University Car Wash built a deluxe car wash across the street from campus. The new machines cost $255,000 including installation. The company estimates that the equipment will have a residual value of $22,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows:

Problem 7-5A Part 1

Required:

1. Prepare a depreciation schedule for six years using the straight-line method. (Do not round your intermediate calculations.)
  

2. Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate calculations.)
  

3. Prepare a depreciation schedule for six years using the activity-based method. (Round your "Depreciation Rate" to 2 decimal places and use this amount in all subsequent calculations.)

1. Pick one hypothetical company from the following choices: Auto repair shop, Retail clothing store, Furniture manufacturer, Restaurant, Landscape maintenance, Website design and maintenance. For whichever type of company, you choose, assume you own the building and have a related loan with the bank, and you sell your goods and services to customers on account (they have 60 days to pay).

State which hypothetical company you chose and provide several sentences to describe the company. You have lots of creative freedom here, so it's important to give all of us some information to help us understand what your company looks like. For example, if you choose the restaurant business, give us a description of your hypothetical restaurant (type of food, level of quality, pricing, location, etc.) so we better understand your business.

2. Pick three of the seven risk factors Credit Risk, Market Risk, Political Risk, IT Risk, Operational Risk, Legal Risk, Reputational Risk, and thoroughly describe each of the three possible risk factors for your company. Please provide at least three sentences for each risk factor for your company.

3. For each risk factor you identified, how would you go about limiting this risk?

As financial analyst, your intriguing sense wanted to identify the optimum Capital Structure enabling you to offer options to your CEO and the Management. As an analyst you decided to identify the optimal Capital Structure for the company and give your reasoning on the same

Cedarmont Clothing Limited is rapidly losing its market share to more aggressive
competitors and its CEO want to turnaround the fortunes of the company. As a
strategic management consultant, describe turnaround strategy and explain three
ways that this strategy can be employed.

What are the key leadership skills a manager should have?

Choose a CEO that you perceive as being a leader. Describe his leadership style and how it is impacting the success of his company.

What are the drivers of globalization? Describe the major changes for businesses.

Cedarmont Clothing Limited is rapidly losing its market share to more aggressive competitors and its CEO want to turnaround the fortunes of the company. As a strategic management consultant, describe turnaround strategy and explain three ways that this strategy can be employed.

In developing countries some of the working conditions are poor in comparison to the United States. Companies such as Nike go overseas to find affordable labor and supply costs. What would you do as a CEO of a company, such as Nike, to aid in improving the welfare of these countries?

Determine what the initial basis of an asset would be in the following situations:

1. purchase of asset

2. Bargain Purchase

3. Lump-sum purchase

4. Property acquired by gift

5. Property acquired from a decedent

6. Property converted from personal use to business or income-producing use

(a) ABC Company purchased land at a cost of $400,000,000 during 2018. ABC chooses to use the revaluation method of accounting for land. The fair value of the land is as follows at December 31, 2018 2019 and 2020:

2018 - $450,000,000
2019 - $360,000,000
2020 - $385,000,000

Required
(a) Record the journal entries to account for revaluation of the land at 31 December 2018, 2019 and 2020.

(b) Assume ABC Company chooses to apply the cost method for the land and that the above amounts are the recoverable amount of the land at 31 December each year. Record the necessary journal entries to account for the land at 31 December 2018, 2019 and 2020.