When both the offeror and the offeree agree to all terms and conditions of the contract, this is known as

On January 1, 2019, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and insta

irinina [24]

Answer:

annual depreciation expense = $6000

so correct option is d. $6,000

Explanation:

given data

machine costing = $40,000

transportation and installation = $1,000

useful life = 6 years

residual value = $5,000

to find out

How much is the annual depreciation expense

solution

we get here first Cost of machine that is

Cost = $40,000 + $1000

cost = $41000

so depreciable base will be here

Depreciable base = cost - residual value

Depreciable base = 41000 - 5000

Depreciable base = $36,000

so annual depreciation expense is

annual depreciation expense = $\frac{36000}{6}$

annual depreciation expense = $6000

so correct option is d. $6,000

3 0

4 years ago

On August 1 the Darius Co. purchased a photocopy machine for $8,000. The estimated annual depreciation on the machine is $1,680.

slamgirl [31]

Answer:

a) $700 debit to Depreciation Expense and a $700 credit to Accumulated Depreciation.

Explanation:

The adjusting journal entry is shown below:

On December 31

Depreciation expense $700

To Accumulated depreciation - Machine A/c $700

(Being the depreciation expense is recorded)

The computation is shown below:

= Estimated annual depreciation on the machine × number of months ÷ total number of months in a year

= $1,680 × 5 months ÷ 12 months

= $700

6 0

3 years ago

During 2020, XYZ Corporation had 1,000,000 shares of common stock and 50,000 shares of 6% preferred stock outstanding. The prefe

motikmotik

Answer:

XYZ Corporation

a. Basic earnings per share = $6,000,000/1,000,000

= $6.00

b. Diluted earnings per share = $6,000,000/1,010,500

= $5.94

Explanation:

a) Data and Calculations:

Outstanding shares December 31, 2020:

Common stock = 1,000,000 shares

6% Preferred stock = 50,000 shares

Dividends declared:

Preferred $200,000

Common $400,000

Issue of shares during the year:

6% Convertible Bonds = $2,100,000

Each $1,000 bond convertible into = 5 common shares

= $2,100,000/$1,000 * 5 = 10,500

Net income for the year = $6,200,000

Preferred dividend = (200,000)

Available for common stock = $6,000,000 ($6,200,000 - $200,000)

Income tax rate = 25%

4 0

3 years ago

A company had the following unit costs when 9,000 units were produced: Direct labor at $7.25 per unit; Direct material at $8.00

Svetradugi [14.3K]

Answer:

A : $28.25 is the total production cost per unit under Absorption Costing.

Explanation:

The absorption costing method is a costing method that is applied in evaluating inventory which not only covers the cost of materials and labor but including both variable and fixed manufacturing overhead costs also.

Under the absorption costing, the unit product cost is calculated as follows:

<em>Total production cost per unit = Direct materials + Direct labor + Variable overhead + Fixed manufacturing overhead allocated</em>

Total production cost per unit = 8.00 + 7.25 + 5.50 + 7.50

= $28.25

$28.25 is the total production cost per unit under Absorption Costing.

5 0

3 years ago

Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its befor

Arturiano [62]

Answer:

Cost of common equity is 15.7% and WACC is 7.2%

Explanation:

D1 is

D1= 2.25 (1+0.05)

The cost of common equity is

Rs = 2.36/ 22.00 + 5% =0.157= 15.7%

The cost of common equity is weighted average cost of capital (WACC)

WACC = (0.35) * (0.08) (1- 0.40) + 0 preferred stock+ (0.35) * (0.157)

WACC = 0.03 *0.6 + 0 + 0.054

WACC = 0.018 + 0.054

WACC = 7.2%

4 0

3 years ago