The cost of a new machine is $40,000 and the new machine takes $2,000 to install. At the end of its useful life, its salvage value is $5,000. Under the modified accelerated cost recovery system (MACRS), what is the depreciable value of the new machine? a $35,000 b $37,000 c $42,000 d $40,000
Q: The following are the trial balance and the other information related to Bruce Marigold, who…
A: Journal entries refer to the recording of transactions in an appropriate way. With the help of…
Q: This year, Paula and Simon (married filing jointly) estimate that their tax liability will be…
A: Not all underpaying taxpayers face a penalty payment, which may be waived under several scenarios,…
Q: Use the balance sheet and income statement below: Assets Current assets: Cash and marketable…
A: Cash flow statement is a statement that records the inflow or outflow of cash in the operations of…
Q: 8. What is the after-tax return to a corporation that buys a share of preferred stock at $45, sells…
A: An alternative form of equity is preferred stock, which signifies ownership of a business and the…
Q: Each of the four independent situations below describes a finance lease in which annual lease…
A: A lease is defined as a contractual agreement incorporated between two business entities where one…
Q: Whitley Construction Company is in the home remodeling business. Whitley has three teams of highly…
A: Underapplied Overheads: When the actual manufacturing overhead costs spent during a period exceed…
Q: Dave and his friend Stewart each owns 50 percent of KBS. During the year, Dave received $96,000…
A: The current FICA tax rate is 7.65% (i.e. social security tax rate of 6.2% and medicare tax rate of…
Q: purchas for use in business during she purchased during the year, and her business was extremely…
A: Depreciation refers to the type of operating expenses that occur due to a decrease in the value of…
Q: Wildhorse Company is constructing a building. Construction began on February 1 and was completed on…
A: The average interest rate applied to a group of loans or other debt instruments is called the…
Q: Dividing partnership income Dahl and Westhoff have decided to form a partnership. They have agreed…
A: As per the Honor code of Bartleby we are bound to give the answer of the first three sub parts only,…
Q: The total assets and liabilities of Oriole Company at January 1 and December 31, 2020 are presented…
A: Net income is the amount of money earned by the entity. It is determined by the entity after…
Q: esc Wildhorse Inc. had a bad year in 2021. For the first time in its history, it operated at a loss.…
A: Break-even point (BEP) can be referred to as that point of sales where the entity is able to recover…
Q: 3. Marzoni’s records show raw materials inventory had a beginning balance of $200 and an ending…
A: Raw material means the main item of input from which the finished goods has been produced. Raw…
Q: Davis has the following obligations at December 31, 2025: Note payable due in monthly installments…
A: Current liabilities are the obligations which a company tends to settle within it's normal operating…
Q: Whispering Winds Corp. had net credit sales during the year of $1309750 and cost of goods sold of…
A: Accounts receivable turnover is the measure that helps the entity to know its efficiency in…
Q: What does a third-party user of financial statements have to prove under common law in a suit…
A: An Audit is an independent examination of financial information of any entity whether profit…
Q: Costs per Equivalent Unit The following information concerns production in the Baking Department for…
A: The process costing is followed when a company manufactures the homogeneous products in bulk. It is…
Q: The plant assets section of the comparative balance sheets of Anders Company is reported below.…
A: Depreciation expense is reduction in the value of assets due to its use, wear or tear.Equipment are…
Q: Year 1 total cash dividends Year 2 total cash dividends Year 3 total cash dividends Year 4 total…
A: Lets understand the basics.Preference shares based on cumulation gets divided into cumulative and…
Q: In 2020, Teal Mountain Fort Corporation had net sales of $510,000 and cost of goods sold of…
A: Income statement is a financial statement that shows profitability, total revenue and total expenses…
Q: E3-10 (Algo) Preparing an Income Statement LO3-5 Stacey's Plano Rebuilding Company has been…
A: Income Statement is a financial statement that includes revenue earned and expenses incurred during…
Q: Actuary and trustee reports indicate the following changes in the PBO and plan assets of Mahomes…
A: fdf fdfd gfg fg
Q: Cheyenne Access Services Inc. leases access to high-speed computers to small businesses. It provides…
A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost…
Q: Europa Company manufactures only one product. Presented below is direct labor information for…
A: The variance is calculated as the difference between the standard and actual cost data. The variance…
Q: Fickel Company has two manufacturing departments-Assembly and Testing & Packaging. The predetermined…
