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On January 1, 2021, the Excel Delivery Company purchased a delivery van for $46,000. At the end of its five-year service life, i

marusya05 [52]

Answer:

Given

Cost $46000

Life= 5 years

Salvage Value= $ 4000

Total miles = 165,000

Formula

Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life

Straight Line Rate= 100%/ useful Life= 100%/5 = 20%

Double Declining Method = 2 * Straight Line Rate

Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%

1. Depreciation Straight Line Method= Cost - Salvage Value/ Useful Life

Depreciation Straight Line Method= $ 46000- $4000/ 5= $ 8,400

The depreciation expense using the straight line method does not change unless the salvage value is reached

Years Depreciation Accumulated Dep Book Value

(Cost - Accu. Dep)

a. 2021 $ 8,4000 8400 37600

b. 2022 $ 8,4000 16,800 29,200

c. 2023 $ 8,4000 25200 20,800

d. 2024 $ 8,4000 33,600 12,400

e. 2025 $ 8,4000 42000 4000

2. Straight Line Rate= 100%/ useful Life= 100%/5 = 20%

Double Declining Method = 2 * Straight Line Rate

Double Declining Method = 2 * Straight Line Rate= 2*20%= 40%

In double declining method the rate is multiplied to the cost to get the depreciation expense. 40 % of $ 46000= $ 18400

Each year the rate is multiplied with the remaining book value after deducting the depreciation expense from the cost as $ 46000- $ 18400= $ 27600

Next years depreciation will be $ 27600 * 40%= $ 11040.

This will be added in the original depreciation expense $ 18400 + $ 11040 = $ 29440 and deducted from cost to get the book value. $ 46,000- $ 29440 = $ 16560.

Again rate will be multiplied and each years depreciation will be calculated similarly.

It has been summarized in the table below.

Years Dep Rate Dep Expense Accu. Dep. Book Value

a. 2021 40% 18400 18400 27600

b. 2022 40% 11040 29440 16560

c. 2023 40% 6624 36064 9936

d. 2024 40% 3974.4 40,038.4 5961.6

e. 2025 40% 2384.64 42,0423.4 3576.96

3. Depreciation per unit= (Cost -Salvage value) / Total units of production* Units of Production

Years Mileage Depreciation Depreciation

a. 2021 35,000 ($ 42000/165000)*35000 8909.09

b. 2022 37,000 ($ 42000/165000)*37000 9418.18

c. 2023 28,000 ($ 42000/165000)*28000 7127.27

d. 2024 33,000 ($ 42000/165000)*33000 8400

e. 2025 34,000 ($ 42000/165000)*34000 8654.54

7 0

3 years ago

Why is childhood an important time?

Lera25 [3.4K]

Answer:

so childhood, is when your learning everything, up to the point where your're an adult, so basically, you're learning, to eat, walk, speak, and basically the important stuff, and an adult is always busy, no matter what, they are always busy, in some way, and don't have much time to make friends like kids do

4 0

2 years ago

Financial markets A. channel funds indirectly between borrowers and lenders. B. channel funds directly from lenders to borrowers

Afina-wow [57]

Answer:

B) channel funds directly from lenders to borrowers.

Explanation:

The complete financial system is a means by which money is transferred from savers to borrowers. The financial system is made up of banks, insurance companies, financial markets, and other financial institutions that allow the exchange of money.

Financial markets are the only type of institution that allows the exchange of money from lenders to borrowers without third parties being involved.

6 0

3 years ago

3. Vocabulary test. Explain the differences between: a. Real and financial assets. b. Capital budgeting and financing decisions.

VikaD [51]

Answer:

The correct answer is:

a) A real asset is a Tangible Asset, Like a machine, a Land or a Building. Real Assets are used to generate resources and, therefore, produce changes in the financial situation of the company that owns them. While a financial asset on the other hand constitutes the right to collect an account in the future. In the case of companies, you can think of an account or document receivable; For natural persons, a financial asset can be a document that compares a plaque investment in a banking institution and that will produce a cash flow in the future.

b) Investment projects are independent, perfectly divisible, and the company can invest any amount of money in a project. Only investment opportunities existing at the present time and not future are considered. While capital budgeting, it is a projection either in the short term or in the long term, and the reasons for making this budget are that: Benefits from the point of view of administrative planning and control., an investment proposal must be judged in relation to whether it provides a return equal to or greater than that required by investors y the evaluation of projects through mathematical-financial methods.

c) When a corporation is established, its shares may be in the hands of a small group of investors, perhaps the company's administrators plus some sponsors. In this case, the shares are not sold to the public and the company is closed. Over time, if the company grows and new shares are issued to raise capital, these shares go public. The company becomes a public company.

d) Limited liability means that the liability of each partner's debt is limited to their investment in the business, that is, they cannot be held personally responsible for the debts of other parties, if the company is sued or forced to close, the Each partner's business assets may be liquidated, but his personal assets are safe. Furthermore, unlimited liability means that all parties are responsible for all debts of the company, regardless of how it was created. If a partner commits acts that cause the business to reconcile, all parties become part of the process, not just the partners whose actions caused the judgment.

8 0

2 years ago

In 2018, Sheridan Company had credit sales of $894000. On January 1, 2018, Allowance for Doubtful Accounts had a credit balance

Fantom [35]

Answer:

$37,100

Explanation:

The computation of the adjustment made to Allowance for Doubtful Accounts is shown below:

= Ending account receivable balance × uncollectible percentage - credit balance of Allowance for Doubtful Accounts + written off amount

= $235,000 × 10% - $22,300 + $35,900

= $23,500 - $22,300 + $35,900

= $37,100

We simply applied the above formula so that the adjustment amount could arrive

4 0

3 years ago