Glen Company owns a truck that is expected to be driven for 300,000 km over its useful life. The cost of the truck was $55,000, and it is expected to have a residual value of $0. In 2019, the truck was driven 22,000 km. How much does the truck amortize in 2019? 1. $5.45 2. None of the answers are correct 3. 120,000 km 4. $120,000 5. $4033.33

Glen Company owns a truck that is expected to be driven for 300,000 km over its useful life. The cost of the truck was $55,000, and it is expected to have a residual value of $0. In 2019, the truck was driven 22,000 km. How much does the truck amortize in 2019? 1. $5.45 2. None of the answers are correct 3. 120,000 km 4. $120,000 5. $4033.33

Name: (Multiple Choice Question)Glen Company owns a truck that is expected t
Uploaded: 2024-03-05T11:50:36.000Z
Channel: Bartleby
Description: (Multiple Choice Question)Glen Company owns a truck that is expected to be driven for 300,000 km over its useful life. The cost of the truck was $55,000, and it is expected to have a residual value of $0. In 2019, the truck was driven 22,000 km. How

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 8PB: Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is...

See similar textbooks

Similar questions

What is the initial book value of a new piece of equipment given the following information? Note that not all items may be needed: Purchase price of new equipment is $113, Shipping cost of the new equipment is $6,000 Salvage value of old equipment being replaced is $51,000 Expected salvage value of the new equipment for depreciation purposes is $34,000 Installation cost for the new equipment is $13,000 Tax rate is 31%
A company is considering two alternatives with regards to equipment which it needs. The alternatives are as follows: Alternative A: Purchase Cost of Equipment 703,668700,000 Salvage Value 100,454100,000 Daily operating cost 501500 Economic life, years 10 Alternative B: Rental at 1,5751,500 per day. At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.
A construction company is considering acquiring a new earthmover The purchase price is $114.000, and an additional $30.000 is required to modify the equipment for special use by the company Theme tails into the MACRS seven-year classification (the tax life), and it will be sold after five years (the project ide) for $54.000 The purchase of the earthmover will have no effect on revenues, but the machine i expected to save the firm 565,000 per year in before tax operating costs, mainly labor. The firm's marginal tax rate is 21% Assume that the initial investment is to be financed by a bank loan at an interest rate of 12% payabile annually Determine the after-tax cash flows by using the generalized cash flow approach and the worth of the investment for this project of the firm's MARR known to be 11% Click the icon to view the MACRS depreciation schedules Click the icon to view the interest factors for discrete compounding when/-12% per year. Click the icon to view the interest factors for…
The Bruin's Den Outdoor Gear is considering a new 7-year project to produce a new tent line. The equipment necessary would cost $1.95 million and be depreciated usi$882,038 $991,492 $854,426 $750,550 $1,103,426ng straight-line depreciation to a book value of zero. At the end of the project, the equipment can be sold for 15 percent of its initial cost. The company believes that it can sell 30,500 tents per year at a price of $78 and variable costs of $37 per tent. The fixed costs will be $535,000 per year. The project will require an initial investment in net working capital of $249,000 that will be recovered at the end of the project. The required rate of return is 12.1 percent and the tax rate is 21 percent. What is the NPV? A. $882,038 B. $991,492 C. $854,426 D. $750,550 E. $1,103,426
Riles Truckers, Inc. acquired a heavy road transporter on January 1, 2014 at a cost of P10 million. The estimated useful life is 10 years. On January 1, 2020, the power train requires replacement, as further maintenance is uneconomical due to the off-road time required. The remainder of the vehicle is perfectly roadworthy and is expected to last for the next four years. The cost of the new power train is P4.5 million. Assuming that the original cost of the power train is P3 million, the total depreciation expense in 2020 is a. P2,200,000 b. P1,150,000 c. P1,825,000 d. P1,450,000
A machine can be purchased at t=0 for $20,000. The estimated life is 15 years, with an estimated salvage value of zero at that time. The average annual operating and maintenance expenses are expected to be $5,500. If MARR =2.54%, what must the average annual revenues be in order to be indifferent between purchasing the machine and doing nothing? $7,120 $3,880 $6,969 @$7,213 $7,175
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?
Montello Inc. purchases a delivery truck for $25,000. The truck has a salvage value of $6,000 and is expected to be driven for 125,000 miles. Montello uses the units-of-production depreciation method, and in year one the company expects the truck to be driven for 26,000 miles; in year two, 30,000 miles; and in year three, 40,000 miles. Consider how the purchase of the truck will impact Montellos depreciation expense each year and what the trucks book value will be each year after depreciation expense is recorded.
Zhang Company is considering the purchase of a new machine. Its invoice price is $200,000, freightcharges are estimated to be $4,000, and installation costs are expected to be $6,000. Salvage value ofthe new machine is expected to be zero after a useful life of 4 years. Existing equipment could beretained and used for an additional 4 years if the new machine is not purchased. At that time, thesalvage value of the equipment would be zero. If the new machine is purchased now, the existingmachine would be scrapped. Zhang’s accountant, Victor Wang, has accumulated the following dataregarding annual sales and expenses with and without the new machine.Without the new machine, Zhang can sell 10,000 units of product annually at a per unit selling price of$100. If the new unit is purchased, the number of units produced and sold would increase by 25%, andthe selling price would remain the same.The new machine is faster than the old machine, and it is more efficient in its usage of materials.…
Please DO NOT USE EXCEL TO SOLVE A land development company is considering the purchase of earth moving equipment. The equipment will have a first cost of $190,000 and a salvage value of $70,000 when the company sells it in 10 years. A service contract for maintenance on the equipment will cost $40,0000 per year. The operating cost is expected to be $260 per day. Alternatively, the company can rent the necessary equipment for $1100 per day and hire a driver for $180 per day. If the company's MARR is 10% per year how many days per year must the company need the equipment in order to justify its purchase?
On January 1,2019, Flora Inc. purchased natural resources for P36,000,000. The company expects the resources to produce 1,200,000 units of products. How much is the depletion expense for 2020 if the company mined and sold 260,000 units? O P8,400,000 OP8,000,000 O P7,800,000 O P8,200,000
Riles Truckers, Inc. acquired a heavy road transporter on January 1, 2014 at a cost of P10 million. The estimated useful life is 10 years. On January 1, 2020, the power train requires replacement, as further maintenance is uneconomical due to the off-road time required. The remainder of the vehicle is perfectly roadworthy and is expected to last for the next four years. The cost of the new power train is P4.5 million. 1. Assuming that the original cost of the power train is P3 million, the total depreciation expense in 2020 is 2. Assuming that the original cost of the power train is not separately identifiable and the appropriate discount rate is 5% (the present value of 1 at 5% for 6 years is 0.7462), the total depreciation expense in 2020 is ?