Answer:
Project NPV at 5% discount rate = $1346 .78
Project NPV at 18% discount rate = -597.4
Explanation:
Below is the given values:
Initial cost = $2.2 billion
Yearly cash inflow, A = $300 million
Time = 15 years
Salvage value, S = $900
Project NPV at 5% discount rate = A (P/A, 5%, 15) + S (P/F, 5%, 15) - Initial cost
Project NPV at 5% discount rate = 300 (P/A, 5%, 15) + 900 (P/F, 5%, 15) - $2.2 billion
Project NPV at 5% discount rate = 300 (10.3796) + 900 (0.4810) - $2.2 billion or 2200 million
Project NPV at 5% discount rate = $1346 .78
Now,
Project NPV at 18% discount rate = 300 (5.0915) + 900 (0.0835) - $2.2 billion or 2200 million
Project NPV at 18% discount rate = -597.4
Fina Corp. had the following transactions during the quarter ended March 31, 2018: Payment of fire insurance premium for calendar year 2018 800,000 What amount should be included in Fina's income statement for the quarter ended March 31, 2018?
Answer:
$200,000
Explanation:
When a company prepays for a service, the amount prepaid is recognized as an asset until the service is enjoyed (usually with the passing of time).
This is recorded as follows
Dr Prepaid expense
Cr Cash account
Being entries to recognize amount prepaid.
As the service is enjoyed,
Dr Expense
Cr Prepaid expense
Being entries to recognize expense incurred.
Since 800,00 was the amount prepaid for the calendar year 2018, by 31 March 2018, the amount used up (to be recognized as expense in the income statement) will be
3/12 * $800,000
= $200,000
A producer of fixed proportion goods X and Y (Q = Qx = Qy) has marginal costs and revenues of MC = 10 Q, MRX = 150 - 6 QX, MRy = 30 - 4 Qy. The producer should produce how many units?
a. Qx =9, Qy=9
b. Qx = 9, Qy = 7.5
c. Qx = 10, Qy = 10
d. Qx = 9, Qy=0
Answer:
a. Qx =9, Qy=9
Explanation:
As per the given data
Q = QX = QY
MRX = 150 - 6QX = 150 - 6Q
MRY = 30 - 4QY = 30 - 4Q
MC = 10Q
Now calculate the Marginal revenue as follow
MR = MRX + MRY
MR = 150 - 6Q + 30 - 4Q
MR = 150 + 30 - 6Q - 4Q
MR = 180 - 10Q
The Equilibrium of the producer will be
MR = MC
180 - 10Q = 10Q
180 = 10Q + 10Q
180 = 20Q
Q = 180 / 20
Q = 9
As we know
Q = Qx = QY
Hence, the value of Qx and QY is 9
A lender uses these tools to help prequalify you for a mortgage
Answer:
Following are the summary of tools/documents that are used by lenders to pre-qualify their customers for a mortgage :
1. Tax returns, W-2s, and 1099s are examples of income as well as employment records.
2. Bank, pension, and brokerage accounts property declarations
3. Settlements on your obligations on a regular basis as well as any real estate debt statements.
4. Rent deposits, divorce, insolvency, and repossession records are all kept on file.
Northberg Company is preparing a cash budget for August. The company has $16,000 cash at the beginning of August and anticipates $126,000 in cash receipts and $134,500 in cash payments during August. Northberg Company wants to maintain a minimum cash balance of $15,000. To maintain the $15,000 required balance, during August the company must: Group of answer choices Borrow $15,000. Repay $7,500. Repay $8,500. Borrow $7,500. Borrow $8,500.
Answer:
Borrow $7,500
Explanation:
The calculation of the amount that should be required to maintain the required balance is given below:
Preliminary cash balance
= Opening balance + Cash receipts - Cash disbursements
= $16,000 + $126,000 - $134,500
= $7,500
Since we have to maintain $15,000 so we have to borrow the following amount
= $15,000 - $7,500
= $7,500
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2. Unit price and cost data are: M N OUnit sales price$12 $10 $11Unit variable costs 9 8 9Total fixed costs are $585,000. The selling price per composite unit for the current sales mix (rounded to the nearest cent) is:
Answer:
Selling price per composite unit= $11.3
Explanation:
Giving the following information:
Madison Corporation sells three products (M, N, and O) in the following mix: 3:1:2.
