Blue Manufacturing purchased a machine on January 1, 2020 for use in its factory. Blue paid $458,000 for the machine and estimated that it had a useful life of 10 years, at the end of which time the machine was expected to have a residual value of $40,000. During its life, the machine was expected to produce 380,000 units. During 2020, the machine produced 41,800 units, and produced 58,600 in 2021. The machine was subject to a 20% CCA rate, and Blue’s year-end was December 31.
Calculate the annual depreciation amount for 2020 and 2021 under the straight-line method.
| 2020 | 2021 | |||
| Annual depreciation amount | $ 41800 | $ 41800 |
eTextbook and Media
Calculate the annual depreciation amount for 2020 and 2021 under the activity method. (Round per unit value to 2 decimal places e.g. 5.75 and final answers to 0 decimal places, e.g. 5,275.)
| 2020 | 2021 | |||
| Annual depreciation amount | $ 45980 | $ 64460 |
Calculate the annual depreciation amount for 2020 and 2021 under the double-declining balance method.
| 2020 | 2021 | |||
| Annual depreciation amount | $ ??? | $ ??? |
eTextbook and Media
Calculate the annual depreciation amount for 2020 and 2021 under the capital cost allowance method.
| 2020 | 2021 | |||
| Annual depreciation amount | $ ??? | $ ??? |
I can't get my calculations to work out for the last 2?
In: Accounting
1)
Periodically, Merrill Lynch customers are asked to evaluate Merrill Lynch financial consultants and services on a 7-point scale (7 is the maximum). You are a manager with two consultants you are trying to compare. Consultant A has 10 years of experience, whereas consultant B has 1 year of experience. You want to test if the consultant with less experience has a rating that is different than the more experienced consultant. So, you collect independent samples of service ratings for these two financial consultants. Consultant A has 11 surveys with a mean of 6.66 and standard deviation of 0.63. Consultant B has 18 surveys with a mean of 6.43 and standard deviation of 0.58. You wish to test the claim at a significance level of α=0.05α=0.05.
2)
A market research firm used a sample of individuals to rate the
purchase potential of a particular product before and after the
individuals saw a new, expensive television commercial about the
product. The purchase potential ratings were based on a 0 to 10
scale, with higher values indicating more potential to purchase the
product. You want to know if the commercial increased the mean
purchase potential rating. You will test the claim at a
significance level of αα = 0.005. To do so, you find a
sample of 36 people, you find the mean "after-before" rating to be
¯d=0.4d¯=0.4 with a standard deviation of the differences of sd=sd=
0.8.
In: Statistics and Probability
The Acme Company just bought a new machine that makes markers. In a random sample of 250 markers from the new machine, they find that 235 markers work. They want to test if the true proportion of working markers from the new machine is greater than 90%. Assuming that they use the approximate methodology, find the p-value of the test.
The Acme Company just bought a new machine that makes markers. In a random sample of 250 markers from the new machine, they find that 240 markers work. They want to test if the true proportion of working markers from the new machine is greater than 90%. Which is the correct alternative hypothesis?
| 1. |
Ha: p = 0.90 |
|
| 2. |
Ha: p ≤ 0.90 |
|
| 3. |
Ha: p < 0.90 |
|
| 4. |
Ha: p > 0.90 |
The Acme Company just bought a new machine that makes markers. They want to test if the true proportion of working markers from the new machine is greater than 90% at the 5% significance level. They take a random sample of 250 markers from the new machine. They find a test statistic of 2.108 with a p-value of 0.0175. Which is the correct conclusion?
| 1. |
There is sufficient evidence at the 5% significance level to support the claim that the sample proportion of working markers from the new machine is less than 90%. |
|
| 2. |
There is sufficient evidence at the 5% significance level to support the claim that the proportion of all working markers from the new machine is more than 90%. |
|
| 3. |
There is not sufficient evidence at the 5% significance level to support the claim that the sample proportion of working markers from the new machine is more than 90%. |
|
| 4. |
There is sufficient evidence at the 5% significance level to support the claim that the sample proportion of working markers from the new machine is more than 90%. |
A golf instructor is trying out a new technique for teaching her students. She randomly selects twenty of her students. She records the score of each student before the new technique and after the new technique. Is there evidence at α = 0.05 that true mean scores before and after the technique are different? Justify fully! You can assume normal populations where needed. She does not know which test to run, so she runs two. The outputs are given. Which is the correct design and conclusion?
