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mafiozo [28]
3 years ago
7

Kansas Enterprises purchased equipment for $60,000 on January 1, 2012. The equipment is expected to have a five-year life, with

a residual value of $5,000 at the end of five years.Using the straight-line method, depreciation expense for 2013 and the book value at December 31, 2013 would be:a. $12,000 and $36,000.b. $12,000 and $31,000.c. $11,000 and $33,000.d. $11,000 and $38,000.
Business
1 answer:
Rudiy273 years ago
5 0

Answer:

(D) Annual depreciation will be $11000

And book value will be $38000

Explanation:

We have given Kansas purchased equipment for $60000

So Acquisition cost = $60000

Residual value = $5000

We know that annual depreciation is given by

Life time = 5 years

Annual depreciation expense =\frac{Acquisition\ cost-residual\ value}{life\ time}=\frac{$60000-$5000}{5}=$11000

Depreciation expense is the same every year under straight-line. Therefore, in 2013 the depreciation expense is $11,000

Book value is given by

Book value =  Acquisition Cost - Accumulated Depreciation

= 60000-2\times (110000)=$38000

The Book Value of the asset is therefore $38,000 after 2 years of service

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Bouchard Company's stock sells for $20 per share, its last dividend (D0) was $1.00, and its growth rate is a constant 6 percent.
Delicious77 [7]

Answer:

The answer is 11,3%

Explanation:

The cost of common stock is common stockholders’ required rate of return. There are 3 methods to calculate the cost of common stock:

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Knowing the current market price of a stock and the last dividend paid, we can calculate the required rate of return, which is equal to the cost of common stock.

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To calculate D1 you need to use the following formula= D0x(1+g)

<u>Using the exercise information:</u>

D1=D0*(1+g)=1*1,06=1,06

P0=20

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