Unit price and cost data are: M N OUnit sales price$12 $10 $11
First, we need to calculate the sales proportion for each product:
M= 3/6= 0.5
N= 1/6= 0.17
O= 2/6= 0.33
Now, the selling price per composite unit:
Selling price per composite unit= (0.5*12) + (0.17*10) + (0.33*11)
Selling price per composite unit= $11.3
mention two demand side Approaches which are used by RSA government to promote economic growth and development
The two demand-side approaches will be "Fiscal policy" and "Monetary policy".
Fiscal policy - Through the utilization of public expenditure and fiscal policies that impact economic circumstances, particularly economic variables, comprising overall payment mode as well as productivity expansion, is considered as a Fiscal policy.Monetary policy - It requires the implementation done by that of the banking system of a community to manage supplies of currency and accomplish economic objectives promoting economic development.
So the above is the right answer.
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Broker Pat received an offer for a listing along with a $5,000 check from the buyer as an earnest money deposit. When the owner accepts the offer, Pat should handle the check in any of the following ways, except to:____.
a. deposit the check into Pat's brokerage account.
b. give the check to the owner of the property.
c. give the check to the escrow agent.
d. deposit the check in Pat's trust fund account.
Answer:
b. Give the check to the owner of the property.
Explanation:
Pat is a broker who has received an offer for a listing along with check. He can give the check to an escrow agent or deposit the check into pat's brokerage account. he cannot give check directly to the owner of the property.
The following information is available for Lock-Tite Company, which produces special-order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 33,000 $ 32,000 Work in process 9,400 20,800 Finished goods 50,000 34,600 Activities and information for May Raw materials purchases (paid with cash) 171,000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 12,000 Indirect labor 57,500 Other overhead costs 110,000 Sales (received in cash) 1,700,000 Predetermined overhead rate based on direct labor cost 55 % Exercise 19-7 Cost flows in a job order costing system LO P1, P2, P3, P4 Compute the following amounts for the month of May using T-accounts. Cost of direct materials used. Cost of direct labor used. Cost of goods manufactured. Cost of goods sold\.\* Gross profit. Overapplied or underapplied overhead. *Do not consider any underapplied or overapplied overhead.
Answer:
Lock-Tite Company
Cost of direct materials used = $160,000
Cost of direct labor used = $192,500 ($250,000 - $57,500)
Cost of goods manufactured = $446,975
Cost of goods sold = $462,375
* Gross profit = $1,237,625
Overapplied or underapplied overhead = $73,625
*Do not consider any underapplied or overapplied overhead.
Explanation:
a) Data and Calculations:
Inventories April 30 May 31
Raw materials $ 33,000 $ 32,000
Work in process 9,400 20,800
Finished goods 50,000 34,600
Activities and information for May:
Raw materials purchases (paid with cash) 171,000
Factory payroll (paid with cash) 250,000
Factory overhead:
Indirect materials 12,000
Indirect labor 57,500
Other overhead costs 110,000
Sales (received in cash) 1,700,000
Predetermined overhead rate based on direct labor cost 55 %
T-accounts:
Raw materials
Date Account Titles Debit Credit
April 30 Inventory balance $ 33,000
May Cash 171,000
May Factory overhead $12,000
May Work in process 160,000
May 31 Inventory balance $ 32,000
Work in process
Date Account Titles Debit Credit
April 30 Inventory balance $ 9,400
May Raw materials 160,000
Factory payroll 192,500
Factory overhead 105,875
Finished goods $446,975
May 31 Inventory balance $ 20,800
Finished goods
Date Account Titles Debit Credit
April 30 Inventory balance $ 50,000
May Work in process 446,975
May Cost of goods sold $462,375
May 31 Inventory balance $ 34,600
Factory overhead
Date Account Titles Debit Credit
May Raw materials 12,000
Payroll 57,500
Other expenses 110,000
May Work in process $105,875
May Underapplied overhead 73,625
Sales revenue = $1,700,000
Cost of goods sold (462,375)
Gross profit $1,237,625
The price of lemonade is $1.50; the price of popcorn is $0.75. If Fred has maximized his utility by purchasing lemonade and popcorn, his marginal rate of substitution will be: Group of answer choices 1/2 lemonade for each popcorn. indeterminate unless more information on Fred's marginal utilities is provided. 2 lemonades for each popcorn. none of these options is correct
Answer: 1/2 lemonade for each popcorn
Explanation:
Price of lemonade = $1.50
Price of popcorn = $0.75
Let good 1 = popcorn
Let good 2 = lemonade
MRS = MU1/MU2 = P1/P2
= 0.75/1.50
= 1/2
Therefore, the marginal rate of substitution will be 1/2 lemonade for each popcorn.