Matched Pairs Design Welch’s (Independent) T Test
Test Statistic = 2.268 Test Statistic = 1.218
p-value = 0.035 p-value = 0.231
| 1. |
Using the Welch’s design, there is sufficient evidence at the 5% significance level to support the claim that the true before and after means are different. |
|
| 2. |
Using the Welch’s design, there is not sufficient evidence at the 5% significance level to support the claim that the true before and after means are different. |
|
| 3. |
Using the matched pairs design, there is not sufficient evidence at the 5% significance level to support the claim that the true before and after means are different. |
|
| 4. |
Using the matched pairs design, there is sufficient evidence at the 5% significance level to support the claim that the true before and after means are different. |
In: Statistics and Probability
You own goods A and B. You are considering increasing price of good A by 10%. Here is the information you have
Pa = 20
Qa = 1000
For each $1 increase in Pa, Qa will decrease by 100.
Pb = 12
Qb = 750
For each $1 increase in Pa, Qb will increase by 100.
(The point of this exercise is to have you do everything the long way then use the delta r formula so you can see the difference)
a . What is Total revenue of A before the price change?
b. What is total revenue of A after the price change?
c . What is Total revenue of B before the price change?
d. What is total revenue of B after the price change?
e. What is the change of revenue for A after the price changes?
f. What is the change or revenue for B after the price changes?
g. What is change in total revenue for both goods after price changes?
h. What is the own price elasticity for good A?
i. What is the cross price elasticity of A and B?
j. Calculate the change of revenue using the formula ∆ r =[ Rx (1 + EQx,Px) + Ry(EQy,Px)]%∆Px.
k. Explain why the two methods have different answers.
l. To calculate the change in total revenue from the price change, which method do you prefer? Doing parts a-g or doing part h-j? Briefly explain.
Only h-l
In: Economics
You own goods A and B. You are considering increasing price of good A by 10%. Here is the information you have Pa = 20 Qa = 1000 For each $1 increase in Pa, Qa will decrease by 100. Pb = 12 Qb = 750 For each $1 increase in Pa, Qb will increase by 100. (The point of this exercise is to have you do everything the long way then use the delta r formula so you can see the difference) a . What is Total revenue of A before the price change? b. What is total revenue of A after the price change? c . What is Total revenue of B before the price change? d. What is total revenue of B after the price change? e. What is the change of revenue for A after the price changes? f. What is the change or revenue for B after the price changes? g. What is change in total revenue for both goods after price changes? h. What is the own price elasticity for good A? i. What is the cross price elasticity of A and B? j. Calculate the change of revenue using the formula provided in class. k. Explain why the two methods have different answers. l. To calculate the change in total revenue from the price change, which method do you prefer? Doing parts a-g or doing part h-j? Briefly explain.
In: Economics
Problem 23-04
Sarasota Company had the following information available at the end of 2020.
