The total amount windfall tax will be $317,405, given the amount of $3,700,000 will be paid for next 25 years.
Amount that will be paid (a) = $3,700,000
Time period (n) = 25 years
interest rate (i) = 7% = 0.07
Present value of windfall tax = a [{1-1/(1+i)} ^25]/i
= 3,700,000 [1-1/(1.07) ^25]/0.07
= $317,405
A windfall tax is an increased tax percentage on earnings that arrive from a company or industry having received an unexpected capital gain. This seems to be frequently the consequence of a global political turmoil, war, or natural catastrophe that creates unexpectedly high requirement and/or supply shortages.
Governments worldwide have initiated windfall taxes for a range of reasons, which include funding social assistance programs, wealth distribution of unpredicted benefits when inflated costs benefit manufacturers at the cost of consumers and as an extra source of revenue for the federal government.
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a security dilemma occurs when a. budget constraints do not allow for proper domestic security measures b. the actions taken by a state to increase its own security threaten the security of other states c. governments are unable to decide on a comprehensive security strategy d. two states do not trust each other e. both b and d
A security dilemma occurs when d. two states do not trust each other.
Security dilemma, in political science, a situation in which actions were taken by a state to grow its own security cause reactions from other states, which in turn result in a decrease in place of a boom inside the unique nation's protection.
The remaining source of the safety dilemma is the anarchic nature of global politics.
Within the context of ethnic conflicts, anarchy may be de facto anarchy (this is, fall apart of crucial authority).
Below anarchy, states can't be certain approximately every different's present and destiny intentions.
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concord coporation developed the following information about its inventories in applying the lower of ocst or market basis in valuing inventories 91000
After Concord Company values its inventory at the lower of cost or net realizable value, the value of the inventory reported on the balance sheet would be $217,600
Inventory valuation is a process in accounting that businesses use to determine the worth of unsold inventory items when they are producing their financial accounts. For an organization, inventory stock is an asset that must have a monetary value in order to be recorded on the balance sheet. Your inventory turnover ratio may be calculated using this number, which can help you plan your purchase selections.Product A
Cost = 69,100
Nrv = 75,200
Lower of above as Inventory = $69,100
Product BCost = 49,300
Nrv = 47,700
Lower of above as inventory= $47,700
Product CCost = 100,800
Nrv = 103,000
Lower of above as inventory= $100,800
Total inventory= 69,100 + 47,700 + 100,800
= $217,600
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Concord Company developed the following information about its inventories in applying the lower of cost or market basis in valuing inventories:
Product Cost NRV
A $ 69100 $ 75200
B 49300 47700
C 103000 100800
After Concord Company values its inventory at the lower of cost or net realizable value, the value of the inventory reported on the balance sheet would be
$227500.
$219200.
$225900.
$217600.
after assigning specialized tasks to individuals, the senior manager next organized workers doing similar jobs into groups to make them easier to manage. the manager grouped the working units by job function. this is an example of
Grouping according to job function is called Departmentalization
An organizational structure known as departmentalization divides employees into groups or departments according to a specific set of standards. These divisions cooperate to carry out responsibilities under the direction of their own leadership. There may be collaboration between various departments on large or complex projects.
Departmentalization is used by organizations for a variety of purposes. It's a good way to organize a lot of people, to start with. Additionally, it can make training simpler, make performance evaluation easier, and enable quick growth or expansion. Last but not least, departmentalization successfully integrates work, enabling individuals to easily communicate with and learn from their departments.
Hence this an example of Departmentalization.
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the marginal propensity to expend is .75. autonomous expenditures are $4,000. what is the level of equilibrium income in the economy?
The level of equilibrium income in the economy is 16,000
Calculating the problem:The level of equilibrium income in the economy:
Equilibrium (Y) = 4000+ 0.75 Y
Y - 0.75 Y = 4000
0.25 Y = 4000
Y = 4000 ÷ 0.25
Y = 16,000
The equilibrium income is 16,000.