A: Manufacturing cost encompasses all the expenditures that occur during the process of producing goods…
Q: Tamarisk Company estimates that unit sales will be 10,200 in quarter 1; 12,600 in quarter 2; 14,600…
A: Production budget is the statement which is prepared by the entity for the purpose of determining…
Q: 1. 2. 3. 4. Prepare a tabular analysis that shows the effects of these transactions on the expanded…
A: The accounting equation is a mathematical representation of financial transactions. The accounting…
Q: Required information SB (Algo) Calculating Equivalent Units, Cost per Equivalent Unit, Reconciling…
A: Process Costing is a determination of cost for each process. It is mainly used in a manufacturing…
Q: e following transactions occurred during the month of June 2024 for the Stridewell Corporation. The…
A: Common Stock -A share of ownership in a firm that is designated as common stock may be associated…
Q: a. Record Navis, Incorporated's sales for a month at $75,000. The items sold cost $62,500. Navis…
A: The following rules are used to prepare the journal entries:For real accounts ( Such as Cash) Debit…
Q: For the month of May, the balance in Acme Company's raw materials inventory account was $20,500 at…
A: Direct material used is the amount of material used directly in the manufacturing of product during…
Q: January 1,100 May February 950 June March April 900 July 1,400 Ace always keeps an ending inventory…
A: The formula used to determine the units produced is as follows:Units to be produced = Expected Sales…
Q: llowing table gives abbreviated balance sheets and income statements for Walmart. At the end of…
A: Return on Capital -The effectiveness with which a business converts capital (such as debt or stock)…
Q: Please help with 2A and 2B. I can't seem to figure those out. The other parts of the question I…
A: Degree of operating leverage is calculated with the help of following formula Degree of operating…
Q: Fair Value $34,650 57,960 98,560 Jightline Co. 39,200 or the year ending December 31, 20Y5, O'Brien…
A: Concept: Comparative Balance SheetComparative Balance Sheet is a financial statement that represents…
Q: ex Corporation reports the following components of stockholders' equity at December 31 of the prior…
A: Retained Earnings -After deducting dividends and other distributions to investors, retained…
Q: Tex Hardware sells many of its products overseas. The following are some selected transactions. 1.…
A: A journal entry is a recording of a financial transaction in a company's accounting system. It is…
Q: AU.S. company owns an 80. s interest in a company located on Mars, Martian currency is called the…
A: All foreign currency transaction should be recognize using the rate on the date of transaction,…
Q: Rios Co. is a regional insurance company that began operations on January 1, 20Y2. The following…
A: Answer:- Journal entries:- Any transaction related to the business is primarily recorded in the…
Q: The Distance Plus partnership has the following capital balances at the beginning of the current…
A: The partnership is a business form in which two or more individuals come together to operate and…
Q: The business determines that the interest expense on a note payable for the period ending December…
A: Journal Entry is the primary step in recording the transactions in the books of accounts.The…
Q: On December 31, 2020, Corotel Company's year-end, the unadjusted trial balance included the…
A: There is always a risk of uncollectibility when goods are sold on credit without any security.The…
Q: Mighty Muffler, Incorporated, operates an automobile service facility that specializes in replacing…
A: Variable cost is the cost that changes with change in the activity of cost driver used. The variable…
Q: Required information [The following information applies to the questions displayed below.] The…
A: The sales-value-at-split-off technique allocates joint costs in accordance with each product's…
Q: Rick Hall owns a card shop, Hall's Cards. The following cash information is available for the month…
A: Bank Reconciliation Statement :— It is a statement that reconcile balance as per bank statement with…
Q: a. Prepare a variable costing income statement for The Walt Disney Company by segment. If required,…
A: An income statement is a financial statement that shows an organization's profitability over time by…
Q: The least problems encountered when comparing the financial statemen when the firms: Multiple Choice…
A: Are in different lines of business:When firms are in different lines of business, they operate in…
Q: Last month when Holiday Creations, Incorporated, sold 40,000 units, total sales were $160,000, total…
A: The objective of the question is to calculate the contribution margin ratio for Holiday Creations,…
Q: quarrying pany's profits, coupled with a conservative dividend policy, resulted in funds available…
A: Unrealized Gain -An asset's increased worth without a sale is known as an unrealized gain. It's…
Q: The balance sheet for Pina Colada Consulting reports the following information on July 1, 2022.…