|
SARASOTACOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$9,950 |
$4,010 |
||||
| Accounts receivable |
20,550 |
12,960 |
||||
| Short-term investments |
21,830 |
29,800 |
||||
| Inventory |
42,340 |
35,030 |
||||
| Prepaid rent |
2,990 |
12,090 |
||||
| Prepaid insurance |
2,090 |
91 |
||||
| Supplies |
990 |
75 |
||||
| Land |
124,970 |
174,030 |
||||
| Buildings |
353,000 |
353,000 |
||||
| Accumulated depreciation—buildings |
(104,980 |
) |
(86,810 |
) |
||
| Equipment |
522,130 |
396,610 |
||||
| Accumulated depreciation—equipment |
(128,890 |
) |
(111,580 |
) |
||
| Patents |
44,790 |
49,520 |
||||
| Total assets |
$911,760 |
$868,826 |
||||
| Accounts payable |
$21,970 |
$31,740 |
||||
| Income taxes payable |
5,030 |
3,980 |
||||
| Salaries and wages payable |
4,980 |
3,020 |
||||
| Short-term notes payable |
10,080 |
10,080 |
||||
| Long-term notes payable |
60,150 |
70,050 |
||||
| Bonds payable |
396,540 |
396,540 |
||||
| Premium on bonds payable |
23,170 |
27,926 |
||||
| Common stock |
241,390 |
218,640 |
||||
| Paid-in capital in excess of par—common stock |
25,100 |
17,500 |
||||
| Retained earnings |
123,350 |
89,350 |
||||
| Total liabilities and stockholders’ equity |
$911,760 |
$868,826 |
||||
|
SARASOTA COMPANY |
||||||
| Sales revenue |
$1,170,900 |
|||||
| Cost of goods sold |
752,630 |
|||||
|
418,270 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$78,540 |
|||||
| Administrative expenses |
156,760 |
|||||
| Depreciation/Amortization expense |
40,210 |
|||||
| Total operating expenses |
275,510 |
|||||
| Income from operations |
142,760 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,960 |
|||||
| Gain on sale of short-term investment |
4,000 |
|||||
| Dividend revenue |
2,380 |
|||||
| Interest expense |
(51,710 |
) |
(37,370 |
) |
||
| Income before taxes |
105,390 |
|||||
| Income tax expense |
39,370 |
|||||
| Net income |
66,020 |
|||||
| Dividends to common stockholders |
(32,020 |
) |
||||
| To retained earnings |
$34,000 |
|||||
Prepare a statement of cash flows for Sarasota Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting
Problem 23-04
Sarasota Company had the following information available at the end of 2020.
|
SARASOTACOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$9,950 |
$4,010 |
||||
| Accounts receivable |
20,550 |
12,960 |
||||
| Short-term investments |
21,830 |
29,800 |
||||
| Inventory |
42,340 |
35,030 |
||||
| Prepaid rent |
2,990 |
12,090 |
||||
| Prepaid insurance |
2,090 |
91 |
||||
| Supplies |
990 |
75 |
||||
| Land |
124,970 |
174,030 |
||||
| Buildings |
353,000 |
353,000 |
||||
| Accumulated depreciation—buildings |
(104,980 |
) |
(86,810 |
) |
||
| Equipment |
522,130 |
396,610 |
||||
| Accumulated depreciation—equipment |
(128,890 |
) |
(111,580 |
) |
||
| Patents |
44,790 |
49,520 |
||||
| Total assets |
$911,760 |
$868,826 |
||||
| Accounts payable |
$21,970 |
$31,740 |
||||
| Income taxes payable |
5,030 |
3,980 |
||||
| Salaries and wages payable |
4,980 |
3,020 |
||||
| Short-term notes payable |
10,080 |
10,080 |
||||
| Long-term notes payable |
60,150 |
70,050 |
||||
| Bonds payable |
396,540 |
396,540 |
||||
| Premium on bonds payable |
23,170 |
27,926 |
||||
| Common stock |
241,390 |
218,640 |
||||
| Paid-in capital in excess of par—common stock |
25,100 |
17,500 |
||||
| Retained earnings |
123,350 |
89,350 |
||||
| Total liabilities and stockholders’ equity |
$911,760 |
$868,826 |
||||
|
SARASOTA COMPANY |
||||||
| Sales revenue |
$1,170,900 |
|||||
| Cost of goods sold |
752,630 |
|||||
|
418,270 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$78,540 |
|||||
| Administrative expenses |
156,760 |
|||||
| Depreciation/Amortization expense |
40,210 |
|||||
| Total operating expenses |
275,510 |
|||||
| Income from operations |
142,760 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,960 |
|||||
| Gain on sale of short-term investment |
4,000 |
|||||
| Dividend revenue |
2,380 |
|||||
| Interest expense |
(51,710 |
) |
(37,370 |
) |
||
| Income before taxes |
105,390 |
|||||
| Income tax expense |
39,370 |
|||||
| Net income |
66,020 |
|||||
| Dividends to common stockholders |
(32,020 |
) |
||||
| To retained earnings |
$34,000 |
|||||
Prepare a statement of cash flows for Sarasota Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting
The following data relate to the Plant Assets account of