The equilibrium level of income:It refers to when an economy has an equal amount of production and market demand. Equilibrium level of income and output in the economy is the one where the required aggregate demand for goods and services is equal to aggregate supply.
How does the increase affect the equilibrium level of income?If income increases, the demand for money increases at a given interest rate. If the supply of money is fixed, the interest rate must increase to lower the demand for money and to maintained the equilibrium.
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florence wants to obtain a loan for a large color laser printer for her copy shop. because the printer will last approximately eight years, the ideal loan would be a(n) loan. a. trade credit b. mortgage c. term d. asset-based
Florence wants to obtain a loan for a large color laser printer for her copy shop. because the printer will last approximately eight years, the ideal loan would be a term loan.
So, the correct option is C.
Equipment, real estate, or working capital are often the purposes of term loans, which have a one-to-25-year repayment period. A small firm frequently utilizes the money from a term loan to buy fixed assets, including machinery or a new facility for its manufacturing process. So, Florence can definitely opt for this loan for buying printer which would be an ideal loan.
Due to the fact that a long-term loan is repaid over time, the interest levied on it is often cheaper than on short-term financing. Long-term loans typically have set interest rates as well. Since they are secured loans, the assets that are used to pay off the term loans act as security, and additional assets act as collateral security. They must be done. Once established, term loans need interest and principal repayments, which must be made whether the borrower is making a profit or not.
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why did aig get bailed out while lehman brothers did not? group of answer choices it had a stronger balance sheet lehman brothers was too big to fail all other major financial firms would have gone bust due to the threat of systemic risk aig is a government entity due to government regulations
Because all other big financial corporations would have failed due to the prospect of systemic risk, aig received bailout money while Lehman Brothers did not.
The process of raising money or capital for any form of spending is referred to as finance. It involves directing different sources of funding, such as credit, loans, and investment money, to the businesses that can use them most effectively. The definition of finances according to Finance Box is "The money that people, businesses, or national economies earn and spend." Risk is the potential for bad things to happen, to put it simply. Risk refers to uncertainty on how a certain action will affect or have implications for a human value (such as one's health, well-being, wealth, property, or the environment), frequently focused on unfavourable outcomes.
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according to the jp 4-0, "using the as a frame, the jfc’s logistics staff elements develop and codify an overarching approach to theater operations in the ."
"Using the Theater Logistics analysis (TLA), Theater Logistics Overview (TLO) as a frame, the jfc’s logistics staff elements develop and codify an overarching approach to theater operations in the."
Through inspection, appraisal, and codification of knowledge about the existing circumstances of the operational environment, the theater logistics analysis (TLA) is a supporting process that makes it easier to construct the theater logistics overview (TLO). The TLA offers a rough detailed analysis of key infrastructure by location or installation (main operating base, forward operating site, cooperative security location), footprint projections, and host nation (HN) agreements needed to support logistically theater peacetime through contingency operations.The creation of the TLO is a step in the iterative planning process that focuses on defining the theater's overarching purpose at the campaign level and identifying a logistical support strategy for theatrical operations from phase 0 to phase V using the TLA and operational art components.Learn more about Theater Logistics analysis (TLA), here
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during 2030, basler manufacturing produced 60,000 units and sold 55,000 for $10 per unit. variable manufacturing costs were $5 per unit. annual fixed manufacturing overhead was $120,000 ($2 per unit). variable selling and administrative costs were $1 per unit sold, and fixed selling and administrative costs were $30,000.
The absorption costing income statement is as follows: Sales (55,000 × $10) =$550,000 COGS (55,000 × $7) =385,000 Gross margin = 165,000 Var. S&A expenses (55,000 × $1) = $55,000 Fixed S&A expenses 30,000 & 85,000 Net income 80,000
The conventional income statement, also known as the absorption costing income statement, is produced using absorption costing. In this financial statements, costs are broken down into product costs and period costs to examine costs.
