On January 1, 2016, Jacob Inc. purchased a commercial truck for $48,000 and uses the straight-line depreciation method. The truck has a useful life of eight years and an estimated residual value of $8,000. On December 31, 2017, Jacob Inc. sold the truck for $43,000. What amount of gain or loss should Jacob Inc. record on December 31, 2017? A. Gain, $22,000.
B. Gain, $5,000.
C. Loss, $3,000.
D. Loss, $18,000.
Answers
Answer:
The correct answer is B: gain $5000
Explanation:
Giving the following information:
On January 1, 2016, = commercial truck for $48,000.
straight-line depreciation method.
useful life of eight years.
residual value of $8,000.
On December 31, 2017, Jacob Inc. sold the truck for $43,000.
Depreciation expense per year= (Purchase value - residual value)/8
Depreciation expense per year= (48000-8000)/8=5000
Accumulated depreciation year 2= 5000*2= 10000
To calculate the gain or loss we need to use the following formula:
Gain/loss= price value - book value
Gain/loss= price value - (purchase price - accumulated depreciation)
Gain/loss= 43000 - (48000- 10000)= 5000 gain
Related Questions
Skyline Florists uses an activity-based costing system to compute the cost of making floral bouquets and delivering the bouquets to its commercial customers. Company personnel who earn $180,000 typically perform both tasks; other firm-wide overhead is expected to total $70,000. These costs are allocated as follows:Bouquet Production Delivery Other Wages and salaries 60% 30% 10%Other overhead 50% 35% 15%Riverside anticipates making 20,000 bouquets and 4,000 deliveries in the upcoming year. The cost of wages and salaries and other overhead that would be charged to each bouquet made is closest to:a. $12.50.b. $7.15.c. some other amount.d. $8.75.e. $13.75.
What is the discount yield, bond equivalent yield, and effective annual return on a $2 million commercial paper issue that currently sells at 98.25 percent of its face value and is 128 days from maturity? (Use 360 days for discount yield and 365 days in a year for bond equivalent yield and effective annual return. Do not round intermediate calculations. Round your answers to 3 decimal places. (e.g., 32.161))
Jay's lease payments are made at the end of each period. Jay's liability for a capital lease would be reduced periodically by theA. Minimum lease payment less the portion of the minimum lease payment allocable to interest.B. Minimum lease payment plus the amortization of the related asset.C. Minimum lease payment less the amortization of the related asset.D. Minimum lease payment.
The Moto Hotel opened for business on May 1, 2017. Here is its trial balance before adjustment on May 31. MOTO HOTEL Trial Balance May 31, 2017 Debit Credit Cash $2,523 Supplies 2,600 Prepaid Insurance 1,800Land 15,023 Buildings 67,600 Equipment 16,800 Accounts Payable $4,723Unearned Rent Revenue 3,300 Mortgage Payable 33,600 Common Stock 60,023 Rent Revenue 9,000 Salaries and Wages Expense 3,000 Utilities Expense 800 Advertising Expense 500 $110,646 $110,646 Other data: 1. Insurance expires at the rate of $450 per month. 2. A count of supplies shows $1,140 of unused supplies on May 31. 3. (a) Annual depreciation is $2,880 on the building. (b) Annual depreciation is $2,280 on equipment. 4. The mortgage interest rate is 6%. (The mortgage was taken out on May 1.) 5. Unearned rent of $2,510 has been earned. 6. Salaries of $880 are accrued and unpaid at May 31.Required:Journalize the adjusting entries on May 31.
Answers
Answer:
32.5%
Explanation:
multi-factor productivity = total output / (labor + materials + overhead costs)
old multi-factor productivity = $547,904 / ($240 + $259,276 + $0) = 2.111
new multi-factor productivity = $547,904 / ($210 + $195,680 + $0) = 2.797
the percentage change in multi-factor productivity = [(2.797 - 2.111) / 2.111] x 100 = 32.5%
Answers
Answer:
d. $36
Explanation:
The Contribution margin is the net of selling price and variable cost of a product. It is calculated by deducting the variable cost from the selling price of a product.
Cake Pie Cookies
Current selling price $30 $18 $5
Variable cost $12 $7 $1
Contribution margin $18 $11 $3
Production hours 2 1.5 0.25
Contribution margin/hr. $9 $7.33 $12
Required Contribution margin per hour of cake = $12
Required Contribution margin = $12 x 2 = $24
Required Selling Price = Contribution margin + variable cost = $24 + $12 = $36
Note there is a mistake in the calculation of Contribution margin of Cookies as it is given $3 but after deducting the variable cost from selling price is should be $4 ( $5 - $1 ), I used the given contribution margin for the calculation.