Tamarisk Inc. at December 31, 2019:
| A | B | C | D | |||||||||
| Original cost | $46,900 | $51,850 | $68,000 | $73,000 | ||||||||
| Year purchased | 2014 | 2015 | 2016 | 2017 | ||||||||
| Useful life | 10 | years | 17,000 | hours | 15 | years | 10 | years | ||||
| Residual value | $4,800 | $4,250 | $8,000 | $4,700 | ||||||||
| Depreciation method | straight-line | activity | straight-line | double-declining | ||||||||
| Accumulated depreciation through 2019 | $21,050 | $28,100 | $12,000 | $26,280 | ||||||||
Note: In the year an asset is purchased, Tamarisk does not record
any depreciation expense on the asset. In the year an asset is
retired or traded in, Tamarisk takes a full year’s depreciation on
the asset.
The following transactions occurred during 2020:
| 1. | On May 5, Asset A was sold for $16,750 cash. The company’s bookkeeper recorded this retirement as follows: |
|
Account Titles and Explanation |
Debit |
Credit |
|
Cash |
16,750 |
|
|
Asset A |
16,750 |
| 2. | On December 31, it was determined that Asset B had been used 3,100 hours during 2020. | |
| 3. | On December 31, before calculating depreciation expense on Asset C, Tamarisk management decided that Asset C’s remaining useful life should be nine years as of year end. | |
| 4. | On December 31, it was discovered that a piece of equipment purchased in 2019 had been expensed completely in that year. The asset cost $35,000, had a useful life of 10 years when it was acquired, and had no residual value. Management has decided to use the double-declining-balance method for this asset, which can be referred to as “Asset E.” Ignore income taxes. |
Prepare any necessary adjusting journal entries required at
December 31, 2020, as well as any entries to record depreciation
for 2020.
(To record depreciation on Asset A) (To record disposal of Asset A) (To record depreciation on Asset B) (To record cost of Asset E) (To record depreciation on Asset E) (To record depreciation on Asset D)
| (To record depreciation on Asset C) |
In: Accounting
Alex Company reported the following information for
2020.
| Alex
Company Comparative Balance Sheets December 31 |
||||||||
| Assets | 2020 | 2019 |
Change Increase/Decrease |
|||||
| Cash | $59,000 | $36,000 | $23,000 | Increase | ||||
| Accounts receivable | 62,000 | 22,000 | 40,000 | Increase | ||||
| Inventory | 44,000 | –0– | 44,000 | Increase | ||||
| Prepaid expenses | 6,000 | 4,000 | 2,000 | Increase | ||||
| Land | 55,000 | 70,000 | 15,000 | Decrease | ||||
| Buildings | 200,000 | 200,000 | –0– | |||||
| Accumulated depreciation—buildings | (21,000) | (14,000) | 7,000 | Increase | ||||
| Equipment | 183,000 | 68,000 | 115,000 | Increase | ||||
| Accumulated depreciation—equipment | (28,000) | (10,000) | 18,000 | Increase | ||||
| Totals | $560,000 | $376,000 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Accounts payable | $43,000 | $40,000 | $3,000 | Increase | ||||
| Accrued expenses payable | –0– | 10,000 | 10,000 | Decrease | ||||
| Bonds payable | 100,000 | 150,000 | 50,000 | Decrease | ||||
| Common stock ($1 par) | 230,000 | 60,000 | 170,000 | Increase | ||||
| Retained earnings | 187,000 | 116,000 | 71,000 | Increase | ||||
| Totals | $560,000 | $376,000 | ||||||
| Alex
Company Income Statement For the Year Ended December 31, 2020 |
||||
| Sales revenue | $941,000 | |||
| Cost of goods sold | $475,000 | |||
| Operating expenses | 231,000 | |||
| Interest expense | 12,000 | |||
| Loss on disposal of plant assets | 2,000 | 720,000 | ||
| Income before income taxes | 221,000 | |||
| Income tax expense | 65,000 | |||
| Net income | $156,000 | |||
Additional information:
| 1. | Operating expenses include depreciation expense of $40,000. | |
| 2. | Land was sold at its book value for cash. | |
| 3. | Cash dividends of $85,000 were declared and paid in 2020. | |
| 4. | Equipment with a cost of $166,000 was purchased for cash. Equipment with a cost of $51,000 and a book value of $36,000 was sold for $34,000 cash. | |
| 5. | Bonds of $50,000 were redeemed at their face value for cash. | |
| 6. | Common stock ($1 par) of $170,000 was issued for cash. |
Use this information to Prepare a statement of cash flows using the
indirect method. (Show amounts that decrease cash flow
with either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
|
|
||||
In: Accounting
Sandhill Company had the following information available at the
end of 2020.
