What is the color of this ?

On January 1, Year 1, Marino Moving Company paid $48,000 cash to purchase a truck. The truck was expected to have a four year us

Ede4ka [16]

Answer:

Account Titles Debit Credit

Depreciation Expense 10,000

Accumulated Depreciation 10,000

Explanation:

Depreciation is the actual decrease in the value of an asset. The asset is depreciated on its useful life on by a fixed percentage of carrying value.

Original Cost of Truck = $48,000

Estimated useful Life = 4 years

Estimated Salvage Value = $8,000

Formula for straight line depreciation is

Depreciation per year =( Cost of Asset - salvage value ) / useful life

Depreciation per year = ( $48,000 - $8,000 ) / 4 years

Depreciation per year = 10,000 per year

$10,000 will be charged every year for 4 years.

8 0

3 years ago

A flood destroyed a company’s warehouse contents on September 12. The following information was the only information that was sa

anygoal [31]

The estimated cost of lost inventory = $4552.1

Explanation:

The cost of lost inventory = inventory,begining+purchases of the period-((1-avg gross profit ratio)(sales for the period-returns for the period))

The cost of lost inventory=$29900+$18900-((1-0.21)($56900-$890))

=$48800-((0.79)(56010))

=$48800-(44247.9)

=$4552.1

The estimated cost of lost inventory is $4552.1

6 0

4 years ago

General Importers announced that it will pay a dividend of $4.25 per share one year from today. After that, the company expects

bazaltina [42]

Answer:

$12.93

Explanation:

First , find the dividend amount per year;

D1 = 4.25

D2,D3,D4,D5, D6 = 0

D3 = 2.2020(1.024) = 2.2548

D7 onwards = 2.35

Next, find the present value of the dividends at 12.6%;

PV (of D1) = 4.25/ 1.126 = 3.7744

PV (of D2 to D6) = 0

PV (of D7 onwards) today = (2.35/0.126) /(1.126^6)

PV (of D7 onwards) today = 18.6508 / 2.0381 = 9.1511

Add the PVs to find price of stock;

= 3.7744 + 0 + 9.1511

= $12.93

5 0

3 years ago

Shelton Co. purchased a parcel of land six years ago for $866,500. At that time, the firm invested $138,000 in grading the site

nikklg [1K]

Answer: $918,000

Explanation: Since Shelton Co is considering building a warehouse on the site because the rental lease is expiring then in evaluating the new project all the relevant cash flows must be considered in the protect evaluation. Market value of the land used for constructing the building is an opportunity cash flow and so must be considered. The Relevant cost of opportunity for land will be its fair value.

Therefore ,the initial cost cost of the warehouse project for the use of this land is $918, 000.

5 0

3 years ago

Read 2 more answers

Times Inc. is trying to develop an asset-financing plan. The firm has $540,000 in temporary current assets and $440,000 in perma

masya89 [10]

Answer:

Times Inc.

Conservative Aggressive

a) Annual interest payments $207,360 $184,275

b) Earnings After Taxes $127,584 $141,475

c) Annual interest payments $149,040 $172,125

Earnings After Taxes $162,576 $148,725

Explanation:

a) Data and Calculations:

Temporary current assets = $540,000

Permanent current assets = 440,000

Fixed assets = 640,000

Total assets = $1,620,000

Assumed tax rate = 40%

Conservative Aggressive

Financed by long-term sources 80% 56.25%

Long-term finance $1,296,000 $911,250

Short-term finance 324,000 (20%) 708,750 (43.75%)

Annual interest payments:

Long-term interest rate = 14% $181,440 $127,575

Short-term interest rate = 8% 25,920 56,700

Total annual interest payments $207,360 $184,275

b) Earnings before

interest and taxes $420,000 $420,000

Annual interest payments 207,360 184,275

Earnings before taxes $212,640 $235,725

Income taxes (40%) 85,056 94,250

Earnings After Taxes $127,584 $141,475

Annual interest payments:

Long-term interest rate = 8% $103,680 $72,900

Short-term interest rate = 14% 45,360 99,225

Total annual interest payments $149,040 $172,125

c) Earnings before

interest and taxes $420,000 $420,000

Annual interest payments 149,040 172,125

Earnings before taxes $270,960 $247,875

Income taxes (40%) 108,384 99,150

Earnings After Taxes $162,576 $148,725

5 0

3 years ago