Answers
Answer:
Current intrinsic value - equity = $1155.56
Explanation:
FCFE or Free cashflow to equity is the free cash flow attributable to the equity holders. Using the constant growth model of FCFE we can calculate the intrinsic value of the equity or intrinsic value per share. The formula for the constant growth model is as follows,
Value of equity = FCFE0 * (1+g) / (r - g)
Where,
- FCFE0 is the most recent FCFE
- g is the growth rate in FCFE
- r is the required rate of return on equity
Current intrinsic value - equity = 100 * (1+0.04) / (0.13 - 0.04)
Current intrinsic value - equity = $1155.56
Answers
Answer:
Option (a) is correct.
Explanation:
Contribution margin per marketing plan = Sales - Variable cost
= $3,000 - $2,000
= $1,000
A.
(1)
Break even in marketing plan = 400
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 400 × 3,000
= 1,200,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 1,200,000
= 300,000
= 20%
B.
(1) Contribution margin per marketing plan = Sales - Variable cost
= $4,000 - $2,000
= $2,000
Break even in marketing plan = 200
(2) Break-even in dollars:
= Break-even in marketing plan × Average rate per plan
= 200 × 4,000
= 800,000
(3) Margin of safety = Actual sales - Break-even sales in dollars
= 1,500,000 - 800,000
= 700,000
= 47%
Therefore, option (a) would achieve the margin of safety ratio more than 45%.
2. Purchased equipment costing $6,320, paying $4,893 in cash and charging the rest on account.
3. Paid $5,000 in principal and $300 in interest expense on long-term debt.
4. Earned $177,866 in sales revenue; collected $123,949 in cash with the customers owing the rest on their Amazon credit card account.
5. Incurred $25,249 in shipping expenses, all on credit.
6. Paid $118,241 cash on accounts owed to suppliers.
7. Incurred $10,069 in marketing expenses; paid cash.
8. Collected $38,200 in cash from customers paying on their Amazon credit card account.
9. Borrowed $16,231 in cash as long-term debt.
10. Used inventory costing $111,934 when sold to customers.
11. Paid $830 in income tax recorded as an expense in the prior year.
Required:
For each of the transactions, complete the tabulation, indicating the effect (positive value for increase, negative value for decrease, and leave blank if no effect) of each transaction.
Answers
Final answer:
This question is a test of understanding accounting principles and how various transactions impact a business's accounts. The student is required to analyze several transactions for Amazon.com, Inc., determining for each one how it affects the company's assets, liabilities, equity, revenue, and expenses.
Explanation:
To respond to this question will require understanding of accounting and financial transactions and the resulting impacts on business accounts, in this case, Amazon.com, Inc. For example, when Amazon issued stock for $623 cash, this increased cash (an asset) by $623 million and equity by the same amount. Buying equipment costing $6320 while paying $4893 in cash and charging the rest on the account reduced cash by $4893 and increased both equipment (another asset) by $6320 and accounts payable (a liability) by $1427 million ($6320 - $4893). Similarly, you can analyze other transactions: principal and interest payments on debt reduce cash and long-term debt or interest expense; generating sales revenue increases revenue and accounts receivable or cash; incurring expenses (e.g., shipping, marketing) increases expense and accounts payable or decreases cash; borrowing cash increases both cash and long-term debt, etc. Understanding the transactions in this way is central to the accounting process, which creates the financial statements that give stakeholders important information about a business's financial health.
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Answers
Answer:
Audit is an independent examination of records,financial statements or process in order to give report to the party that has commissioned the audit
Explanation:
Audit can be of the three types highlighted in the question.
Audit of financial statements involves an external auditor examining the financial statements of clients i.e the income statement,statement of financial position.the cash flow statement as well statement of changes in equity e.t.c with a view to expressing an opinion on whether the financial statements show a true and fair view of the performance of the organisation audited and sometimes whether they were prepared in line with generally accepted accounting standards such as US GAAP.
Compliance audit is simply to find out whether the person audited has conformed with certain laid down policies and procedures such as the policies to follow in granting credit facilities to bank customers.
Process audit is about examining a process to see if the steps taken by the person carrying the tasks are logical and to find out areas for improvement in order to cut down time and resources used.