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ki77a [65]
2 years ago
6

Sheffield Corp. bought a machine on January 1, 2011 for $814000. The machine had an expected life of 20 years and was expected t

o have a salvage value of $82000. On July 1, 2021, the company reviewed the potential of the machine and determined that its future net cash flows totaled $408000 and its fair value was $273000. If the company does not plan to dispose of it, what should Sheffield record as an impairment loss on July 1, 2021
Business
1 answer:
Alja [10]2 years ago
3 0

Answer:

$156,700

Explanation:

Depreciation expense = [Cost-salvage value] /useful life

Depreciation expense = [814000 - 82000]/20

Depreciation expense = $36600

1 January 2011 - 1 July 2021 = 10.5 years . Total depreciation = 10.5 * $36600= 384,300

Book value as on 1 July 2021 = Cost - Accumulated depreciation

Book value as on 1 July 2021 = 814000-384300

Book value as on 1 July 2021 = 429700

Net realizable value = Lower of future cash flow or fair value

Lower of 408000 or 273000

Net realizable value = 273000

Now, since the Book value is more than net realizable value, Asset is impaired

Impairment loss = $273,000 - $429,700

Impairment loss = $156,700

Thus, Sheffield should record $156,700 as an impairment loss on July 1, 2021.

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If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:
Over [174]

Answer:

no impact

Explanation:

The journal entry to purchase the supplies for cash

Supplies Dr $ 1,300  

   To Cash A/c  $ 1,300

(Being the purchase of supplies is recorded)

For recording this we debited the supplies as it increased the assets and credited the cash as it decreased the assets

Therefore there is no impact on the accounting equation

7 0
3 years ago
Which of the following is NOT a repayment plan option?
max2010maxim [7]

Answer: Loan forgiveness repayment plan.

Explanation:

The Extended Repayment Plan: This is a repayment plan option whereby the loan can be paid back for a period of about 25 years.

The Income-Sensitive Repayment Plan: This is a repayment plan option for those who want low income. Here, payment can either increase or reduce based on what the person earns annually.

The Graduated Repayment Plan: This is a repayment plan option which increases every two years.

The loan forgiveness repayment plan is not a repayment plan option.

4 0
3 years ago
Use the following to prepare the cash budget. What is the ending cash balance? Beginning cash balance $3,000; Cash receipts $50,
aleksley [76]

Answer:

 Ending cash balance = $13,000

Explanation:

<em>A cash budget is statement that shows the estimated cash receipts and the estimated cash payments for a forth coming accounting period. In addition, it provides information about the expected cash balance for the period to which it relates.</em>

With help of a cash budget, a business can plan ahead for  the usage of its surplus funds and how to finance its deficit cash position

Ending cash balance = Beginning cash balance + cash receipts - cash payment

             = 3,000 + 50,000 - 40,000

 Ending cash balance = $13,000

7 0
3 years ago
The process through which a product or service takes root initially in simple applications at the bottom of a market and then mo
cricket20 [7]

The process through which a product or service takes root initially in simple applications at the bottom of a market and then moves up, eventually displacing established companies, is referred to as <u>Disruptive Innovation</u>.

In a business idea, disruptive innovation is an innovation that creates a brand new market and price network or enters at the lowest of an existing market and in the end displaces established marketplace-leading companies, products, and alliances.

Disruptive innovation refers to using a generation that upsets a structure, instead of "disruptive technology", which refers back to the era itself. Amazon, launched as an online bookstall in the mid-Nineties, is an example of disruptive innovation.

Disruptive innovation is the manner by using which a smaller enterprise—normally with fewer sources—moves upmarket and demanding situations larger, hooked-up corporations.

Learn more about disruptive innovation here brainly.com/question/17185200

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8 0
1 year ago
The _____ is an agency of the federal government that offers both managerial and financial assistance to small businesses.
Reil [10]

Answer:

D. Small Business Administration.

Explanation:

The Small Business Administration (SBA) is an agency of the federal government that offers both managerial and financial assistance to small businesses. SBA was established in 1953 as an autonomous or independent agency of the government of the United States of America. Generally, it is saddled with the responsibility of providing both managerial and financial assistance and counseling to small businesses in order to bolster the American economy.

The small business administration (SBA) serves as an intermediary between entrepreneurs and investors or creditors, in order to provide them with the necessary funds required to plan, start and grow their business.

<em>Basically, SBA provides services such as entrepreneurial development, access to funds, advocacy and contracting to small businesses (entrepreneurs) in the United States of America. </em>

5 0
3 years ago
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