Therefore, the correct option is A.
Flying Cloud Co. has the following operating data for its manufacturing operations:
Unit selling price $ 350
Unit variable cost $ 100
Total fixed costs $980,000
The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 5%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be:__________
a) increased by 368 units
b) decreased by 368 units
c) increased by 132 units
d) decreased by 264 units
Answer:
a) increased by 368 units
Explanation:
The calculation of the next break even point should be
Existing break-even point for Flying Cloud Co. is
= Fixed Cost ÷ Contribution Margin Per Unit
= Fixed Cost ÷ Sales Price Per Unit - Variable Cost per Unit
= $980,000 ÷ ( $350 - $100)
= 3,920 Units
Now
Revised Variable cost = $100 × 110%
= $110
And,
Revised Fixed cost = $980,000 × 105%
= $1,029,000
So,
Revised break-even point for Flying Cloud Co. is
= Fixed Cost ÷ ( Contribution Margin Per Unit
= Fixed Cost ÷ ( Sales Price Per Unit - Variable Cost per Unit
= $1,029,000 ÷ ( ( $350 -$110)
= 4,287.5
= 4,288 units
So,
Increase = 4,288 Units - 3920 Units
= 368 Units Increase
A horizontal merger between two firms occurs when: __________
a. the products of the merging firms were not related in any manner before the merger.
b. one firm is a producer of products, and the other firm is a producer of services.
c. one firm is a domestic firm, and the other is a foreign company
d. the firms stood in a buyer-seller relationship before the merger.
e. the merger partners were competitors.
Answer:
e
Explanation:
A merger can be described as the absorption of one firm by another firm.
When a merger occurs, one of the firms would not exist as a separate entity while the other firm would continue to exist.
Types of merger
1. Horizontal merger : this is a type of merger that occurs between firms in the same industry. The firms are usually competitors.
Reasons for an horizontal merger
It is done to increase the market power of a firmThis type of merger is done to achieve economies of scale.An example of an horizontal merger is the merger between Mobil and Exxon in 1999.
2. Vertical merger : this is when a firm purchases another firm in the same production line. e.g. a baker purchases a pastry distributing company
Reasons for a vertical merger
Cost savingsIt provides the firm acquiring a greater control of the production process.Types of vertical merger
a. Backward integration : it is when the acquiring firm purchases a firm ahead of it in the production process. e.g. a baker purchases a pastry distributing company
b. Forward integration : it is when the acquiring firm purchases a firm that is behind it in the production process. e.g. a baker purchases a firm that supplies grains
3. Conglomerate merger : This occurs when the products of the merging firms were not related in any manner before the merger.
Based on a predicted level of production and sales of 30,000 units, a company anticipates total contribution margin of $105,000, fixed costs of $40,000, and operating income of $65,000. Based on this information, the budgeted operating income for 28,000 units would be
Answer: $58,000
Explanation:
Operating income for 28,000 units = Contribution margin for 28,000 units - Fixed costs
Contribution margin for 28,000 units:
= 28,000 units * Contribution margin of 30,000 units / 30,000 units
= 28,000 * 105,000 / 30,000
= $98,000 units
Operating income for 28,000 units = 98,000 - 40,000
= $58,000
The following is an account for a production department, showing its costs for one month: Work in Process Inventory Beginning Balance5,400Completed and transferred out49,410 Direct materials21,600 Direct labor16,200 Overhead10,800 Ending Balance4,590 Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the started and completed units cost $41,850, what was the cost of completing the units in the beginning Work in Process inventory
Answer:
$2,160
Explanation:
Total costs = Beginning Balance + Direct materials + Direct labor+ Overhead
Total costs = $5,400 + $21,600 + 16,200 + $10,800
Total costs = $54,000
Total transferred out = Total costs - Ending Balance
Total transferred out = $54,000 - $4,590
Total transferred out = $49,410
BGIP transferred out = Total transferred out - Assumed started and completed units cost
BGIP transferred out = $49,410 - $41,850
BGIP transferred out = $7,560
Cost to complete BGIP = BGIP transferred out - Beginning Balance
Cost to complete BGIP = $7,560 - $5,400
Cost to complete BGIP = $2,160
Suppose you entered a contract to buy your friend's iPad. Without your knowledge, it was malfunctioning at the time you bought it, and it died soon after you started using it. Your friend had recently removed a large number of applications from the iPad that were not working. Although he honestly thought the problem was with the applications and not the iPad itself, he failed to tell you about the problem. You reasonably concluded, based on your inspection of all of the current applications on the iPad, that it was functioning properly. Can you rescind the contract to buy the iPad?
