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DaniilM [7]
3 years ago
11

On January 1, 2020, a company purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck

has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2022, the company sold the truck for $30,000. What amount of gain or loss should the company record on December 31, 2022?
Business
1 answer:
lianna [129]3 years ago
8 0

Answer:

a loss of $3,000

Explanation:

A company makes a gain on the disposal of an asset when the amount received from the disposal is higher than the net book value or carrying amount of the asset.

The netbook value of the asset is the difference between the cost and the accumulated depreciation of the asset. The accumulated depreciation is the total depreciation over the used life of the asset and the depreciation is the result of the cost less residual value divided by the estimated asset life.

In light of the above,

Annual depreciation = ($48,000 - $8,000)/8

= $5,000

Between January 1 2020 and December 31 2022 is 3 years,

Accumulated depreciation at December 31, 2022

= 3 * $5,000

= $15,000

NBV at December 31, 2022

= $48,000 - $15,000

= $33,000

Gain/(loss) on disposal = $30,000 - $33,000

= ($3,000)

The company would record a loss of $3,000

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Chang Industries has 2,000 defective units of product that already cost $14 each to produce. A salvage company will purchase the
tiny-mole [99]

Answer:

Sunk cost

Explanation:

-Incremental cost is the total cost of producing an additional unit.

-Sunk cost is a cost that has already been paid and that it is not possible to get it back.

-Out-of-pocket cost is a cost that requires a direct payment in the actual period.

-Opportunity cost is the cost of not receiving a benefit when you choose an alernative over another one.

-Period cost is a cost that is not associated with the production of goods.

According to this, the answer is that the $14 per unit is a sunk cost because the company has already spent that manufacturing the products and it is not able to recover that money.

6 0
3 years ago
Dana and Emile allocate​ 2/3 of their​ partnership's profits and losses to Dana and​ 1/3 to Emile. The net income of the firm is
Usimov [2.4K]

Answer:

Debit income summary $30,00

Explanation:

Closing entries are used to move balances from temporary accounts to permanent baccounts so that a business can recognise income or loss made during an accounting period.

2/3 profit and loss is for Dana, that is (2/3)* 30,000= $20,000

1/3 of profit is assigned to Emile that is (1/3)* 30,000= $10,000

So the close out entries will be

A debit to income summary of $30,000

A credit to Dana of $20,000

A credit to Emile of $10,000

6 0
2 years ago
Rao Construction recently reported $28.00 million of sales, $12.60 million of operating costs other than depreciation, and $3.00
stich3 [128]

Answer:

a. $12.40

Explanation:

EBIT stands for earnings before interest and taxes; therefore, interest and taxes rates should not be considered. The EBIT is determined as the amount from sales deducted by operating costs and depreciation. The EBIT is:

EBIT = \$28.00-\$12.60-\$3.00\\EBIT=\$12.40

The answer is alternative a. $12.40.

6 0
3 years ago
Two methods of capital investment analysis that incorporate the time value of money are:______.
babymother [125]

Two methods of capital investment analysis that incorporate the time value of money are -Net Present Value and Discounted Cash Flow

1- Net Present Value

Net Present Value reduces the expected future cash flows by a specific rate to arrive at their value in today's terms. After subtracting the initial investment cost from the present value of the expected cash flows, it can be  determined whether the project is worth pursuing. If the NPV is a positive number, it means it's worth pursuing while a negative NPV means the future cash flows aren't generating enough return to be worth it and cover the initial investment.

2- Discounted Cash Flow

With DCF analysis, the discount rate is typically the rate of return that's considered risk-free and represents the alternative investment of the project. The present value is the value of the expected cash flows in today's dollars by discounting or subtracting the discount rate. If the result or present value of the cash flows is greater than the rate of return from the discount rate, the investment is worth pursuing.

To learn more about Net Present Value and Discounted Cash Flow here

brainly.com/question/23040788

#SPJ4

5 0
1 year ago
Procter & Gamble plans to raise its number of global customers to 5 billion. Two countries integral to P&G’s success is
ch4aika [34]

Answer: C. P&G faces a stiff rivalry with Hindustan Unilever in India, which is the market leader in consumer goods.

5 0
2 years ago
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