BUSINESS COLLEGE

Tidy Limited purchased a new van on January 1, 2018. The van cost $40,000. It has an estimated life of ten years and the estimated residual value is $3,500. Tidy uses the double-declining-balance method to compute depreciation. What is the adjusted balance in the Accumulated Depreciation account at the end of 2019

Answers

Answer 1

Answer:

Answer:

$33,600

Explanation:

The computation is shown below:

But first we have to determined the following things

Depreciation rate

= 1 ÷ useful life

= 1 ÷ 10

= 0.1

It is double-declining so the rate is also double i.e. 0.20

Now in the first year, the depreciation expense is

= $40,000 × 0.20

= $8,000

Now in the second year, the depreciation is

= ($40,000 - $8,000) × 0.20

= $25,600

So, the accumulated depreciation at the end of 2019 is

= $8,000 + $25,600

= $33,600

Here the residual value is not relevant. hence, ignored it

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Answers

Answer:

ANSWER IS BELOW :)

Explanation:

Tbh im not sure, but I think its 10(5)+65

Which of these statements about corporate bonds is correct?

Answers

Answer:

Option A is the right answer.

Explanation:

Bonds seems to be debt security during which the lender is obliged to pay compensation at regular time intervals as well as pay the money back the balance of the shareholder at intellectual ability.

Option B: The raising of new bonds diminishes underlying ownership within the company. Incorrect issuance of new equities diminishes the company's current ownership.
Option C: Debenture bonds attached leverage on the assets guaranteed. Incorrect debentures represent short term loans.
Option D: Bonds focuses on providing funding for equities. Incorrect since debt funding is provided by Bonds.

So that alternative A would be the appropriate choice.

Bonds are like IOUS with a promise to repay the amount borrowed, with interest, on a certain date. Thus, option A is correct.

Bonds appear to be a type of financial instrument where the lender is required to provide periodical payments of compensation as well as to reimburse the shareholder for their remaining amount at the investor's intellectual discretion.

An Iou-like financial obligation is a bond. By purchasing corporate bonds, investors are making a loan to the corporation issuing the connection. Bonds usually provide investors with a fixed rate of interest that is paid over a specified period of time at periodic times. In general, bonds are a less risky investment. Therefore, option A is correct.

Learn more about Bonds, here:

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Pei's savings account balance is $12,000 today. Pei opened the account exactly 7 years ago with a $10,000 deposit. Pei has made no other deposits or withdrawals. What annual interest rate (compounded annually) has the account earned?

Answers

Answer:

2.64%

Explanation:

A = P(1 + r)^n

A = $12,000

P = $10,000

n = 7 years

12,000 = 10,000(1 + r)^7

(1 + r)^7 = 12,000/10,000 = 1.2

(1 + r)^7 = 1.2

1 + r = (1.2)^1/7

I + r = 1.0264

r = 1.0264 - 1 = 0.0264

r = 0.0264 × 100 = 2.64%

Harper, Inc. acquires 40 percent of the outstanding voting stock of Kinman Company on January 1, 2017, for $210,000 in cash. The book value of Kinman’s net assets on that date was $400,000, although one of the company’s buildings, with a $60,000 carrying amount, was actually worth $100,000. This building had a 10-year remaining life. Kinman owned a royalty agreement with a 20-year remaining life that was undervalued by $85,000. Kinman sold inventory with an original cost of $60,000 to Harper during 2017 at a price of $90,000. Harper still held $15,000 (transfer price) of this amount in inventory as of December 31, 2017. These goods are to be sold to outside parties during 2018. Kinman reported a $40,000 net loss and a $20,000 other comprehensive loss for 2017. The company still manages to declare and pay a $10,000 cash dividend during the year. During 2018, Kinman reported a $40,000 net income and declared and paid a cash dividend of $12,000. It made additional inventory sales of $80,000 to Harper during the period. The original cost of the merchandise was $50,000. All but 30 percent of this inventory had been resold to outside parties by the end of the 2018 fiscal year. Prepare all journal entries for Harper for 2017 and 2018 in connection with this investment. Assume that the equity method is applied.

