On January 1, Year 1, Milton Manufacturing Company purchased equipment with a list price of $88,000. A total of $4,000 was paid for installation and testing. During the first year, Milton paid $6,000 for insurance on the equipment and another $2,200 for routine maintenance and repairs. Milton uses the units-of-production method of depreciation. Useful life is estimated at 100,000 units, and estimated salvage value is $8,000. During Year 1, the equipment produced 13,000 units. What is the amount of depreciation for Year 1?

Answers

Answer 1

Answer:

Answer:

The depreciation expense for Year 1 is $9880

Explanation:

The cost of equipment to be recorded in the books is the price at which it was purchased and the cost incurred to bring it to intended use that is the installation cost. Thus, the cost of the equipment in the books will be recorded as,

Equipment = 88000 + 4000 = $84000

The insurance and maintenance are recurring expenses and are not capitalized.

The depreciation rate under units of production method is,

Depreciation rate = (cost - salvage value) / estimated useful life in units

Depreciation rate = (84000 - 8000) / 100000 = $0.76 per unit

The depreciation expense for Year 1 = 0.76 * 13000 = $9880

Answer 2

Answer:

Answer:

$10,920

Explanation:

Cost of equipment = List price of equipment + Cost of installation and testing

$88,000 + $4,000 = $92,000

Salvage value = $8,000

Depreciation cost of equipment = Cost of equipment - salvage value

$92,000 - $8,000 = $84,000

Estimated unit of production = 100,000 units

Year 1 units produced = 13,000 units

Depreciation = $84,000 * 13,000 / 100,000

= $10,920

Related Questions

On July 23 of the current year, Dakota Mining Co. pays $6,165,600 for land estimated to contain 8,808,000 tons of recoverable ore. It installs machinery costing $1,849,680 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 488,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.Required:Prepare entries to record the following:_______.(a)To record the purchase of the land.(b)To record the cost and installation of machinery.(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.(d)To record the first five months' depreciation on the machinery.
45) According to the text, the most logical budget-setting method in advertising is the method A) adaptive-control B) objective-and-task C) competitive-parity D) affordable E) percentage-of-sales 46) Which of the following is a disadvantage of using online, mobile, and social media for advertising? A) The costs are high B) Audience selectivity is low. C) The audience controls ad exposure. D) The interactive capabilities are low, I E) There is little scope for personalization
Garfield Industries is expanding its operations throughout the Southeast United States. Garfield anticipates that the expansion will increase sales by $1,000,000, and increase the costs of goods sold by $700,000. Depreciation expenses will rise by $50,000 and interest expense will increase by $150,000. The company’s tax rate will remain at 40 percent. If the company’s forecast is correct, how much will net income increase or decrease, as a result of the expansion?
A company finds that there is a linear relationship between the amount of money that it spends on advertising and the number of units it sells. If it spends no money on advertising, it sells units. For each additional spent, an additional units are sold. (a) If is the amount of money that the company spends on advertising, find a formula for , the number of units sold as a function of .
The S&P 500 index delivered a return of 10%, 15%, 15%, and -30% over four successive years. What is the arithmetic average annual return for four years? A) 3.00% B) 3.50% C) 2.25% D) 2.50%

A bond has a standard deviation of 10.7 percent and an average rate of return of 6.4 percent. What is the coefficient of variation (CoV)

Answers

Answer:

CoV = 1.671875 rounded off to 1.67

Explanation:

The coefficient of variation (CoV) is a measure of volatility of an investment. It tells the volatility in comparison with the expected return from the investment. We can say that the CoV tells us the risk per unit of return as CoV is calculated by dividing standard deviation, which is a measure of risk, by the expected return of the investment.

CoV = SD / r

Where,

SD is the standard deviation
r is the expected return

CoV = 0.107 / 0.064

CoV = 1.671875 rounded off to 1.67

What are the steps for the software engineering institute model for risk management? Select one:
a. Identify, analyze, plan, track, and control
b. Analyze, track, identify, plan, and control
c. Identify assets, threats, vulnerabilities, and exposure factor
d. Cost benefit analysis, control, and review

Answers

Answer:

Explanation:

Identify, analyze, plan, track, and control

Peter Billington Stereo, Inc., supplies car radios to auto manufacturers and is going to open a new plant. The company is undecided between Detroit and Dallas as the site. The fixed costs in Dallas are lower due to cheaper land costs, but the variable costs in Dallas are higher because shipping distances would increase. Dallas Detroit Fixed costs $ 560 comma 000 $ 780 comma 000 Variable costs $ 30/radio $ 22/radioa) Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above ▼ radios.
b) Dallas's fixed costs have increased by 10%. Based on the analysis of the volume, after rounding the numbers to the nearest whole number, Dallas is best below and Detroit is best above ▼ 27,500 7,000 24,600 76,996 20,500 radios.

Answers

Answer: a) below 27,500 units Dallas is best. Above, Detroit is best.

b) below 20,500 units Dallas is best. Above, Detroit is best.

Explanation:

To calculate we shall be using the Point of Indifference Value.

Now, let's borrow x from Algebra and denote it as the Quantity (Q) where the cost of the 2 processes are equal..

a) Total cost = Fixed Costs + ( Variable cost * Q)

Dallas Total Cost = 560,000 + 30x

Detroit Total Cost = 780,000 + 22x

Equating them we get,

560,000 + 30x = 780,000 + 22x

8x = 220,000

x = 27,500 units.