A managerial accounting technique known as "absorption costing," also known as "full costing," is used to record all expenses related to producing a specific product. This strategy accounts for both direct and indirect costs, including direct materials, direct labour, rent, and insurance.
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per month excise tax is imposed on firms selling office space. d is the demand curve, s1 is the supply curve in the absence of the tax, and s2 represents the supply curve that includes the tax.
Producers will have larger tax incidence and excise tax fall on above people because the supply of office rental is more inelastic than its demand.
Tax incidence relates to the way the tax burden is divvied up between sellers and buyers. The tax incidence is ascertained by the price supply and demand elasticity. Buyers carry the largest portion of the tax burden when stock is more elastic than demand. When demand is much more elastic than supply, production companies bear the largest portion of the tax burden.
The larger the inelasticity of both demand and supply, the larger the tax income. A tax's incidence, or burden, typically falls on both consumers and producers of the paying tax good. However, if we want to predict which group will bear the majority of the burden, we only need to look at the elasticity of demand and supply.
The complete question is here:
The graph below shows the market for office rental space. A $400 per month excise tax is imposed on firms selling office space. D is the demand curve, S1 is the supply curve in the absence of the tax, and S2 represents the supply curve that includes the tax.
(Picture is given below)
Who has larger tax incidence?
producersConsumersThis excise tax falls on the above people because:
The supply of office rentals is more inelastic than the demand for office rentalsThe demand for office rentals is more inelastic than the supply of office rentalsThe supply of office rentals is more elastic than the demand for office rentalsFor office rentals, both demand and supply are highly price elasticLearn more about tax incidence is here:
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A _____ is an organization of employees formed to represent workers in their disputes with management over wages, hours, and working conditions.
The sentence can be completed thus: A labor union is an organization of employees formed to represent workers in their disputes with management over wages, hours, and working conditions.
What is a labor union?A labor union is a collective group of people that come together to fight for the rights of an organization. They make sure that the interest of the employees is protected and that they are not subjected to ill-treatment by their employers.
Sometimes, the labor union can engage in protests or strikes to tender their complaints. They can also take the employers to court to fight for their rights.
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he sarbanes-oxley act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures. true false
True, Sarbanes-Oxley act requires that financial statements of all public companies report on management's conclusions about the effectiveness of the company's internal control procedures.
The Sarbanes-Oxley Act of 2002 is a law that established stringent auditing and financial restrictions for publicly traded corporations. The legislation was enacted to protect shareholders, employees, and the general public from accounting irregularities and financial fraud practices. The Sarbanes-Oxley Act requires public company management to evaluate the effectiveness of issuers' internal control over financial reporting.
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i buy a perpetuity from a bank today for $200. in five years, after collecting each year’s payment, i then offer to sell the perpetuity back to the bank. if interest rates haven’t changed, what should the perpetuity be worth at that time?
Worth of the perpetuity after 5 years is to be calculated using discounted cash flow (DCF) analysis. [P.V.×(rate) ] × 5 will be the worth of perpetuity at the time of selling
A perpetuity is a type of investment that pays forever. In the world of finance, perpetuity refers to an endless succession of identical cash flows. A perpetuity is an agreement with ongoing recurring payments that last forever.
The recurring payment must equal the present value multiplied by the interest rate. A perpetuity is a kind of annuity which is perpetual, lasting eternally. An endless period of time passes while the value of cash flows continuously.
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eagle electronics must expand by building a second facility. the search has been narrowed down to locating the new facility in one of four cities: atlanta (a), baltimore (b), chicago (c), or dallas (d). the factors, scores, and weights follow: scores by site i factor weight (w i )a b c d 1 labor quality 20 5445 2 quality of life 16 2341 3 transportation 16 3432 4 proximity to markets 14 5344 5 proximity to suppliers 12 2334 6 taxes 12 2554 7 energy supplies 10 5433
The best site for Eagle Electronics is using factor rating method.
