Select the correct answer.

On April 1, 2013, Four Seasons Landscaping, LLC purchased new lawn mowers for $70,000 in cash (total cost). They have a useful l

creativ13 [48]

Answer:

Please see the calculation explanation below and the depreciation expense chart for all methods is attached.

Explanation:

1. STRAIGHT-LINE DEPRECIATION METHOD:

Depreciation Expense = (Total Cost - Residual Value) / Useful Life

Depreciation Expense = ($70,000 - $10,000) / 3 years

Depreciation Expense = $60,000 / 3 years

Depreciation Expense = $20,000 per year

2. DOUBLE DECLINING BALANCE DEPRECIATION METHOD:

Depreciation Expense Rate = (100% / Useful Life) x 2

Depreciation Expense Rate = (100% / 3) x 2

Depreciation Expense Rate = 66.67%

2013: 

Depreciation Expense = $70,000 x 66.67% = $46,667

2014: 

Depreciation Expense = ($70,000 - $46,667) x 66.67% = $15,556

Since the residual value is $10,000 and as per Double Declining Balance Method, the point at which Book Value is equal to the residual value, no depreciation is taken.

Depreciation Expense = (Total Cost - Residual Value) - (Accumulated Depreciation)

Depreciation Expense = ($70,000 - $10,000) - ($46,667)

Depreciation Expense = $13,333

2015: 

No Depreciation Expense for year 3, as Book value is already equal to residual value in year 2.

3. PER HOUR DEPRECIATION METHOD:

2013:

Depreciation Cost per hour = (Engine Hours in 2013 / Total Engine Hours) x (Total Cost - Residual Value)

Depreciation Cost per hour = (500 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $25,000

2014: 

Depreciation Cost per hour = (Engine Hours in 2014 / Total Engine Hours) x (Total Cost - Residual Value)

Depreciation Cost per hour = (400 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $20,000

2015: 

Depreciation Cost per hour = (Engine Hours in 2015 / Total Engine Hours) x (Total Cost - Residual Value)

Depreciation Cost per hour = (300 / 1,200) x ($70,000 - $10,000)

Depreciation Cost per hour = $15,000

6 0

3 years ago

Bonds are basically also known as what?

Karo-lina-s [1.5K]

bonds are basically known as

b)contracts

8 0

3 years ago

During March, Adams Company had sales of $5,000,000, variable expenses of $3,000,000, and fixed expenses of $1,500,000. Assume t

ad-work [718]

Answer:

Option (c) is correct.

Explanation:

Variable cost as a percent of sales:

= (Variable expenses ÷ Sales) × 100

= ($3,000,000 ÷ $5,000,000) × 100

= 60%

If Sales = X

then Variable cost is 0.6X (i.e. 60% of Sales)

Sales - Variable cost - fixed expenses = net operating income

X - 0.6X - 1,500,000 = 300,000

0.4X = 300000 + 1500000 = 1800000

X = 1800000 ÷ 0.4

= 4,500,000

4 0

3 years ago

In the individual level adoption process for a low involvement good, such as a new pack of gum or candy bar, what two steps in t

likoan [24]

Answer:

evaluation and trial

Explanation:

In low involvement goods such as a new pack of gum or candy bar the evaluation and trial stages are often reversed. This is mainly due to there being very low risk for trying out a new unrecognized brand of such a product, this combined with the amount of time needed in order to evaluate other options greatly outweighs the benefit. Therefore most individuals try the product out instead of evaluating all options which isn't done for higher risk purchases.

8 0

3 years ago

Bud’s Bucket ice cream company produces a chemically enriched ice cream and decides to penetrate the gourmet market by offering

ipn [44]

Answer:

It may turn off it's current customer base and cause them to purchase a competitors ice cream.

Explanation:

Market penetration strategy is the process of selling current products to an already existing market so as to obtain a higher market share by taking the market shares from the other competing companies.

Market penetration strategy uses low prices to generate demand for a product and increase market share. Bud's bucket ice cream decides to penetrate the gourmet market by offering its same ice cream at high prices instead of reducing the price, this might lead to a reduction in their current customer base.

6 0

3 years ago