A man has purchased a new automobile. He wishes to set aside enough money in a bank account to pay the maintenance on the car for the first 5 years. It has been estimated that the maintenance is as follows: Year 1 the maintenance cost = $120 Year 2 the maintenance cost = $150 Year 3 the maintenance cost = $180 Year- 4 the maintenance cost =$210 Year- 5 the maintenance cost =$240. Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should the car owner deposit in the bank now? Also, give the following given: G = ? A/G = ? Atotal = ? Pototal = ?

A man has purchased a new automobile. He wishes to set aside enough money in a bank account to pay the maintenance on the car for the first 5 years. It has been estimated that the maintenance is as follows: Year 1 the maintenance cost = $120 Year 2 the maintenance cost = $150 Year 3 the maintenance cost = $180 Year- 4 the maintenance cost =$210 Year- 5 the maintenance cost =$240. Assume the maintenance costs occur at the end of each year and that the bank pays 5% interest. How much should the car owner deposit in the bank now? Also, give the following given: G = ? A/G = ? Atotal = ? Pototal = ?

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter9: Current Liabilities, Contingencies, And The Time Value Of Money

Section: Chapter Questions

Problem 9.19E

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Kenzie purchased a new 3-D printer for $450,000. Although this printer is expected to last for ten years, Kenzie knows the technology will become old quickly and so she plans to replace this printer in three years. At that point, Kenzie believes she will be able to sell the printer for $30,000. Calculate yearly depreciation using the double-declining-balance method.
Johnson, Incorporated had the following transactions during the year: Purchased a building for $5,000,000 using a mortgage for financing Paid $2,000 for ordinary repair on a piece of equipment Sold product on account to customers for $1,500,600 Purchased a copyright for $5,000 cash Paid $20,000 cash to add a storage shed in the corner of an existing building Paid $360,000 in monthly salaries Paid $25,000 for routine maintenance on equipment Paid $110,000 for major repairs If all transactions were recorded properly, what amount did Johnson capitalize for the year, and what amount did Johnson expense for the year?
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