How to illustrate the information?The information given can be illustrated as:
Factor Factor Description Weight Score Weighted Score Score Weighted Score Score Weighted Score Score Weighted Score
a b a*b c a*C d a*d e a*e
1 Labor Quality 18 2 36 1 18 4 72 1 18
2 Quality of Life 18 2 36 3 54 4 72 1 18
3 Transportation 15 2 30 3 45 4 60 2 30
4 Proximity to Markets 16 1 16 2 32 4 64 3 48
5 Proximity to Suppliers 10 4 40 3 30 5 50 3 30
6 Taxes 12 1 12 2 24 4 48 2 24
7 Energy Supplies 10 2 20 4 40 5 50 3 30
Composite Weighted Rating (Total) 190
Based on the information, using factor rating method, the best site for Eagle Electronics; new facility is C with a total weighted score of 416.
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Clauss cutlery sells knives to the floral industry. These knives are designed to slice through foam blocks, cut wire, and perform other similar tasks. It also sells cutting utensils to the meat-processing industry. These large heavy-duty blades can saw through carcasses quickly. Clauss also sells a line of cutting tools to people in the woodworking industry for sawing and shaping wood cutouts. Clauss cutlery should use a _____ sales organization.
Claus cutlery should use a customer sales organization.
What exactly do you mean by "client"?An individual or business that purchases goods or services from another company is known as a customer. Customers are crucial to businesses because they generate income; without them, they would cease to exist.
Which four types of clients are there?It's analytical. This type of personality scans a sales presentation for facts and data.
The Pleasant. The Amiable are kind, friendly, and reliable.
The Expressional
The Operator.
What do you meaning by customer?A client is an individual or business that purchases another company's goods or services. Customers are crucial to businesses because they generate income; without them, they would cease to exist.
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Percentage analysis sidesteps the materiality problems of comparing different size companies by measuring changes in percentages rather than absolute amounts. This statement is?.
By using percentage analysis, the materiality problems are sidestepped due to this the statement will be correct.
The concept of materiality in takes into account that all significant items must be fairly presented in the financial statements. The term "material items" refers to those components whose inclusion or omission significantly alters how business information clients make these decisions.
The concept of materiality also permits bypassing other accounting rules if doing so has no bearing on the financial statements of the company involved. In order to convey an accurate portrayal of the business, the data contained in the financial statements has to be full in terms of all relevant information.
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suppose that a certain country has an mpc of 0.9 and a real gdp of $400 billion. if its investment spending decreases by $5 billion, what will be its new level of real gdp?
$375 billion will be its new level of real GDP.
What is GDP?One of the most well-known is GDP, or gross domestic product. It is regularly cited in books, newspapers, television news, and reports by governments, central banks, and the corporate world. These days, it is commonly used as a benchmark to gauge the health of both national and global economies.
The gross domestic product is a commonly used indicator of the value added produced by the production of goods and services in a country over a certain time period. As a result, it also takes into account the money made from that manufacturing, or the sum of money spent on finished goods and services.
Thus, it is $375 billion.
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If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is.
The method of costing that will yield the highest net income if merchandise inventory is being valued at cost and the price level is steadily rising is FIFO (first-in, first-out).
First In, First Out, commonly known as FIFO, can be described as an asset-management and valuation method in which assets produced or acquired first are sold, used, or disposed of first. First In, First Out assumes that assets with the oldest costs are included in the income statement's cost of goods sold (COGS).
To calculate FIFO (First-In, First Out) method we have to determine the cost of your oldest inventory and multiply that cost by the amount of inventory sold.
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As the degree of customer contact increases in a service operation, what generally happens to the efficiency of the operation?.
The efficiency of the operation typically diminishes as the level of customer engagement rises in a service operation.
Are customer-facing service activities more or less challenging to manage than those that have less touch with customers?This conception implies that high customer contact service systems are more difficult to govern and to justify than low customer contact service systems.
