calculate the removable cost of a building under IFRS
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- Calculate the following: The first year of depreciation on a residential rental building costing $250,000 purchased June 2,2019. $_____________ The second year (2020) of depreciation on a computer costing $5,000 purchased in May 2019, using the half-year convention and accelerated depreciation considering any bonus depreciation taken. $______________ The first year of depreciation on a computer costing $2,800 purchased in May 2019, using the half-year convention and straight-line depreciation with no bonus depreciation. $______________ The third year of depreciation on business furniture costing $10,000 purchased in March 2017, using the half-year convention and accelerated depreciation but no bonus depreciation. $______________Referring to PA7 where Kenzie Company purchased a 3-D printer for $450,000, consider how the purchase of the printer impacts not only depreciation expense each year but also the assets book value. What amount will be recorded as depreciation expense each year, and what will the book value be at the end of each year after depreciation is recorded?The net present value of the cost of operating a machine for the next five years is R8 947. The discount rate used by the company for investment appraisal is 9% Required What is the equivalent annual cost, and the present value of the cost in perpetuity of operating this machine? (Use discount factors to three decimal places) a. Equivalent annual cost: R92 825.56; cost in perpetuity: R9 283 b. Equivalent annual cost: R2 300; cost in perpetuity: R25 555.56 c. Equivalent annual cost: R2 000; cost in perpetuity: R20 000.00 d. Equivalent annual cost: R9 283; cost in perpetuity: R92 825.56
- the furure dismantling , removal and restoration costs are 750 000. an appropriate discount rate (after tax) of 9% is determined. The estimated useful life of the building is 20years. calculate the present value.A piece of equipment costs $50,000 to buy. Insurance costs $1000 a year. The maintenance costs and salvage values are listed below. Which year should you turn in this equipment?Year 1: Maintenance $5,000, salvage value $40,000Year 2: Maintenance $6,500, salvage value $35,000Year 3: Maintenance $8,000, salvage value $30,000Year 4: Maintenance $9,500, salvage value $25,000Year 5: Maintenance $11,000, salvage value $20,000Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The building is expected to take 18 months to complete. Christopher invests the money from the project until it is needed for construction. He is currently earning 10%. The following is the expenditures as they relate to the construction of the building.January 1$1,500,000April 1$1,850,000October 1$1,100,000December 31$1,000,000 1. Compute the amount of interest expense Christopher would capitalize. 2. Compute the amount of interest revenue Christopher would recognize.
- Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The building is expected to take 18 months to complete. Christopher invests the money from the project until it is needed for construction. He is currently earning 10%. The following is the expenditures as they relate to the construction of the building.January 1$1,500,000April 1$1,850,000October 1$1,100,000December 31$1,000,000Required: 2. Compute the amount of interest revenue Christopher would recognize.Your company purchases a new building for $500,000. The upkeep and maintenance of the building ends up costing $10,000 annually. If your company intends to use the building for 20 years, how much will this building be in present money if interest is 5%? $885,660.00 $579,342.00 $6,355,620.00 $735,460.00 $624,620.00 $700,000.00A bridge that was constructed at a cost of P 75,000 is expected to last 30 years, at the end of which time its renewal cost will be P 40,000. Annual repairs and maintenance are P 3,000. What is the capitalized cost of the bridge at an interest of 6%? 133,433.00 50,000.00 125,000.00 140,625.00 75,948.67 58,433.00
- Calculate the B/C ratio (modified) of a building that houses students during their classroom discussion. Theaccommodation equates to P525,000 annually. However, the annual maintenance is P135,000. Its constructioncosts for about 2.3 M. If sold 20 years from its first operating year, it will amount to P250,000. Take MARR = 15%A concrete vibrating equipment will be purchased for a cost of $107,425. After a useful life of 5 years it is assumed the equipment will be sold for $33,450. Assume interest of 7.5% for borrowing money, 4.3% for risk, and 2.2% as the equivalent interest rate fortaxes, insurance, and storage, Calculate the annual ownership cost and the cost per hour assuming the equipment will be used 1920 hr. /yr.Christopher Company borrowed $6 million at 11% on January 1, 2020, to build a new building. The building is expected to take 18 months to complete. Christopher invests the money from the project until it is needed for construction. He is currently earning 10%. The following is the expenditures as they relate to the construction of the building. January 1 $1,500,000 April 1 $1,850,000 October 1 $1,100,000 December 31 $1,000,000 Required: 1) Compute the amount of interest expense Christopher would capitalize. 2) Compute the amount of interest revenue Christopher would recognize.
