The General Hospital is evaluating new office equipment offered by three companies. Cost Annual benefit End of useful life salvage value Useful life (yrs) Company A $500 $130 $0 Select one: 14.0 9.0 19.0 24.0 5 Company B $600 $115 $250 5 Company C $700 $100 $180 12 The incremental rate of return between Company B and Company C is close to (%)
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- The Parkview Hospital is considering the purchase of a new autoclave. This equipment will cost $150,000. This asset will be depreciated using an MACRS (GDS) recovery period of three years. Use this information to solve, The BV at the end of the second year is (a) $27,771 (b) $41,667 (c) $116,675 (d) $33,325The Parkview Hospital is considering the purchase of a new autoclave. This equipment will cost $150,000. This asset will be depreciated using an MACRS (GDS) recovery period of three years. Use this information to solve, If the autoclave is sold during the third year of ownership, the allowable depreciation charge for the third year is (a) $25,000 (b) $33,338 (c) $22,215(d) $11,108.The Outpatient clinic of eastside Hospital acquired X – ray equipment for 79,000 with an expected useful life of 5 year and a 4000 expected residual value Sum of year digits method was used. The equipment was sold at the end of the fourth year for 12,000 cash Required Compute the gain or loss on the sale. Show the journal entries for the transaction in requirement #1 Repeat 2a assuming that the cash price was 7,000 instead of 12,000 ( use Straight line method )
- For each of the following items, enter the correct letter to show whether the expenditure should becapitalized (C) or expensed (E).Transactions1. Purchased a machine, $70,000; gave long-term note.2. Paid $600 for ordinary repairs.3. Purchased a patent, $45,300 cash.4. Paid cash, $200,000, for addition to old building.5. Paid $20,000 for monthly salaries.6. Paid $250 for routine maintenance.7. Paid $16,000 for extraordinary repairs.Mix ‘Em Up engages in research to develop cures for famous diseases. Costs incurred during development of one such project are as shown below: Researchers’ wages $10,000 Materials used in research 5,000 Machinery used in research 700 Registration of product discovered 1,950 Attorney’s fees for registration 3,000 Record the journal entry for these items. Assume we credit Cash. 8-9a. Disposal of asset. Sellem, Inc. is disposing of office furniture it has had for 2 ½ years. The cost of the furniture was $10,000, and Sellem estimated the salvage to be $2,000. A four-year life was expected. Journalize the sale of the machine for $7,500.community hospital in a rual community operates the ambulance service. the hospital purchases a new ambulance for $150,000. they estimate a useful life of 10 years and a salvage value of $20,000. what is the annual charge for depreciation on this asset?
- Civil Engineering The first cost of an electric rebar bender is P364,000 and a salvage value of P45,000 at the end of its life for 5 years. Money is worth 5.9% annually. If there is no salvage value and the annual maintenance cost is P16,000, find the annual cost of perpetual service. Express your answer in whole number. Not use excelMINA CONSTRUCTION has used the cost-to-cost percentage of completion method to recognize revenue. Recently, their office was struck by fire. In trying to reconstruct all records of the company, the accountant was able to find the following information regarding a recently completed building project for which the total contract was P4,000,000. 2020 2021 2022 Gross profit (loss) each year 80,000 280,000 (40,000) Cost incurred each year 720,000 ? 1,640,000 MINA, the owner of the company, would like to find out the answers to the following questions in relation to the above data: 1. How much cost was incurred in 2021? A. 3,680,000 B. 1,640,000 C. 2,360,000 D. 1,320,000 2. What was the percentage of completion by the end of 2021? A. 90% B. 40% C. 51% D. 60% 3. What was the estimated cost to complete the project at the end of 2021? A. 3,400,000 B. 1,320,000 C. 2,040,000 D. 1,360,000The LJB Company must replace a freezer and is trying to decide betweenthe following two alternatives:Item Freezer A Freezer BInvestment required ($29,000) ($25,000)Annual electrical bill (3,000) (4,000)Salvage value 6,000 5,000Project life in years 11 11The LJB Company’s cost of capital is 8 percent.Which investment provides LJB with the lowest total cost?