What name is given to the collection of products and services that each service company offers in a particular setting?The Service Bundle A service package is described as a collection of products and services offered in a certain setting.
What name is given to the collection of products and services that each service operation offers in a certain setting?Every service system offers a particular mix of services and products in an environment that the client engages with on some level. The term "service package" refers to this entire combo.
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question content area which of the following is always recorded in the general journal? a.closing entries b.rendering services on account c.rendering services for cash d.purchases of supplies on account
Closing entries is always recorded in the general journal.
What items are in the general journal?
A general journal is the primary place where data is recorded, and each page in the item features columns dividing for dates, serial numbers, as well as debit or credit records. Some organizations keep journals, such as purchase journals or sales journals, that only record specific types of transactions.
What is meant by general journal?The general journal refers to a book of original entries, in which accountants and bookkeepers records raw business transactions, in order to the date of the events occur.
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city farm insurance has collection centers across the country to speed up collections. the company also makes its disbursements from remote disbursement centers, so the firm's checks will take longer to clear the bank. collection time has been reduced by four days and disbursement time increased by two days because of these policies. excess funds are being invested in short-term instruments yielding 4 percent per annum. a. if city farm has $4.15 million per day in collections and $3.20 million per day in disbursements, how many dollars has the cash management system freed up? (enter your answer in dollars not in millions (e.g., $1,234,567).)
Excess funds are invested in short-term instruments yielding 4 percent per annum. a. if city farm has $4.15 million per day in collections and $3.20 million per day in disbursements, Total cash freed up = $22,750,000
Cash freed up from collection equals daily collection amount times the shorter collection period.
= 4,500,000 x 3.5 days
= 15,750,000
funds freed up from Disbursement = Daily disbursement amount times lengthened disbursement period
= 3,500,000 x 2 days
= 7,000,000
15,750,000 plus 7,000,000 in total cash were released.
Short-term instruments include, but are not limited to, certificates of deposit, bankers' acceptances, commercial paper, treasury bills, and agency discount paper. Short-term instruments are issued by a variety of different issuers, such as governments and businesses, and have a maturity of less than one year.
the complete selection of Desjardins investment funds to suit your requirements. Your ability to pursue your most exciting dreams is made possible by our finances! Web-based services
= 22,750,000
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Record journal entries for tree seedlings’ sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and lifo. All sales and purchases are made on account, and no discounts are offered. True of false?.
Record journal entries for tree seedlings’ sales and purchases transactions. Assume for this assignment that the company uses a perpetual inventory system and life. All sales and purchases are made on the account, and no discounts are offered.
The statement is True.
A journal entry is used to record a business transaction in the accounting information of a commercial enterprise. A journal entry is normally recorded in the fashionable ledger; rather, it may be recorded in a subsidiary ledger which is then summarized and rolled forward into the overall ledger.
They are:
starting entries. these entries deliver over the finishing balance from the preceding accounting period as the start stability for the contemporary accounting duration.
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the costs of production include: multiple choice the costs that appear on the income statements. the opportunity costs foregone by producing a given product. accounting costs. accounting costs and opportunity costs.
The costs of production include opportunity costs.
A firm's cost of manufacturing includes all of the possibility fees of creating its output of products and services. Explicit and Implicit Costs •A firm's price of manufacturing encompass specific fees and implicit fees. Explicit fees are enter fees that require an instantaneous outlay of cash through the firm.
Production fees talk over with all the direct and oblique fees organizations face from production a product or presenting a service. Production fees can encompass a lot of expenses, such as labor, uncooked materials, consumable production supplies, and fashionable overhead.
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if a cash budget is prepared by quarter, the beginning cash balance for the year is the same as the beginning cash balance for the quarter and the ending cash balance for the year is the same as the ending cash for the
If a cash budget is prepared by quarter, the beginning cash balance for the year is the same as the beginning cash balance for the first quarter and the ending cash balance for the year is the same as the ending cash for the fourth quarter.
