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Ahat [919]
3 years ago
6

Saul Company purchased a tractor at a cost of $180,000. The tractor has an estimated salvage value of $20,000 and an estimated l

ife of 8 years, or 12,000 hours of operation. The tractor was purchased on January 1, 2019 and was used 2,400 hours in 2019 and 2,200 hours in 2020. What method of depreciation will produce the maximum depreciation expense in 2019?
a. Units-of-production
b. Double-declining-balance
c. Straight-line
d. All methods produce the same expense in 2019
Business
1 answer:
Mila [183]3 years ago
5 0

Answer:

b. Double-declining-balance

Explanation:

There is no harm in trying out all the methods and see for your self the one that will produce the maximum depreciation expense in 2019.

Units-of-production

Depreciation Expense = Units taken in the Period / Expected total amounts in units × Depreciable Amount (Cost - Salvage Value)

Therefore,

Depreciation Expense = 2,400 hours / 12,000 hours × ( $180,000 - $20,000)

                                      = $32,000

Double -declining-balance

Depreciation Expense = 2 × SLDP × BVSLDP

SLDP = 100 ÷ Number of useful Life

         = 100 ÷ 8

         = 12.5 %

Therefore,

Depreciation Expense = 2 × 12.5 % × $180,000

                                      = $45,000

Straight Line

Depreciation Expense = Cost - Residual Value ÷ Estimated Useful Life

                                     = ($180,000 - $20,000) ÷ 8 years

                                     = $20,000

<u>Conclusion</u>

As can be seen from the above calculation, Double-declining-balance produce the maximum depreciation expense in 2019.

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Cobe Company has already manufactured 23,000 units of Product A at a cost of $25 per unit. The 23,000 units can be sold at this
zysi [14]

Answer:

It is more profitable to continue processing the units.

Explanation:

Giving the following information:

Product A:

Units= 23,000

Selling price= $420,000

Continue processing:

Product B= 6,000 units sold for $106 each

Product C= 11,900 units sold for $52 each

Total cost= $280,000

We need to calculate the effect on the income of both options and choose the most profitable on<u>e. We will not take into account the first costs of Product A because they are irrelevant.</u>

Option 1:

Effect on income= $420,000

Option 2:

Effect on income= (6,000*106) + (11,900*52) - 280,000

Effect on income= $974,800

It is more profitable to continue processing the units.

7 0
3 years ago
The advanced machinery used for limestone quarrying in a particular region leads to noise pollution and affects the hearing abil
Tanzania [10]

Answer:

A. Recent environmental research reveals that the dust from the limestone quarrying site has severely contaminated the water at a nearby lake.

Explanation:

The limestone production results in huge social effects like, noise pollution, soil pollution, which affects lives of people. And since the manufacturers or producers of limestone do not care about the social results of such production, they shall be liable to pay huge taxes.

As for this, the cause as stated in statement A is absolutely suitable.

Also the prices are more in this area even after so much of social destruction.

Accordingly high taxes as a penalty for such social destruction shall be charged.

4 0
3 years ago
If the equilibrium price of avocados is $4 and the government issues a price ceiling of $4.50, what is likely to happen in the m
Marat540 [252]

Answer:

A surplus of avocados will result from the price ceiling.

Explanation:

A price ceiling is when the government or an agency of the government sets the maximum price for a good or service.

A price ceiling is binding when it is set below equilibrium price.

The price ceiling ($4.50) is less than the equilibrium price ($4) of avocados. As a result, surplus would increase. The supply of avocados would exceed the demand because price ceiling is above equilibrium price

6 0
3 years ago
Companies benefit from employee balance because, compared to poorly balanced employees, well balanced employees __________. a. S
LiRa [457]

Well balanced employees can be more productive, they can be more stable and stay on their jobs longer, and if they like their jobs, they will be satisfied. Your answer would be D! The reason why is that the other answer choices cover what a satisfied employee would do.

<br>

<span>Have a nice day! :)</span>

8 0
3 years ago
Read 2 more answers
1. A parent provides consulting services to its wholly-owned subsidiary during the year. The parent charged the subsidiary $600,
Fed [463]

Answer:

C

Explanation:

When consolidating parent and a wholly-owned subsidiary we aim to eliminate entries related to the inter company services. Since the subsidiary had recorded a debit to service expense when it was rendered, the adjusting entry would be a credit to the service expense amount by the same figure charged i.e. $600,000 in this case

6 0
3 years ago
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