Question 13 45 XYZ Ltd operate two production lines. One was installed in April 2017 at a cost of €200,000. The other was Installed in February 2019 at a cost of €340,000. They charge depreciation using the straight-line method at a rate of 15% pa for an estimated useful economic life of 5 years, charging a full year in the year of acquisition. As at the year ended 31 Dec 2020, the production manager has filed a report noting that the residual value of the production lines is now expected to be only 5% of original cost. The Directors want to reflect this change in the accounts for the year ending 31 Dec 2020. What should be the depreciation charge for the year? (132,200 (140,200 Oa79,000 C185,000

Question 13 45 XYZ Ltd operate two production lines. One was installed in April 2017 at a cost of €200,000. The other was Installed in February 2019 at a cost of €340,000. They charge depreciation using the straight-line method at a rate of 15% pa for an estimated useful economic life of 5 years, charging a full year in the year of acquisition. As at the year ended 31 Dec 2020, the production manager has filed a report noting that the residual value of the production lines is now expected to be only 5% of original cost. The Directors want to reflect this change in the accounts for the year ending 31 Dec 2020. What should be the depreciation charge for the year? (132,200 (140,200 Oa79,000 C185,000

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 10P: REPLACEMENT ANALYSIS The Dauten Toy Corporation currently uses an injection molding machine that was...

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REPLACEMENT ANALYSIS The Dauten Toy Corporation currently uses an injection molding machine that was purchased 2 years ago. This machine is being depreciated on a straight-line basis, and it has 6 years of remaining life. Its current book value is 2,100, and it can be sold for 2,500 at this time. Thus, the annual depreciation expense is 2,100/6 = 350 per year. If the old machine is not replaced, it can be sold for 500 at the end of its useful life. Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6 years, and an estimated salvage value of 800. This machine falls into the MACRS 5-year class so the applicable depreciation rates are 20%, 32%, 19%, 12%, 11%, and 6%. The replacement machine would permit an output expansion, so sales would rise by 1,000 per year; even so, the new machines much greater efficiency would cause operating expenses to decline by 1,500 per year. The new machine would require that inventories be increased by 2,000, but accounts payable would simultaneously increase by 500. Dautens marginal federal-plus-state tax rate is 40%, and its WACC is 15%. Should it replace the old machine?
Question 2 (Marks: 10) On 31 August 2018, Musk Traders purchased a machine on credit for a cost price of R402 500 (including VAT at 15%). Machinery is depreciated over six years according to the straight‐line basis and there is no residual value on this machine, as it is highly specialised. Musk Traders has a30 June year‐end. Required: Calculate the depreciation and accumulated depreciation for 2019 and 2020. Round to the nearest Rand. Show all your workings
PROBLEM 3 Green Vegetable Mfg. Co. purchased equipment on January 1, 2019, at a cost of $800,000. The equipment is expected to have a service life of ten years, or 40,000 hours, and a residual value of $70,000. During 2019, the equipment was operated for 5,000 hours, and during 2020, it was operated for 7,000 hours. Required: Calculate depreciation expense (to the nearest whole dollar) for this machine in 2019 and 2020 under each of the following depreciation methods: *Straight-line method *Activity method (hours) *Double declining balance method Input only the answer on the Excel Template file. You may work calculations by hand on paper or in Excel. Your choice.
1 pts An asset was acquired on January 1, 2015 for P800,000 and is expected to have a 5-year useful life. The straight-line method was used. On January 1, 2017, the asset was deemed to have a sound value of P720,000. How much is the revaluation surplus for the period ended December 31, 2017?
MN.18. An asset (according to the historical cost model) with a carrying amount as at December 31, X0 of $120,000. This asset is depreciated on a straight-line basis and has a remaining useful life of 3 years. The asset is expected to generate a net cash flow of $30,000 per year for the next 3 years, after which it will be liquidated with a liquidation value of $10,000 with no additional disposal costs. Currently, this property is marketable for $60,000 and $5,000 respectively.Require:1. Determine the asset's value in use at an estimated discount rate of 6%.2. Calculate property loss and record related journal entries (if any).
Problem # 1 (30): Given: On Sep 1, 2017 General Assembly (GA) purchased for $980,000 an ANSONIA 7300 wide-corridor stacking modulator with the expectation that its economic life would be exhausted at 2024 12 31 and that the unit’s salvage value would be $320,000. On 2020 11 01 GA exchanged the equipment for a 4-year, zero-coupon note with a face value of $900,000. GA recognized a loss of $16,100 on the transaction. GA uses SLN for depreciation and prorating for partial periods. Required: Book the 12/31/2020 interest accrual for the note.
Question 6 An equipment was acquired on December 31, 2016 for P5,000,000 and is expected to have a 10-year useful life. The straight-line method was used. On January 1, 2020, the asset was deemed to have a sound value of P4,800,000. On January 1, 2023, the replacement cost of the asset was P3,500,000.   How much should be taken to profit or loss for the period ended December 31, 2023?
Week 10Nevertire Ltd purchased a delivery van costing $52,000. It is expected to have a residual value of$12,000 at the end of its useful life of 4 years or 200,000 kilometres. Ignore GST.Required:a) Assume the van was purchased on 1 July 2019 and that the accounting period ends on 30 June.Calculate the depreciation expense for the year 2019–20 using each of the following depreciationmethods  straight-line diminishing balance (depreciation rate has been calculated as 31%) units of production (assume the van was driven 78,000 kilometres during the financial year)b) Record the adjusting entries for the depreciation at 30 June 2021 using diminishing balancemethod. c) Show how the van would appear in the balance sheet prepared at the end of year 2 using Straight line method.
Exercise 10-24 On December 31, 2020, Vaughn Inc. has a machine with a book value of $1,353,600. The original cost and related accumulated depreciation at this date are as follows. Machine $1,872,000 Less: Accumulated depreciation 518,400 Book value $1,353,600 Depreciation is computed at $86,400 per year on a straight-line basis.Presented below is a set of independent situations. For each independent situation, indicate the journal entry to be made to record the transaction. Make sure that depreciation entries are made to update the book value of the machine prior to its disposal. Your answer is partially correct. Try again. A fire completely destroys the machine on August 31, 2021. An insurance settlement of $619,200 was received for this casualty. Assume the settlement was received immediately. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If…
Question 2 On 31 August 2018, Musk Traders purchased a machine on credit for a cost price of R402 500 (including VAT at 15%). Machinery is depreciated over six years according to the straight‐line basis and there is no residual value on this machine, as it is highly specialised. Musk Traders has a30 June year‐end. Required: Calculate the depreciation and accumulated depreciation for 2019 and 2020. Round to the nearest Rand. Show all your workings
17. Maroon Company’s depreciation policy on machinery and equipment is as follows: A full year’s depreciation is take in the year of an asset’s acquisition No depreciation is take in the year of an asset’s disposition The estimated useful life is five years The straight-line method is used On June 30, 2021, Maroon sold for P230,000 a machine acquired in 2018 for P420,000. The accumulated depreciation was P216,000 at December 31, 2020, and the original estimated salvage value was P60,000. How much was the gain or loss on the disposal should Maroon record in 2021? Group of answer choices 34,000 loss 26,000 loss 26,000 gain 14,000 gain
(M1). Lion Company Limited revalued its land and buildings at the start of the year 2020 to $100m ($30 million for the land). The property cost $50 million ($10 million for the land) ten years prior to the revaluation. The total expected useful life of 50 years is unchanged. The company policy is to make an annual transfer of realized amounts to retained earnings, show the effects of the above on the financial statements for the year