Question

A Kubota tractor acquired on January 8 at a cost of $62,000 has an estimated useful life of 10 years.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Assuming that it will have no residual value, determine the depreciation for each of the first two years:

- by the straight-line method. Round your answers to the nearest
dollar.
**First Year****Second Year**$ $ - by the double-declining-balance method. Round your answers to
the nearest dollar.
**First Year****Second Year**$ $

Answer #1

A storage tank acquired at the beginning of the fiscal
year at a cost of $129,600 has an estimated residual value of
$11,000 and an estimated useful life of 10 years. Determine the
amount of depreciation for the first and second years computed by
the double-declining-balance method. Do not round the
double-declining balance rate. Round your answers to the nearest
dollar.
Depreciation
Year 1
$
Year 2
$

Present value of an annuity On January 1, you win $50,000,000 in
the state lottery. The $50,000,000 prize will be paid in equal
installments of $6,250,000 over eight years. The payments will be
made on December 31 of each year, beginning on December 31 of this
year. The current interest rate is 5.5%. This information has been
collected in the Microsoft Excel Online file. Open the spreadsheet,
perform the required analysis, and input your answers in the
question below. Open...

A borrower has two alternatives for a loan: (1) issue a
$240,000, 30-day, 7% note or (2) issue a $240,000, 30-day note that
the creditor discounts at 7%. Assume a 360-day year. This
information has been collected in the Microsoft Excel Online file.
Open the spreadsheet, perform the required analysis, and input your
answers in the questions below.
Open spreadsheet
Calculate the amount of the interest expense for each option.
Round your answer to the nearest dollar.
$ fill in the...

Equipment acquired on January 8 at a cost of $144,930 has an
estimated useful life of 14 years, has an estimated residual value
of $8,850, and is depreciated by the straight-line method. A. What
was the book value of the equipment at December 31 the end of the
fourth year? B. Assuming that the equipment was sold on April 1 of
the fifth year for $98,290, journalize the entries to record (1)
depreciation for the three months until the sale...

Direct labor variances
Bellingham Company produces a product that requires 4 standard
direct labor hours per unit at a standard hourly rate of $20.00 per
hour. 15,000 units used 62,400 hours at an hourly rate of $19.55
per hour.
This information has been collected in the Microsoft Excel
Online file. Open the spreadsheet, perform the required analysis,
and input your answers in the questions below.
Open spreadsheet
What is the direct labor (a) rate variance, (b) time variance,
and (c)...

Net present value—unequal lives
Bunker Hill Mining Company has two competing proposals: a
processing mill and an electric shovel. Both pieces of equipment
have an initial investment of $710,000. The net cash flows
estimated for the two proposals are as follows:
Net Cash Flow
Year
Processing
Mill
Electric
Shovel
1
$311,000
$345,000
2
257,000
315,000
3
257,000
322,000
4
262,000
323,000
5
182,000
6
144,000
7
139,000
8
139,000
The estimated residual value of the processing mill at the end...

Depreciation by Two Methods
Equipment acquired at the beginning of the fiscal year at a cost
of $360,000 has an estimated residual value of $45,000 and an
estimated useful life of 10 years.
a. Determine the amount of annual depreciation
by the straight-line method.
$_____________
b. Determine the amount of depreciation for the
first and second years computed by the double-declining-balance
method.
Depreciation
Year 1
$__________
Year 2
$__________

Dexter Industries purchased packaging equipment on January 8 for
$111,200. The equipment was expected to have a useful life of three
years, or 20,000 operating hours, and a residual value of $7,200.
The equipment was used for 8,680 hours during Year 1, 7,360 hours
in Year 2, and 3,960 hours in Year 3.
Required:
1.
Determine the amount of depreciation expense for the three
years ended December 31 by (a) the straight-line method, (b) the
units-of-activity method, and (c) the...

Maggie's Muffins, Inc., generated $2,000,000 in sales during
2015, and its year-end total assets were $1,600,000. Also, at
year-end 2015, current liabilities were $1,000,000, consisting of
$300,000 of notes payable, $500,000 of accounts payable, and
$200,000 of accruals. Looking ahead to 2016, the company estimates
that its assets must increase at the same rate as sales, its
spontaneous liabilities will increase at the same rate as sales,
its profit margin will be 5%, and its payout ratio will be 50%....

Dexter Industries purchased packaging equipment on January 8 for
$98,000. The equipment was expected to have a useful life of three
years, or 20,000 operating hours, and a residual value of $6,000.
The equipment was used for 8,980 hours during Year 1, 6,930 hours
in Year 2, and 4,090 hours in Year 3. Required: 1. Determine the
amount of depreciation expense for the three years ended December
31 by (a) the straight-line method, (b) the units-of-activity
method, and (c) the...

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