 - $127,500 + $7,500 = $80,000

12                  ($20 x 12,000) - $40,000 - $127,500 + $7,500 + $40,000 +

                    $10,000 = $130,000

2) Using the data computed in (1) above and other data provided in the  problem, determine the net present value of the proposed investment.

using a financial calculator, the NPV = -$56,801.13

3) Would you recommend that Englewood Company accept the smoke detector as a new product?

Since the NPV is negative, the project should be rejected.

8 0
3 years ago
You are the newly appointed sales manager of the Rock Computer Tablets Company and have been charged with the task of increasing
OverLord2011 [107]

Answer:

The correct answer is:

increase prices (B)      

Explanation:

Price elasticity of demand (PED) is the measure of how the quantity of goods demanded change, as the selling of the good change. Mathematically, it is represented as the percentage change in the quantity of good demanded divided by the percentage change in the price of the good.

Price elasticity of demand can be; greater than one, less than one, equal to one, zero, or infinite.

If price elasticity of demand is less than one, it is said to be elastic, meaning that the demand for a product is sensitive to the change in price, and an increase in price will cause a reduction in revenue by the seller, while a reduction in price results to an increase in the quantity demanded, hence increasing revenue. For example, an increase in the price of chicken, may cause consumers to go for turkey instead, leading to a reduction in the demand for chicken.

A price elasticity of demand of less than one is termed inelastic, and an increase in the price of the product does not cause a significant drop in the quantity of the goods demanded, and this is the case seen in our example, so increasing the price of the good will increase the revenue.

When PED is equal to one, it is said to be unit elastic, and it means that the quantity demanded varies proportionately with change in price. For example if the price of a product increases by 50%, and 50% of its regular buyers switch to another brand.

A price elasticity of demand of zero is said to be perfectly inelastic, and it means that the demand for a good does not change at all, irrespective of the change in price.

Finally, a PED equal to infinity (∞) is said to be perfectly elastic, and consumers will only buy the product at only one price and nothing more.

5 0
3 years ago
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