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RoseWind [281]
2 years ago
6

Norwood, Inc. purchased a crane at a cost of $80,000. The crane has an estimated residual value of $5,000 and an estimated life

of eight years, or 12,500 hours of operation. The crane was purchased on January 1, 2017, and was used 2,700 hours in 2017 and 2,600 hours in 2018. Refer to the information for Norwood, Inc. If Norwood uses the straight-line depreciation method, what is the book value at December 31, 2019
Business
1 answer:
qwelly [4]2 years ago
8 0

Answer:

Book value= $51,875

Explanation:

Giving the following information:

Purchase price= $80,000

Salvage value= $5,000

Useful life= 8 years

<u>First, we need to calculate the annual depreciation under the straight-line method:</u>

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (80,000 - 5,000) / 8

Annual depreciation= $9,375

<u>Now, we can determine the book value at the end of 2019:</u>

Book value= purchase price - accumulated depreciation

Book value= 80,000 - (9,375*3)

Book value= $51,875

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4 0
3 years ago
Journalize the following transactions for Reed Company. Assume a perpetual inventory system. Also, assume a constant gross profi
igor_vitrenko [27]

Answer:

The Journal entries are as follows:

(i) On April 6,

Cash A/c Dr. $5,000

To Sales                     $5,000

(To record the cash sales )

(ii) On April 6,

Cost of goods sold A/c Dr. $3,000

To merchandise inventory               $3,000

(To record the cost of goods sold)

(iii) On April 12,

Sales return and Allowances A/c Dr. $630

To cash                                                          $630

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(iv) On April 12,

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4 0
3 years ago
Gordon Company reports the following information at the current fiscal year end of December 31: Common Stock, $0.10 par value pe
telo118 [61]

Answer:

$0.71

Explanation:

Calculation to determine What was the average selling price for the common stock issued

Using this formula

Common stock issued avarage selling price=

Paid-in Capital in Excess of Par-Common÷Common Stock par value per share

Let plug in the formula

Common stock issued avarage selling price=($600,000+$98,000)/($98,000÷$0.10)

Common stock issued avarage selling price=$698,000/$980,000

Common stock issued avarage selling price=$0.71

Therefore the average selling price for the common stock issued is $0.71

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2 years ago
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ivanzaharov [21]

Answer:

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Explanation:

Giving the following information:

Each unit is sold for $50

Direct material worth $30

Direct labor worth $5.

Manufacturing overhead cost is $10 per unit of which 70% is variable.

The incremental cost is the variable cost (there is available capacity)

Variable cost= direct material + direct labor + variable manufacturing overhead = 30 + 5 + (10*0.7)= $42

3 0
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