A tractor was purchased for $74486 and at the bank interest rate of 4.67% per year. The residual value of the tractor was 4.67% of the purchase value at the end of useful life of 10 years. Calculate the interest cost of the tractor $ 2416
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- Electro Corporation bought a new machine and agreed to pay for it in equal annual installments of 5,000 at the end of each of the next 5 years. Assume a prevailing interest rate of 15%. The present value of an ordinary annuity of 1 at 15% for 5 periods is 3.35. The future amount of an ordinary annuity of 1 at 15% for 5 periods is 6.74. The present value of 1 at 15% for 5 periods is 0.5. How much should Electro record as the cost of the machine? a. 12,500 b. 16,750 c. 25,000 d. 33,700For each of the following unrelated situations, calculate the annual amortization expense and prepare a journal entry to record the expense: A. A patent with a seventeen-year remaining legal life was purchased for $850,000. The patent will be usable for another six years. B. A patent was acquired on a new tablet. The cost of the patent itself was only $12,000, but the market value of the patent is $150,000. The company expects to be able to use this patent for all twenty years of its life.Calico Inc. purchased a patent on a new drug it created. The patent cost $12,000. The patent has a life of twenty years, but Calico expects to be able to sell the drug for fifty years. Calculate the amortization expense and record the journal for the first years expense.
- Steele Corp. purchases equipment for $30,000. Regarding the purchase, Steele paid shipping of $1,200, paid installation fees of $2,750, pays annual maintenance cost of $250, and received a 10% discount on sales price. Determine the acquisition cost of the equipment.Calico Inc. purchased a patent on a new drug. The patent cost $21,000. The patent has a life of twenty years, but Calico only expects to be able to sell the drug for fifteen years. Calculate the amortization expense and record the journal for the first-year expense.A truck was purchased for $58,000 and depreciates $6560 per year. Suppose that the vehicle is depreciated so that it holds 60% of its value from the previous year. Write an exponential function of the form =yV0bt , where V0 is the initial value and t is the number of years after purchase.
- Sterling Plastics purchased a truck for RO 6400. The truck will be used for 5 years and the residual value is 1900 RO. Find the book value at the end of second year using Sum of the Years-Digits methodhans co. is deciding to "purchase or lease" an automatic mixing equipment that will cost 35000, to be depreciated straight-line basis over a 4-year period useful life. tax=30%. if owned, annual maintenance & insurance expenses = 2500. hans co. wacc = 18%. if leased, lease payment = 11,923.17 at the start of each year. compute for after-tax annual maintenance & insurance expense.Using the double declining balance method, Determine the yearly amortization of a car costing $45000 with a residual value of $4000. The car has an estimated life of 10 years and was purchased on July 1st. Include the yearly amortization of the asset for the 10 years.
- A machine was purchased for $ 8,000, with an estimated useful life of 10 years, and it has a scrap value of $ 1,000 and rate of interest = %10. Calculate the The book value at the end of the eighth year using sinking fund methodCAT Co. is a dealer of machinery. It leased to DOG Co. a machine with a cost of $200,000 for 5 years with $80,000 annual rent payable at the end of each year. The machine has an estimated useful life of 5 years. The present value factor of an annuity of 1 for five years at 12% is 3.60. What amount of gross profit on sale should be recorded by CAT Co.?A tractor for over-the-road hauling is purchased for $90,000. It is expected to be of use to the company for 6 years,after which it will be salvaged for $4,000. Calculate the depreciation deduction and the unrecovered investment during each year of the tractor’s life. Use declining balance depreciation with a rate that ensures the book value equals the salvage value.