- What would be the total fire insurance premium for Best Hardware if their $685,000 building belongs in structural classification B? The contents are worth $840,250 and they received an area rating of 4. The rates per $100 are found in Table 19-4. (Round your answer to the nearest cent.) a. $12,071.40 b. $12,180.08 c. $14,434.18 d. $14,698.10The Bursar, College of Humanities and Social Sciences has established that the rate at which maintenance costs for the School of Business van at Mombasa campus are incurred can be described by the function: r(t) = 600 + 3t2 Where r(t) is stated in thousands of shillings per year and t equals time in years. Required (i) Determine the rate of expenditure after 6 years. (ii) Determine the total maintenance cost in its first 5.2 years.St. Johns Medical Center (SJMC) has five medical technicians who are responsible for conducting cardiac catheterization testing in SJMCs Cath Lab. Each technician is paid a salary of 36,000 and is capable of conducting 1,000 procedures per year. The cardiac catheterization equipment is one year old and was purchased for 250,000. It is expected to last five years. The equipments capacity is 25,000 procedures over its life. Depreciation is computed on a straight-line basis, with no salvage value expected. The reading of the catheterization results is conducted by an outside physician whose fee is 120 per test. The technicians report with the outside physicians note of results is sent to the referring physician. In addition to the salaries and equipment, SJMC spends 50,000 for supplies and other costs needed to operate the equipment (assuming 5,000 procedures are conducted). When SJMC purchased the equipment, it fully expected to perform 5,000 procedures per year. In fact, during its first year of operation, 5,000 procedures were run. However, a larger hospital has established a clinic in the city and will siphon off some of SJMCs business. During the coming years, SJMC expects to run only 4,200 cath procedures yearly. SJMC has been charging 850 for the procedureenough to cover the direct costs of the procedure plus an assignment of general overhead (e.g., depreciation on the hospital building, lighting and heating, and janitorial services). At the beginning of the second year, an HMO from a neighboring community approached SJMC and offered to send its clients to SJMC for cardiac catheterization provided that the charge per procedure would be 550. The HMO estimates that it can provide about 500 patients per year. The HMO has indicated that the arrangement is temporaryfor one year only. The HMO expects to have its own testing capabilities within one year. Required: 1. Classify the resources associated with the cardiac catheterization activity into one of the following: (1) committed resources, or (2) flexible resources. 2. Calculate the activity rate for the cardiac catheterization activity. Break the activity rate into fixed and variable components. Now, classify each activity resource as relevant or irrelevant with respect to the following alternatives: (1) accept the HMO offer, or (2) reject the HMO offer. Explain your reasoning. 3. Assume that SJMC will accept the HMO offer if it reduces the hospitals operating costs. Should the HMO offer be accepted? 4. Jerold Bosserman, SJMCs hospital controller, argued against accepting the HMOs offer. Instead, he argued that the hospital should be increasing the charge per procedure rather than accepting business that doesnt even cover full costs. He also was concerned about local physician reaction if word got out that the HMO was receiving procedures for 550. Discuss the merits of Jerolds position. Include in your discussion an assessment of the price increase that would be needed if the objective is to maintain total revenues from cardiac catheterizations experienced in the first year of operation. 5. Chandra Denton, SJMCs administrator, has been informed that one of the Cath Lab technicians is leaving for an opportunity at a larger hospital. She met with the other technicians, and they agreed to increase their hours to pick up the slack so that SJMC wont need to hire another technician. By working a couple hours extra every week, each remaining technician can perform 1,050 procedures per year. They agreed to do this for an increase in salary of 2,000 per year. How does this outcome affect the analysis of the HMO offer? 6. Assuming that SJMC wants to bring in the same revenues earned in the cardiac catheterization activitys first year less the reduction in resource spending attributable to using only four technicians, how much must SJMC charge for a procedure?