A: BOND PAYABLE Bond is a Financial Security which is Generally Issued by the Corporations, Government…
The cost of a new machine is $40,000 and the new machine takes $2,000 to install. At the end of its useful life, its salvage value is $5,000. Under the modified accelerated cost recovery system (MACRS), what is the
a $35,000
b $37,000
c $42,000
d $40,000
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. With DEPREC5 still on the screen, click the Chart sheet tab. This chart shows the accumulated depreciation under all three depreciation methods. Identify below the depreciation method that each represents. Series 1 _____________________ Series 2 _____________________ Series 3 _____________________ When the assignment is complete, close the file without saving it again. Worksheet. The problem thus far has assumed that assets are depreciated a full year in the year acquired. Normally, depreciation begins in the month acquired. For example, an asset acquired at the beginning of April is depreciated for only nine months in the year of acquisition. Modify the DEPREC2 worksheet to include the month of acquisition as an additional item of input. To demonstrate proper handling of this factor on the depreciation schedule, modify the formulas for the first two years. Some of the formulas may not actually need to be revised. Do not modify the formulas for Years 3 through 8 and ignore the numbers shown in those years. Some will be incorrect as will be some of the totals. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as DEPRECT. Hint: Insert the month in row 6 of the Data Section specifying the month by a number (e.g., April is the fourth month of the year). Redo the formulas for Years 1 and 2. For the units of production method, assume no change in the estimated hours for both years. Chart. Using the DEPREC5 file, prepare a line chart or XY chart that plots annual depreciation expense under all three depreciation methods. No Chart Data Table is needed; use the range B29 to E36 on the worksheet as a basis for preparing the chart if you prepare an XY chart. Use C29 to E36 if you prepare a line chart. Enter your name somewhere on the chart. Save the file again as DEPREC5. Print the chart.St. Johns River Shipyards welding machine is 15 years old, fully depreciated, and has no salvage value. However, even though it is old, it is still functional as originally designed and can be used for quite a while longer. A new welder will cost 182,500 and have an estimated life of 8 years with no salvage value. The new welder will be much more efficient, however, and this enhanced efficiency will increase earnings before depreciation from 27,000 to 74,000 per year. The new machine will be depreciated over its 5-year MACRS recovery period, so the applicable depreciation rates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. The applicable corporate tax rate is 25%, and the project cost of capital is 12%. What is the NPV if the firm replaces the old welder with the new one?Montello Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for 120,000 miles. Montello uses the units-of-production depreciation method and in year one it expects to use the truck for 23,000 miles. Calculate the annual depreciation expense.
- Dunedin Drilling Company recently acquired a new machine at a cost of 350,000. The machine has an estimated useful life of four years or 100,000 hours, and a salvage value of 30,000. This machine will be used 30,000 hours during Year 1, 20,000 hours in Year 2, 40,000 hours in Year 3, and 10,000 hours in Year 4. Dunedin buys equipment frequently and wants to print a depreciation schedule for each assets life. Review the worksheet called DEPREC that follows these requirements. Since some assets acquired are depreciated by straight-line, others by units of production, and others by double-declining balance, DEPREC shows all three methods. You are to use this worksheet to prepare depreciation schedules for the new machine.Urquhart Global purchases a building to house its administrative offices for $500,000. The best estimate of the salvage value at the time of purchase was $45,000, and it is expected to be used for forty years. Urquhart uses the straight-line depreciation method for all buildings. After ten years of recording depreciation, Urquhart determines that the building will be useful for a total of fifty years instead of forty. Calculate annual depreciation expense for the first ten years. Determine the depreciation expense for the final forty years of the assets life, and create the journal entry for year eleven.Colquhoun International purchases a warehouse for $300,000. The best estimate of the salvage value at the time of purchase was $15,000, and it is expected to be used for twenty-five years. Colquhoun uses the straight-line depreciation method for all warehouse buildings. After four years of recording depreciation, Colquhoun determines that the warehouse will be useful for only another fifteen years. Calculate annual depreciation expense for the first four years. Determine the depreciation expense for the final fifteen years of the assets life, and create the journal entry for year five.
