Financial Accounting-w/cd-package
3rd Edition
ISBN: 9780131060876
Author: REIMERS
Publisher: PEARSON
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Chapter 3, Problem 47EB
1.
To determine
Calculate the amount of
2.
To determine
Calculate the book value of truck for each year.
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This question is based on the following information: Trinity Company bought a copying machine costing P 123,000 with an estimated life of 3 years with negligible salvage value. The estimated earnings after taxes of this machine at the end of each year are estimated below: Earnings after taxes End of year 1 P 8,120 2 7,200 3 6,820 The company is using the straight line method for computing the depreciation. What is the accounting rate of return on the average cost of investment? a. 10.5% b. 11.5% c. 12% d. 15%
Jersey Corporation, which has a calendar year accounting period, purchased a machine for $400,000 on April 1, 2016. At that time Jersey expected to use the machine for nine years and then sell it for $4,000. The machine was sold for $22,000 on Sept. 30, 2021. Assuming straight-line depreciation, calculate the gain(/(loss) at the sale of the machine.
Sandhill Ltd. purchased a delivery truck on January 1, 2021, at a cost of $80,640. The truck is expected to have a residual value of $7,380 at the end of its 4-year useful life. Sandhill has a December 31 year end. Use the diminishing-balance method and assume the depreciation rate is equal to double the straight-line rate
Calculate the depreciation for each year of the truck’s life. (Round answers to 0 decimal places, e.g. 5,275.)
Depreciation expense
2021
$enter a dollar amount
2022
$enter a dollar amount
2023
$enter a dollar amount
2024
$enter a dollar amount
Chapter 3 Solutions
Financial Accounting-w/cd-package
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