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bazaltina [42]
3 years ago
5

Last year Aft charged $2,946,667 Depreciation on the Income Statement of Andrews. If early this year Aft purchased a new depreci

able asset, the effect on Andrews's financial statements would be (all other items remaining equal):
Business
1 answer:
Kisachek [45]3 years ago
3 0

Answer:

Decrease in Bank balance and increase in fixed assets

Explanation:

When a new depreciable asset is purchased, the money leaves the bank account hence reducing the bank balance in the statement of financial position, and on the other hand the 'Fixed asset' balance will rise by the same amount; recognizing the addition to the assets of the company. In this scenario the balance sheet totals remain unchanged as the same amount has been subtracted from 'bank' and added to 'fixed assets' all within the asset side.

However, if the asset is debt financed, it will increase the long term liability figure because 'bank loan' will be recognized. Hence the totals of the balance sheet will rise by the amount of the loan on the 'Capital and liabilities' side and the amount of the asset on the 'Asset' side.

Another impact is that the amount of depreciation charged to the Income Statement will be higher than $2,946,667 which was charged in the previous year because the new asset's depreciation will have to be added.

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Carol sold her investment property for $450,000 and had $21,000 in closing costs. The property had a beginning basis of $312,000
MAVERICK [17]

Answer:

$163,000

Explanation:

New adjusted basis for Carol's property will be

the Beginning basis plus capital gain minus depreciation

=$312,000  + 34,000 - $ 80,000

=$346,000 -$80,000

=$266,000

The net amount realized from the sale is

Selling cost minus closing costs

= $450,000 -$21,000

=$429,000

The capital gain will be the amount received - new adjusted basis

=$429,000 - 266,000

=$163,000

3 0
3 years ago
Alpha Mining Company recognizes $2 of depletion for each ton of ore mined. During 2016, 850,000 tons of ore were mined and 725,0
jonny [76]

Answer:

1. $1,700,000

2. $250,000

3. $1,450,000

Explanation:

Given that,

Depletion for each ton of ore mined = $2

Ore mined during 2016 = 850,000 tons

Ore sold during 2016 = 725,000 tons

1. Accumulated depletion:

= Ore mined during 2016 × Depletion for each ton of ore mined

= 850,000 tons × $2

= $1,700,000

2. Inventory:

= (Ore mined during 2016 - Ore sold during 2016) × Depletion for each ton of ore mined

= (850,000 tons - 725,000 tons) × $2

= 125,000 tons × $2

= $250,000

3. Cost of goods sold:

= Ore sold during 2016 × Depletion for each ton of ore mined

= 725,000 tons × $2

= $1,450,000

3 0
3 years ago
Yield to maturity (YTM) is the rate of return expected from a bond held until its maturity date. However, the YTM equals the exp
Nonamiya [84]

Answer:

The bond will not be called.

Explanation:

The yield to maturity (YTM of, is the internal rate of return (overall interest rate) earned by an investor who buys the bond today at the market price, assuming that the bond is held until maturity, and that the principal payments are made on schedule, it is equal to the current price of the bond.

YTM equals the expected rate of return under certain assumptions like the bond will not be called.

4 0
3 years ago
Trails End Vacations has a $2,200 account receivable from the Sun City Kiwanis. On March 11, the Kiwanis makes a partial payment
Pavlova-9 [17]

Answer:

Cash $1,050 (debit)

Accounts Receivable :Sun City Kiwanis $1,050 (credit)

Explanation:

When Kiwanis makes a partial payment to settle their account, in Trails Ends records, we recognize (1) an the increase in the assets of cash and (2) recognize a decrease in the assets of accounts receivable.

3 0
3 years ago
A company that manufactures laser printers for computers has monthly fixed costs of $177,000 and variable costs of $650 per unit
nydimaria [60]

Answer:

295 units

Explanation:

The cost -volume-profits CVP concepts calculate the breakeven point by dividing fixed costs by the contribution margin per unit.

i.e., Breakeven point = Fixed cost/ contribution margin per unit.

For this company,

Fixed costs are $177,000

Contribution margin per unit

= selling price - variable costs.

=$1250 -$650

=$600

Breakeven point = $177,000 / $600

=295 units

6 0
3 years ago
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