a. Yes, due to fraud.
b. Yes, due to innocent misrepresentation.
c. Yes, due to mutual mistake.
d. Yes, due to undue influence.
e. No, the latent malfunction was not material, because the iPad was functioning when you bought it.
Answer:
Can you rescind the contract to buy the iPad?
b. Yes, due to innocent misrepresentation.
Explanation:
You can rescind the contract without damages or you claim damages based on the loss that you have already incurred for the contract. An innocent misrepresentation occurs when the misrepresentation is not fraudulent nor negligent. Therefore, you can rescind the contract or affirm it. But if the misrepresentation is fraudulent or negligent, you can rescind the contract as well as claim damages.
Question 4 James Bennett also allocates wealth between youth and old age. He has no cash currently (in his youth), but will inherit $3000 in his old age. He can lend and borrow at the bank at 18% (that is, lending $1 in youth will give him $1.18 in old age). He has an investment opportunity that costs $12,000 now in his youth and has a payoff of $15,000 in his old age. This is the only investment opportunity available to him. What is the most he can consume in his youth
James Bennet needs us to locate investment opportunities for him.
James divides his fortune between youth and old age, as is shown to us. He is currently cashless.
He has access to bank borrowing and lending at 18%.
Some investment opportunities are presented to him.
Investing is the act of placing money into a bank, a piece of property, or a company.
Savings can also take the form of investments.
The most he should spend while still young is $15,254.23.
This calculation is displayed.
The future value is the present value times 1.18.
Future worth = $15,000 + $3,000
= $ 18,000
Therefore, the present value is equal to $18,000 divided by 1.18.
= $ 15, 254.23.
The value that represents today's value is referred to as present value.
Consequently, we might infer that the greatest amount is $15,254.23 that he can spend during his childhood.
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An employee earned $1,000 in the first pay period of the current year. How much is the total employer and employee social security taxes on these earnings? (Use the simplified rate shown in illustrations.)
Answer: $120
Explanation:
The total employer and employee social security taxes is 6% fir the employee and 6% for the employee which then makes up 12%.
Since the employee earned $1,000 in the first pay period of the current year, then the total employer and employee social security taxes on these earnings will be:
= 12% × $1000
= 0.12 × $1000
= $120
der owns a hamburger restaurant. Slider's minimum average variable cost is $10$ 10 at a quantity of 100 hamburgers, and his minimum average total cost is $15$ 15 at a quantity of 200 hamburgers. His total fixed cost is $300$ 300 . Use this information to answer the questions. What is Slider's AVC when he sells 200 hamburgers?
Answer:
$13.50
Explanation:
Average Total Cost = Average Variable Cost + Average Fixed Cost
Average Fixed Cost = total fixed cost / quantity
300 / 200 = 1.5
15 = 1.5 + Average Variable Cost
Average Variable Cost =15 - 1.5 = 13.50
AJ Manufacturing Company incurred $54,500 of fixed product cost and $43,600 of variable product cost during its first year of operation. Also during its first year, AJ incurred $17,350 of fixed and $13,900 of variable selling and administrative costs. The company sold all of the units it produced for $178,000. Required Prepare an income statement using the format required by generally accepted accounting Principles (GAAP). Prepare an income statement using the contribution margin approach.
