Question
In: Accounting
1. Holmes Packaging sold a machine for $49,500. The company bought this machine for $120,000 seven...
1. Holmes Packaging sold a machine for $49,500. The company bought this machine for $120,000 seven years ago and was depreciating it on a straight-line basis over ten years to a $12,000 salvage value. What is the gain (loss) that Holmes Packaging should report?
2. Vermont Industries, a clothing mail-order retailer, purchased a new industrial sewing machine for $156,000. This machine is expected to operate for 5 years after which it will be sold for salvage value estimated to be $9,000. What is the yearly depreciation expense under the straight-line method?
3. Perfect Pastries buys a display case for her bakery business on January 1, 2019. The case cost $36,000 and is expected to be used for ten years. At the end of the ten years it is expected that the case can be sold for $4,000. Compute the depreciation expense for the third year (2021) using both straight-line and double-declining balance depreciation methods.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Benson Company bought a machine costing $120,000 on 1 April 2015. Management estimated the useful life...
Benson Company bought a machine costing $120,000 on 1 April
2015. Management estimated the useful life to be 10 years and the
residual value to be $20,000.
On 1 January 2018, management revised the useful life and residual
value of the machine. The remaining useful life was revised to 5
years while the residual value was revised to $10,000.
The company’s financial year end is 31 December.
Compute the depreciation expense, accumulated depreciation and net
book value of the machine...
A company bought a machine on January 1, 2017 for use in operations. The machine cost...
A company bought a machine on January 1, 2017 for use in
operations. The machine cost $35,000 and the estimated residual
value was $3,000. The machine has useful life of 3 years and
produced 15,000 during 2017, 20,000 units during 2018 and 25,000
during 2019. Compute the depreciation expense under the straight
line method for 2017, 2018 and 2019. Compute the depreciation under
the units of production method for 2017, 2018 and 2019. Compute the
depreciation under the double declining...
An industrial organization has bought a specialized machine for $120,000 which will save $20,000 each year...
An industrial organization has bought a specialized machine for
$120,000 which will save $20,000 each year for 10 years. Straight
Line (SL) basis depreciation should be taken into consideration
with a depreciable life of 10 years. After tax MARR is 10% per
year. Effective income tax rate is 40%. After 10 years, the machine
will have zero salvage value. a) Draw a table showing Before Tax
Cash Flow (BTCF) and After Tax Cash Flow (ATCF). b) Calculate the
after tax...
15 minutes An industrial organization has bought a specialized machine for $120,000 which will save $20,000...
15 minutes An industrial organization has bought a specialized
machine for $120,000 which will save $20,000 each year for 10
years. Straight Line (SL) basis depreciation should be taken into
consideration with a depreciable life of 10 years. After tax MARR
is 10% per year. Effective income tax rate is 40%. After 10 years,
the machine will have zero salvage value. a) Draw a table showing
Before Tax Cash Flow (BTCF) and After Tax Cash Flow (ATCF). b)
Calculate the...
A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and...
A company is evaluating the purchase of Machine A. The new
machine would cost $120,000 and would be depreciated for tax
purposes using the straight-line method over an estimated ten-year
life to its expected salvage value of $20,000. The new machine
would require an addition of $30,000 to working capital. In each
year of Machine A’s life, the company would reduce its pre-tax
costs by $40,000. The company has a 12% cost of capital and is in
the 35% marginal...
A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and...
A company is evaluating the purchase of Machine A. The new
machine would cost $120,000 and would be depreciated for tax
purposes using the straight-line method over an estimated ten-year
life to its expected salvage value of $20,000. The new machine
would require an addition of $30,000 to working capital. In each
year of Machine A’s life, the company would reduce its pre-tax
costs by $40,000. The company has a 12% cost of capital and is in
the 35% marginal...
A company is evaluating the purchase of Machine A. The new machine would cost $120,000 and...
A company is evaluating the purchase of Machine A. The new
machine would cost $120,000 and would be depreciated for tax
purposes using the straight-line method over an estimated ten-year
life to its expected salvage value of $20,000. The new machine
would require an addition of $30,000 to working capital. In each
year of Machine A’s life, the company would reduce its pre-tax
costs by $40,000. The company has a 12% cost of capital and is in
the 35% marginal...
QUESTION 6 (15 MARKS) On 1 January 2018, Neon Bhd sold a packaging machine to Apex...
QUESTION 6
On 1 January 2018, Neon Bhd sold a packaging machine to Apex Bhd
under a hire-purchase agreement. The cost and cash price of the
packaging machine were RM18,000 and RM35,000, respectively. The
agreement required a deposit of RM7,000 and further instalments of
RM1,200 each month for 3 years starting from 31 January 2018.
On 1 December 2018, Neon Bhd discovered that Apex Bhd defaults
on payments since October 2018. After serving 'the notice of
intention to repossess' to...
ABC Company bought a new machine that cost $500,000 on 1/1/15. The machine had a useful...
ABC Company bought a new machine that cost $500,000 on 1/1/15.
The machine had a useful life of 10 years. ABC Company used
straight-line depreciation with an estimated salvage value of $0.
ABC Company is subject to an income tax rate of 40%. ABC Company
sold the machine on 1/1/18 (after using the machine for exactly 3
full years. In the next 3 questions, you are to determine the Net
Cash Inflow (NCF) from the sale of the machine on...
Noah bought a machine for $163,600, depreciated it $46,574, and sold it for $267,500. Noah’s marginal...
Noah bought a machine for $163,600, depreciated it
$46,574, and sold it for $267,500. Noah’s marginal tax rate is
32%.
What is the tax Noah will pay on the sale of the
machine?
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- K-NN and Perceptron theory question If we don’t care about the size of the TRAINING SET...
- Make a C program that simulates time-sharing in the operating system. Please follow the instructions provided:...
- What are some current challenges faced by food companies in reducing food waste?
- Arthur buys $2,200.00 worth of stock. Six months later, the value of the stock has risen...
- The Following table is based on a time study for a metal working operation Obs (minutes...
- Write a method that returns the percentage of the number of elements that have the value true...
- Jane is the financial manager for Alpha Corporation. She has been asked to perform a lease-versus-purchase...
ADVERTISEMENT