- Utica Machinery Company purchases an asset for 1,200,000. After the machine has been used for 25,000 hours, the company expects to sell the asset for 150,000. What is the depreciation rate per hour based on activity?Montezuma Inc. purchases a delivery truck for $20,000. The truck has a salvage value of $8,000 and is expected to be driven for ten years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After five years of recording depreciation, Montezuma determines that the delivery truck will be useful for another five years (ten years in total, as originally expected) and that the salvage value will increase to $10,000. Determine the depreciation expense for the final five years of the assets life, and create the journal entry for years 6–10 (the entry will be the same for each of the five years).Montezuma Inc. purchases a delivery truck for $15,000. The truck has a salvage value of $3,000 and is expected to be driven for eight years. Montezuma uses the straight-line depreciation method. Calculate the annual depreciation expense. After three years of recording depreciation, Montezuma determines that the delivery truck will only be useful for another three years and that the salvage value will increase to $4,000. Determine the depreciation expense for the final three years of the assets life, and create the journal entry for year four.
- Newmarge Products Inc. is evaluating a new design for one of its manufacturing processes. The new design will eliminate the production of a toxic solid residue. The initial cost of the system is estimated at 860,000 and includes computerized equipment, software, and installation. There is no expected salvage value. The new system has a useful life of 8 years and is projected to produce cash operating savings of 225,000 per year over the old system (reducing labor costs and costs of processing and disposing of toxic waste). The cost of capital is 16%. Required: 1. Compute the NPV of the new system. 2. One year after implementation, the internal audit staff noted the following about the new system: (1) the cost of acquiring the system was 60,000 more than expected due to higher installation costs, and (2) the annual cost savings were 20,000 less than expected because more labor cost was needed than anticipated. Using the changes in expected costs and benefits, compute the NPV as if this information had been available one year ago. Did the company make the right decision? 3. CONCEPTUAL CONNECTION Upon reporting the results mentioned in the postaudit, the marketing manager responded in a memo to the internal audit department indicating that cash inflows also had increased by a net of 60,000 per year because of increased purchases by environmentally sensitive customers. Describe the effect that this has on the analysis in Requirement 2. 4. CONCEPTUAL CONNECTION Why is a postaudit beneficial to a firm?Grandorf Company replaced the engine in a truck for 8,000 and expects the new engine will extend the life of the truck two years beyond the original estimated life. Related information is provided below. Cost of truck 65,000 Salvage value 5,000 Original estimated life 6 years The truck was purchased on January 1, 20-1. The engine was replaced on January 1, 20-6. Using straight-line depreciation, compute depreciation expense for 20-6.Filkins Fabric Company is considering the replacement of its old, fully depreciated knitting machine. Two new models are available: Machine 190-3, which has a cost of $190,000, a 3-year expected life, and after-tax cash flows (labor savings and depreciation) of $87,000 per year; and Machine 360-6, which has a cost of $360,000, a 6-year life, and after-tax cash flows of $98,300 per year. Knitting machine prices are not expected to rise because inflation will be offset by cheaper components (microprocessors) used in the machines. Assume that Filkins’ cost of capital is 14%. Should the firm replace its old knitting machine? If so, which new machine should it use? By how much would the value of the company increase if it accepted the better machine? What is the equivalent annual annuity for each machine?