Answer and Explanation:
The preparation of the income statement under following approaches are
Under generally accepted accounting Principles (GAAP)
Sales $178,000
Less: cost of goods sold ($54,500 + $43,600) -$98,100
Gross margin $79,900
Less: selling & general admin ($17,350 + $13,900) -$31,250
Net income $48,650
Under contribution margin approach
Sales $178,000
Less: variable cost ($43,600 + $13,900) -$57.5
Contribution margin $120,500
Less: fixed cost ($54,500 + $17,350) -$71,850
Net income $48,650
A sporting equipment store expects to purchase $8,200 of ski boots in October. The store had $2,800 of ski boots in merchandise inventory at the beginning of October, and expects to have $1,800 of ski boots in merchandise inventory at the end of October to cover part of anticipated November sales. What is the budgeted cost of goods sold for October?
a) $7,000.
b) $9,000.
c) $8,000.
d) $12,000.
e) $11,000.
Answer:
$9,200
Explanation:
Calculation to determine the budgeted cost of goods sold for October
Using this formula
Budgeted cost of goods sold for October =Cost of ski boots + Inventory at the beginning - Inventory at the end
Let plug in the formula
Budgeted cost of goods sold for October = $2800 + $8200 - $1800
Budgeted cost of goods sold for October= $9200
Therefore the budgeted cost of goods sold for October is $9,200
Sheridan Industries reported actual sales of $2,125,000 and fixed costs of $562,275. The contribution margin ratio is 30%. Compute the margin of safety in dollars and the margin of safety ratio. (Round margin of safety ratio to 1 decimal place, e.g. 52.7.)
Answer:
Margin of safety $250,750
Margin of safety ratio 11.8%
Explanation:
Computation for the margin of safety in dollars and the margin of safety ratio
First step is calculate the Break even point in dollars
Break even point in dollars = Fixed costs / Contribution margin ratio
Break even point in dollars=$562,275/0.30
Break even point in dollars = $1,874,250
Now let determine the the margin of safety in dollars and the margin of safety ratio
Margin of safety = Actual Sales - Break even sales
Margin of safety= $2,125,000 -$1,874,250
Margin of safety=$250,750
Margin of safety ratio= Margin of safety/Actual Sales
Margin of safety ratio = $250,750/$2,125,000
Margin of safety ratio = 0.118*100
Margin of safety ratio = 11.8%
Thereforethe margin of safety in dollars and the margin of safety ratio will be:
Margin of safety $250,750
Margin of safety ratio 11.8%
Freelife, New Hampshire has a labor force of 78,567 persons and employment of 74,382. The unemployment rate for the city is: Group of answer choices 5.3%. 5.6%. 6.0%. 7.1%
Answer:
5.3%
Explanation:
There are 4,185 unemployment person(78,567-74,382)
So the rate of unemployment persons = ( the number of unemployment / the total number of persons) × 100
= (4,185/78,567) ×100
In Freelife, New Hampshire, there are 74,382 people employed and 78,567 people in the labor force. The city's unemployment rate is 5.3%.
What is the cause of unemployment?When someone is actively seeking employment even if they are employable, they are said to be unemployed. Individuals who are employed but do not have the right jobs are included in this group. One of the indices of a nation's economic health is unemployment,
which is typically calculated as the unemployment rate, which is calculated by dividing the number of jobless persons by
the total number of workers. It is common to misunderstand the definition of unemployment, which includes persons who are waiting to start working again after being discharged but excludes those who have given up seeking for a job. Those that aren't looking for work right now.
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Tobias has a brokerage account and buys on the margin, which resulted in an interest expense of $52,000 during the year. Income generated through the brokerage account was as follows: Municipal interest $104,000 Taxable dividends and interest 520,000 If required, round any division to two decimal places and use in subsequent computations. Round your final answer to the nearest dollar. How much investment interest can Tobias deduct
Answer: $43,160
Explanation:
The amount of investment interest that can be deducted is:
= Interest expense * Proportion of total income that is taxable
Municipal interest is not taxable so the proportion of total income that is taxable is:
= Taxable dividends and interest / Total income
= 520,000 / (520,000 + 104,000)
= 0.83
Amount of investment interest that is deductible:
= 52,000 * 0.83
= $43,160
How much does international trade affect you personally?
Answer:
maybe a lot for me ok
maybe you
An electronics company makes communications devices for military contracts. The company just completed two contracts. The navy contract was for 2,540 devices and took 27 workers two weeks (40 hours per week) to complete. The army contract was for 5,940 devices that were produced by 37 workers in three weeks (40 hours per week). a. Calculate the productivity for navy and army contracts in units produced per labor hour.
