Answer:
2017 depreciation expense= 10,060*3/12=$2,515
2018 depreciation expense=$10,060
Explanation:
The depreciation expense of machine for the whole year shall be calculated as follows:
Depreciation expense=[(89,920-9,440)/8]=$10,060
Since the machine is only used for 3 months in the year ended December 31, 2017, therefore the depreciation expense in 2017 will be calculated as follows
2017 depreciation expense= 10,060*3/12=$2,515
2018 depreciation expense=$10,060
Answer: $230,000
Explanation:
Gross profit to be earned from project:
= Construction price - cost of construction
= 6,000,000 - 5,500,000
= $500,000
Percentage of costs incurred in 2017:
= 2,530,000 / 5,500,000 * 100%
= 46%
The Gross profit for 2017 is therefore:
= Percentage of cost incurred * total gross profit
= 46% * 500,000
= $230,000
Answer:
2 years
Explanation:
Payback period is the amount of time it takes to recover the amount invested in a project from its cumulative cash flows
In the first year, -$85,000 + $30,000 = -$55,000 is recovered
In the second year, -$55,000 + $55,000 = 0
The total amount invested is recovered in the second year