What is a budget?A budget is a financial plan that is typically used for the estimation of revenue and expenditures of an individual, business organization or government for a specified period of time, often one (1) year.
The types of budget.Generally speaking, there are different types of budget and this include the following:
Master budgetProduction budgetSales budgetFlexible budgetStatic budgetCash budgetIn conclusion, a cash budget is typically prepared towards the end of a master budget process or on a quarterly basis.
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Complete Question:
If a cash budget is prepared by quarter, the beginning cash balance for the year is the same as the beginning cash balance for the _____ quarter and the ending cash balance for the year is the same as the ending cash for the _____.
g in general, the government should finance only those public projects that: group of answer choices result in losses if they were financed by the market deliver benefits greater than opportunity costs eliminate market power have externalities
In general, the government should finance only those public projects that deliver benefits greater than opportunity costs.
The government needs to be careful when funding of a project and work on providing funding for only those projects that will deliver more benefits. When financing a public project, the government needs to look at the opportunity cost and the benefits that will be generated from the project.
A government should always invest in a project that will increase the economy of a country.
Funding for projects whose opportunity cost is greater than its benefit will not be beneficial and will put a burden on the economy of a country.
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a small, blockchain-based banking firm has a clan culture. its employees have generous perks and are empowered to participate and collaborate on key projects
Since the employees of this banking firm have generous perks and are empowered to participate and collaborate on key projects, it implies that a clan culture has an: internal focus and values flexibility.
What is culture?Culture simply refers to the general way of life of people in a specific society or geographical area. This ultimately implies that, culture can be defined as a sum total of the norms, beliefs, values, clothes, language, foods, and behaviors which a group of people that are living in a geographical area share in common.
What is a clan culture?A clan culture can be defined as a corporate culture model that emphasizes consensus, internal focus, flexibility, and commonality of goals and values among the employees working in a business organization (company or firm).
In this context, we can reasonably infer and logically deduce that a clan culture simply refers to a tribe-like or family-like type of corporate environment which is primarily characterized by internal focus, consensus, values, and flexibility.
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Complete Question:
A small, blockchain-based banking firm has a clan culture. Its employees have generous perks and are empowered to participate and collaborate on key projects. The end results are profitability and an enviably low 2-percent turnover rate. A clan culture has a(n):
internal focus and values flexibility.
strong external focus and values stability and control.
external focus and values flexibility.
Internal focus and values stability and control
Would you rather fight a tiger or a bear? Write AT LEAST 4 SENTENCES explaining which one you would rather do and why. 20 points
Answer:
I rather fight a tiger, because bears are quite dangerous when it comes to fighting. It could easily kill you in no second. Tigers can run faster than humans, Depending on which one. A bear has bigger claws I wouldn't mess with a bear. It's a quite hard question since bears and tigers can kill me anytime.
Answer: Tiger
Explanation: Honestly, bears are just bigger, meaner, and stronger than tigers. I feel like I'd have more of a fighting chance fighting a smaller more agile beast like a tiger, than a literal natueral tanky bear. Bears are known for just attacking bee nests and just ignoring the SWARM of bees attacking them, they're insane, the bear would just stroll toward me no matter what I do to it, while the tiger may be more tactical giving me some time to evaluate. So yeah, tiger all the way.
price company, a wholesaler, records annual sales revenue of $425,000, and reports cost of goods sold of $145,000. what would price report as its gross profit for the year?
Answer: 280,000.00
Explanation:
if cindy deposits $12,000 into a bank account that pays 6% interest compounded semiannually, what will the account balance be in seven years? group of answer choices 18,151 16,987 14,356 15,555
The final account balance in seven years = $18,151.
Option A is correct .
Compound interest :Compound interest is interest calculated on the original star, which also includes all of the accumulated interest from former ages. Generating" interest on interest" is known as the power of compound interest. Interest can be compounded on any given frequence schedule, from nonstop to diurnal to annually.