Answer:
Explanation:
For Navy contract, the total number of man hours put into production will be:
= 27 × 40 × 2
= 2160 man hours
Then, the units produced per labor hour will be:
= 2540 devices / 2160
= 1.176 units per labor hour.
For Army contracts, the total number of man hours put into production will be:
= 37 × 40 × 3
= 4440 man hours
Then, the units produced per labor hour will be:
= 5940/4440
= 1.338 units per labor hour.
You sold ten put contracts on Cross Town Bank stock at an option price per share of $0.85. The options have an exercise price of $39 per share. The options were exercised today when the stock price was $34 a share. What is your net profit or loss on this investment assuming that you closed out your positions at a stock price of $34
Answer:
-$4,150
Explanation:
Calculation to determine your net profit or loss on this investment
Using this formula
Net profit/Loss=(Option price per share-Exercise price+Stock price)×100×10
Let plug in the formula
Net loss = ($0.85 - $39 + $34) × 100 × 10
Net loss =-$4.15×100×19
Net loss = -$4,150
Therefore your net loss on this investment is -$4,150
g If there is a breach of contract, the objective of the remedy in the breach contract case will be to: Question 21 options: place the parties back into the position that they would have been in had there been no contract punish the party that committed breach of contract provide both parties relief place the non breaching party into the position that they would have been had the contract not been breached
Answer: place the non breaching party into the position that they would have been had the contract not been breached
Explanation:
A contract is meant to satisfy the reasons for which the contract was gone into for both parties. If one party breaches the contract, the party that did not breach should still have their reason for entering the contract satisfied because they did what they were supposed to do according to the contract.
This is why the purpose of a breach of contract remedy is to ensure that this non-breaching party does indeed get what was supposed to come to them by the contract.
Determine the missing amounts. Unit Selling Price Unit Variable Costs Unit Contribution Margin Contribution Margin Ratio 1. $650 $390 $enter a dollar amount (a) enter percentages % (b) 2. $200 $enter a dollar amount (c) $92 enter percentages % (d) 3. $enter a dollar amount (e) $enter a dollar amount (f) $805
Answer:
(a) $620
(b) 40%
(c) $208
(d) 31%
(e) $2,683
(f) $1,878
Explanation:
Use the following formula to calculate the unit contribution margin
Unit Contribution Margin = Unit Selling Price - Uni variable cost
Use the following formula to calculate the contribution margin ratio
Contribution Margin ratio = ( Unit Contribution margin / Unit Selling Price ) x 100
The working for the question is attached with this answer please find it.
The following information is available for Birch Company at December 31:
Money market fund balance $2,790
Certificate of deposit maturing June 30 of next year $10,000
Postdated checks from customers $1,475
Cash in bank account $21,430
NSF checks from customers returned by bank $650
Cash in petty cash fund $200
Inventory of postage stamps $24
U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year $5,000. Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of: ___________
Answer:
the cash and cash equivalent is $29,420
Explanation:
The computation of cash and cash equivalent is given below:
Money market fund balance $2790
Cash in Bank Account $21,430
Cash in Petty cash funds $200
U.S Treasury bill purchased on Dec.15 $5,000
cash and cash equivalent $29420
Hence, the cash and cash equivalent is $29,420
The same is to be considered and relevant too
Meyer Company reported the following for its recent year of operation:
From Income Statement:
Depreciation Expense $1,000
Loss on the Sale of Equipment (3,000)
From the comparative balance sheet:
Beginning balance, equipment $12,500
Ending balance, equipment 8,000
Beginning balance, accumulated depreciation 2,000
Ending balance, accumulated depreciation 2,600
No new equipment was purchased during the year. What was the selling price of the equipment?
Answer:
$900
Explanation:
Calculation to determine the selling price of the equipment
First step
Cost of equipment sold = Beginning balance - Ending balance
Cost of equipment sold=$12,500-$8,000
Cost of equipment sold=$4,500
Second step
Ending balance= Beginning balance + Depreciation expense - Accumulated depreciation on equipment sold
Ending balance=$2,000+$1,000-$600
Ending balance=$2,400
Third step
Book value = Cost of equipment sold - Accumulated depreciation on equipment sold
Book value=$4,500-$600
Book value=$3,900
Now let determine the selling price of the equipment
Selling price=$3,000-$3,900
Selling price=$900
Therefore the selling price of the equipment.is $900