Answers

Answer:

Harper investment 160,000

building over fair value 16,000

royalty over fair value 34,000

cash 200,000

----

2017 entries:

loss on Harper Investment 32,000

Harper investment 32,000

---

Cash 4,000

Harper investment 4,000

----

Unrealized gain 2,000

Harper Investment 2,000

---

royalty over fair value 1,700

bulding over fair value 1,600

harper investment 3,300

---

2018 entries:

Harper Investment 16,000

Gain on Harper Investent 16,000

----

Cash 4800

Harper investment 4800

----

Unrealized gain 1,600

Harper Investment 1,600

---

royalty over fair value 1,700

bulding over fair value 1,600

harper investment 3,300

Explanation:

400,000 x 40% = 160,000

40,000 increase infair value of building x 40% = 16,000

royalty 85,000 x 40% = 34,000

total equity value 200,000

payment of 200,000

no goodwill.

amortization:

building: 16,000 / 10 = 1,600

royalty: 34,000 / 20 = 1,700

2017

loss: 60,000 x 40% = (32,000)

dividends 10,000 x 40% = (4,000)

unrealized gain: it kept 15,000/90,000 = 0.1667 = 16.67%

90,000 - 30,000 = 30,000 gain x 16.67% = 5,000 unrealized gain

5,000 x 40% = 2,000

2018

income 40,000 x 40% = 16,000

dividends 12,000 x 40% = (4,800)

unrealized gain kept 30%

80,000 - 50,000 = 30,000 x 30% = 9,000

the company has 40% so 9,000 x 40% = 3,600 unrealized

as we recognize 2,000 before we adjust for the difference of 1,600

Hayes Corp. is a manufacturer of truck trailers. On January 1, 2021, Hayes Corp. leases ten trailers to Lester Company under a six-year non-cancelable lease agreement. The following information about the lease and the trailers is provided: 1) Annual payment of $120,175 is due on January 1, 2021 and at December 31 from 2021 to 2025. Hayes Corp. has an implicit rate of 8% (present value factor for 6 periods at 8% is 4.99271). 2) Titles to the trailers pass to Lester at the end of the lease. 3) The fair value of each trailer is $60,000. The cost of each trailer to Hayes Corp. is $54,000. Each trailer has an expected useful life of nine years. 4) Collectibility of the lease payments is probable. Instructions (a) What type of lease is this for the Lester Company and Hayes Corp? (b) Prepare a lease amortization schedule for Lester Company till 12/31/2021. (c) Prepare the journal entries for Lester Company on 1/1/2021 and 12/31/2021. Round all amounts to the nearest dollar.

Answers

Answer:

FINANCING LEASE.

$\left[\begin{array}{cccccc}YEAR&Beginning&Cuota&Interest&amortization&Ending\n0&600000&120175&0&120175&479825\n1&479825&120175&38386&81789&398036\n2&398036&120175&31842.88&88332.12&309703.88\n3&309703.88&120175&24776.31&95398.69&214305.19\n4&214305.19&120175&17144.42&103030.58&111274.61\n5&111274.61&120175&8901.97&111273.03&1.58\n\end{array}\right]$

trailer 600,000 debit

lease liability 479,825 credit

cash 120,175 credit

--to record Jan 1st entry--

interest expense 38,386 debit

lease liability 81,789 credit

cash 120,175 credit

--to record Dec 31st entry--

Explanation:

The lease is for more than half of the asset useful life. Also, it has a present value equal to the fair value of the trailer. Also, ownership is acquired at the end of the lease life.

To build the schedule we calculate the interest on the principal

then, we subtract that from the installment to get the principal amortization and solve for the remaining at year-end

we repeat this procedure during the life of the lease.

Jan 1st, 2021

the journal entries will recognize the lease liability, the cash from the first payment, and the trailers received

Dec 31st, 2021

Here we must recognize the interest expense as well as the decrease in the lease liability.

Sarah and Jane formed a partnership with capital contributions of $210,000 and $123,000, respectively. Peter contributed $86,000 to acquire an ownership interest of 12% in the new partnership. How much is the total bonus for the existing partners?