Evaluation of interest :The formula of Compound interest ,
Final Amount = Principal {[1 + (Rate ÷ n) ]^ ( Time × n)}
where n = number of times interest applied per time period
Principal = $12000
Rate = 6% compounded Semiannually ,
so n = 2 as interest will be paid twice in a year.
Time = 7 Years
Final Amount = $12000 × {[1 + ( 6% ÷ 2)] ⁷ˣ²}
Final Amount = $12000 × [( 1 + 3% )¹⁴ )]
Final Amount = $12000 × [( 1 + 0.03)¹⁴ )]
Final Amount = $12000 × [( 1.03) ¹⁴ ]
Final Amount = $12000 × 1.51
Final Amount = $18151
Option A is correct .
What's amount of interest?The interest rate is the amount a lender charges a borrower and is a chance of the top — the amount lent. The interest rate on a loan is generally noted on an periodic base known as the amount principal rate( APR)
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on january 2, 2018, moser, inc., purchased equipment for $100,000. the equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. straight-line depreciation has been recorded. before adjusting the accounts for 2022, moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000.
Book value is 33600 of the equipment at the end of 2022after recording the depreciation expense for 2022.
The accounting technique of spreading out the cost of a tangible item over its useful life is known as depreciation. The equipment amount of depreciation shows how much of an asset's worth has been utilized. By purchasing assets over a predetermined length of time, it enables businesses to generate income from the assets they own.
The initial cost of ownership is substantially equipment lower because businesses don't have to account for them totally in the year that assets are bought. A company's profitability might be significantly impacted if depreciation is not taken into consideration. Long-term assets may also be depreciated by businesses for accounting and tax purposes.
Original Annual dep
Cost of Equipment 100000
Less: Salvage value 10000
Depreciable cost 90000
Divide: Life 6
Annual depreciation 15000
Accumulated dep fr 4 yrs upto 31.12.21 = 15000*4 = 60,000
Book value on 01.01.19 (100000-60000) 40000
Less: Revised salvage value 8000
Depreciable cost 32000
Divide: Revsied remaining life (2+3) 5
Annual depreciation 6400
Journal entry for depreciation
Date Accounts title and explanation Debit $ Credit $
31.12.22 Depreciation expenses 6400
Accumulated depreciation-Equipment 6400
Book value on 01.01.22 (as computed above) 40000
Less: Depreciation fr 2022 6400
Book value as on 31.12.22 33600
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The complete question is
On January 2, 2015, Moser, Inc., purchased equipment for $100,000. The equipment was expected to have a $10,000 salvage value at the end of its estimated six-year useful life. Straight-line depreciation has been recorded. Before adjusting the accounts for 2019, Moser decided that the useful life of the equipment should be extended by three years and the salvage value decreased to $8,000.
a. Prepare a journal entry to record depreciation expense on the equipment for 2019. Round your answer to the nearest dollar.
b. What is the book value of the equipment at the end of 2019 (after recording the depreciation expense for 2019)?
Book Value at year ended December 31, 2019:
what would be the effect on the income statement if the adjustments for equipment depreciation and unearned fees were omitted at the end of the year? enter all amounts as positive numbers.
If the adjustments for equipment depreciation and unearned fees were omitted at the end of the year asset will be seen as overstated.
Assets on the income statement would be exaggerated if depreciation adjustments were not documented. Moreover, expenditures would be underestimated on the financial statements, resulting in an overestimation of net earnings. If net revenue is overstated, so are retained earnings on the balance sheet. Depreciation is apportioned so that a good portion of the accumulated depreciation is charged for each fiscal period during the asset's anticipated useful life.
The main purpose of charging depreciation is to allow the company to purchase the asset later, when the life of existing machine will get over, basically by charging depreciation, the company set aside a sum of money to purchase the asset.
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