Below 27,500 radio units then Dallas would be preferable due to lower fixed costs. Above 27,500 radio though then Detroit would be better due to lower Variable costs.

b) Dallas costs rise by 10%

= 560,000(1 + 0.1)

= $616,000 is their new cost.

Using the same methodology as A above we say,

616,000 + 30x = 780,000 + 22x

8x = 164,000

x = 20,500 units.

Below 20,500 radio units then Dallas would be preferable due to lower fixed costs. Above 20,500 radio though then Detroit would be better due to lower Variable costs.

If you need any clarification do react or comment.

Expenditures for consumer goods and services $4,565 Exports $740
Government purchases of goods and services $1,465
Social Security taxes $510
Net investment $225
Indirect business taxes $520
Imports $825
Gross investment $865
Corporate income taxes $185
Personal income taxes $750
Corporate retained earnings $45
Net foreign factor income $20
Government transfer payments to households $690
Net interest payments to households $0
On the basis of Table, depreciation is
a. $640 billion.
b. $50 billion.
c. $85 billion.
d. $690 billion.

Answers

Answer:

a. $640 billion.

Explanation:

Net investment = $225

Gross investment = $865

Depreciation = Gross investment - Net investment = $865 - $225 = $640

Therefore, on the basis of Table, depreciation is a. $640 billion.

The current (year 0) price of the shares of Company XYZ is $50. There are 1 million shares outstanding. Next year (year 1)’s dividend per share is $2, which represents a 60% payout from earnings (net income). Investors expect a ROE of 20%, and a constant growth. 1. What will be the dividend per share in year 2 and year 3?

2. What is the current market value of the firm?

3. What will be the value of the firm next year after the payout?

Answers

Answer:

1. The dividend per share in year 2 would be $2.16.

The dividend per share in year 3 would be $2.3328

2. The market value of the firm is $50 million

3. The value of the firm next year after the payout is $ 54

Explanation:

1. In order to calculate the dividend per share in year 2 and the dividend per share in year 3 we would have to make the following calculation:

dividend per share in year 2=dividend per share in year 1*(1+Growth Rate)

dividend per share in year 1=$2

Growth Rate=Retention Ratio * ROE

Growth Rate=40% * 20%

Growth Rate=8%

Therefore, dividend per share in year 2=$2*(1+8%)

dividend per share in year 2=$2.16

dividend per share in year 3=dividend per share in year 2*(1+Growth Rate)

dividend per share in year 3=$2.16(1´8%)

dividend per share in year 3=$2.3328

2. In order to calculate the current market value of the firm we would have to make the following calculation:

market value of the firm=Currect Share Price * Number of outstanding shares

According to the given data:

Currect Share Price=$50

Number of outstanding shares=1 million shares

market value of the firm=$50*1 million shares

market value of the firm=$50 million

3. In order to calculate the value of the firm next year after the payout we would have to calculate first the rate of return as follows:

value of the firm =dividend per share in year 1/rate of return-growth rate

$50* Rate of Return - 4 = $2

Rate of Return = 6 / 50

Rate of Return =12%

Therefore, value of the firm next year after the payout=dividend per share in year 2/rate of return-growth rate

value of the firm next year after the payout=$2.16/0.12-0.08

value of the firm next year after the payout=$ 54

Refer to the scenario above. If the terms of trade are 1.5 kilos of cloudberries for a kilo of salted cod, the terms of trade are ________

Answers

Answer:

B. Advantageous for both Norway and Sweden.

Explanation:

The full question is missing but have been attached as picture below.

Options Includes "A. advantageous for Norway but not for Sweden, B. advantageous for both Norway and Sweden, C. advantageous for Sweden but not for Norway, D. not advantageous for either Norway or Sweden"

Norway's opportunity cost of salted cod is 1 cloud berries and 2 cloud berries for Sweden. Since the international price lies between Norway's and Sweden's opportunity cost, it is beneficial for both of them.

Final answer:

The terms of trade in the asked scenario are 1.5 kilos of cloudberries for a kilo of salted cod. It's the rate at which these goods are exchanged for one another.

Explanation:

The term 'Terms of Trade' in economics is used to define the rate at which one country's goods are exchanged for another's. In the given scenario, the terms of trade are established at 1.5 kilos of cloudberries for a kilo of salted cod. This indicates that, in this specific situation, 1.5 kilos of cloudberries are considered equivalent in value to a kilo of salted cod. The ratio of the exchange (1.5:1 in this case) is what's referred to as the terms of trade.

Learn more about Terms of Trade here:

brainly.com/question/19184485

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Mars Inc. has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PB0 report from the actuary. The following information was included in the report: ending PBO, $110,000 benefits paid to retirees. $10,000, interest cost, $7,200. The discount rate applied by the actuary was 8%. What was the beginning PBO? A) $100,000 B) $112,000. C) $90,000. D) $107,200.

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Bonds are issued on June 1 that have interest payment dates of April 1 and October 1. Bond interest expense for the year ended December 31, 2009, is for a period of: A. Three months. B. Four months. C. Six months. D. Seven months.