|
SANDHILLCOMPANY |
||||||
|
2020 |
2019 |
|||||
| Cash |
$10,100 |
$4,020 |
||||
| Accounts receivable |
20,580 |
12,830 |
||||
| Short-term investments |
22,020 |
29,750 |
||||
| Inventory |
42,390 |
34,710 |
||||
| Prepaid rent |
3,020 |
12,030 |
||||
| Prepaid insurance |
2,100 |
89 |
||||
| Supplies |
1,000 |
74 |
||||
| Land |
125,640 |
176,140 |
||||
| Buildings |
347,130 |
347,130 |
||||
| Accumulated depreciation—buildings |
(104,250 |
) |
(87,940 |
) |
||
| Equipment |
530,080 |
398,810 |
||||
| Accumulated depreciation—equipment |
(130,600 |
) |
(111,650 |
) |
||
| Patents |
44,570 |
49,920 |
||||
| Total assets |
$913,780 |
$865,913 |
||||
| Accounts payable |
$22,110 |
$32,240 |
||||
| Income taxes payable |
5,010 |
4,010 |
||||
| Salaries and wages payable |
5,000 |
2,990 |
||||
| Short-term notes payable |
10,010 |
10,010 |
||||
| Long-term notes payable |
59,650 |
70,450 |
||||
| Bonds payable |
402,050 |
402,050 |
||||
| Premium on bonds payable |
19,870 |
21,533 |
||||
| Common stock |
241,660 |
220,690 |
||||
| Paid-in capital in excess of par—common stock |
24,940 |
17,540 |
||||
| Retained earnings |
123,480 |
84,400 |
||||
| Total liabilities and stockholders’ equity |
$913,780 |
$865,913 |
||||
|
SANDHILL COMPANY |
||||||
| Sales revenue |
$1,161,810 |
|||||
| Cost of goods sold |
753,770 |
|||||
|
408,040 |
||||||
| Gross margin | ||||||
| Operating expenses | ||||||
| Selling expenses |
$79,370 |
|||||
| Administrative expenses |
150,640 |
|||||
| Depreciation/Amortization expense |
40,610 |
|||||
| Total operating expenses |
270,620 |
|||||
| Income from operations |
137,420 |
|||||
| Other revenues/expenses | ||||||
| Gain on sale of land |
7,980 |
|||||
| Gain on sale of short-term investment |
4,040 |
|||||
| Dividend revenue |
2,410 |
|||||
| Interest expense |
(51,610 |
) |
(37,180 |
) |
||
| Income before taxes |
100,240 |
|||||
| Income tax expense |
39,060 |
|||||
| Net income |
61,180 |
|||||
| Dividends to common stockholders |
(22,100 |
) |
||||
| To retained earnings |
$39,080 |
|||||
Prepare a statement of cash flows for Sandhill Company using the
direct method accompanied by a reconciliation schedule. Assume the
short-term investments are debt securities, classified as
available-for-sale.
In: Accounting