1 $15,750 $26,250 $35,000
2 15,750 21,000 21,000
3 15,750 15,750 12,600
4 15,750 10,500 7,560
5 15,750 5,250 2,590
Total $78,750 $78,750 $78,750
Required:
a. What is the cost of the asset being depreciated?
b. What amount, if any, was used in the depreciation calculations for the salvage value for this asset?
c. Which method will produce the highest charge to income in Year 1?
d. Which method will produce the highest charge to income in Year 4?
e. Which method will produce the highest book value for the asset at the end of Year 3?
f. If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?
Answer:
a. What is the cost of the asset being depreciated?
the cost of the asset = $35,000 / 0.4 = $87,500
b. What amount, if any, was used in the depreciation calculations for the salvage value for this asset?
salvage value = $87,500 - (5 x $15,750) = $8,750
c. Which method will produce the highest charge to income in Year 1?
double declining results in the highest depreciation expense
d. Which method will produce the highest charge to income in Year 4?
straight line results in the highest depreciation expense
e. Which method will produce the highest book value for the asset at the end of Year 3?
straight line, book value = $87,500 - (3 x $15,750) = $40,250
f. If the asset is sold at the end of Year 3, which method would yield the highest gain (or lowest loss) on disposal of the asset?
double declining balance, since the carrying value is lowest = $87,500 - $35,000 - $21,000 - $12,600 = $18,900
e.g. if the assets is sold at $30,000, the gain = $11,100
under straight line method a $30,000 resale price would result in a loss(= $30,000 - $40,250 = -$10,250), while sum of years' digit would result in a gain = $30,000 - ($87,500 - $26,250 - $21,000 - $15,750) = $5,500
Employees – 29 40 31
Transactions 38,000 – 19,000 76,000
Department direct costs $ 350,000 $ 147,000 $ 950,000 $ 3,750,000
Allocate the cost of the service departments to the operating departments using the direct method.
Answer:
Administration Cost Allocated To Domestic is $197,183.
Administration Cost Allocated To International is $152,817.
Accounting Cost Allocated To Domestic is $29,400.
Accounting Cost Allocated To International is $117,600.
Explanation:
The Direct Method used for allocating Services Departments Cost to Operating Departments ignores the services used by service departments and allocate costs just to operating departments based on each department's consumption of allocation base. So, the costs of Administration and Accounting departments will be allocated to Domestic and International Departments.
Allocation of Administration Department Cost:
Domestic
Direct Cost of Administration * (No. of Employees in Domestic / Total No. of Employee in Operating Departments)
⇒ 350,000 * (40 / 71) = $197,183.
International
Administration Cost Allocated = 350,000 * (31 / 71) = $152,817.
Allocation of Accounting Department Cost:
Domestic
Direct Cost of Accounting * (No. of Transactions in Domestic / Total No. of Transactions in Operating Departments)
⇒ 147,000 * (19,000 / 95,000) = $29,400.
International
Accounting Cost Allocated = 147,000 * (76,000 / 95,000) = $117,600.
b. On a cold day, both demand for ice cream and the supply of ice cream decrease.
c. When Hawaii's Mt. Kilauea erupts violently, the demand on the part of tourists for sightseeing flights increases but the supply of pilots willing to provide these dangerous flights decreases.
d. In a hot area of Arizona where they generate a lot of their electricity with wind turbines, the demand for electricity falls on windy days as people switch off their air conditioners and enjoy the breeze. But at the same time, the amount of electricity supplied increases as the wind turbines spin faster.
Explanation:
Classifying of each situation with the correct combination of change in price and quantity:
a. On a hot day, both demand for lemonade and supply of lemonade increase - Pp? Q increase
b. On a cold day, both demand for ice cream and the supply of ice cream decrease - Pp? Q decrease
c. When Hawaii's Mt. Kilauea erupts violently, the demand on the part of tourists for sightseeing flights increases but the supply of pilots willing to provide these dangerous flights decreases- P increase Qq?
d. In a hot area of Arizona where they generate a lot of their electricity with wind turbines, the demand for electricity falls on windy days as people switch off their air conditioners and enjoy the breeze. But at the same time, the amount of electricity supplied increases as the wind turbines spin faster - P decrease Qq?
The scenarios are labeled with the correct combination of price change and quantity change.
a. The increase in both demand and supply would lead to a higher quantity of lemonade being exchanged in the market, but the direction of the price change cannot be determined from the given information. Hence, the combination is 'P?, Q+'.
b. The decrease in both demand and supply would lead to a lower quantity of ice cream being exchanged in the market, but the direction of the price change cannot be determined from the given information. Hence, the combination is 'P?, Q-'.
c. The increase in demand and decrease in supply would lead to a higher price and an indeterminate change in quantity. Hence, the combination is 'P+, Q?'.
d. The decrease in demand and increase in supply would lead to a lower price and a higher quantity of electricity being exchanged in the market. Hence, the combination is 'P-, Q+'.
#SPJ3
Answer:The amount that should be reported in ending Work in Process Inventory is:
=$149,500
Explanation:
Work-in-process inventory is materials that are unfinished or partially completed in a production process.
Work in Process inventory = Direct materials cost+ conversion cost
= (equivalent units of direct materials x direct material cost per unit) + (equivalent units of direct materials x conversation cost per unit )
=26,000 x $1.90 + 26,000 x $3.85
$49,400 + $100.100
=$149,500
The amount that should be reported in ending Work in Process Inventory is:
=$149,500
Answer:1408750
Explanation:
Direct Materials 245,000 x 1.90 = 465500
Conversión 245,000x3.85= 943250
Total transferred to finished goods = 465500+943250=1408750
Answer:
Debit Salaries Expense $400 and Credit Salaries payable $400.
Explanation:
Consider, we are told the company pays each of its two office employees, meaning, the 2 employees combine will earn $200 a day.
Furthermore, we are told that even though the monthly accounting period ends on Tuesday the two employees work on Monday and Tuesday, meaning, the adjusting entry to record at the month-end will be a summation of the amount earned by the two employees on the two days. That is, = $200 × 2 days = $400 (which is a salaryexpense).
Therefore, going by the rule of double-entry, we are obliged to debit salaries expense account and credit salaries payable account.
Cash $47,000 $25,000
Accounts Receivable, Net 99,000 62,000
Merchandise Inventory 79,000 50,000
Property, Plant, and
Equipment, Net 181,000 120,000
Total assets $406,000 $257,000
Additional information:
Net sales $530,000
Cost of Goods Sold 150,000
Interest expense 24,000
Net income 181,000
Calculate the return on total assets for the year 2015.
A. 62.03%.B. 45.79%.C. 50.74%.D. 71.98%.
Answer: 61.84%
Explanation:
The Return on Assets is a ratio that measures how effectively assets are being utilized to earn revenue.
The formula is;
Return on total Asset = Operating Income /Average Total assets
Operating Income = Net Income + Interest expense = 181,000 + 24,000 = $205,000
Average Total Assets = (Beginning Assets + Ending Assets) / 2 = (406,000 + 257,000) / 2 = $331,500
Return on Assets = 205,000/331,500 = 61.84%
The options listed are most probably for a variant of this question.