Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Assume you are one of three members of the accounting staff working for a small, private company. At the beginning of this year, the company expanded into a new industry by acquiring equipment that will be used to make several new lines of products. The owner and general manager of the company has indicated that, as one of the conditions for providing financing for the new equipment, the company's bank will receive a copy of the company's annual finance statements. Another condition of the loan is that the company's total assets cannot fall below $250,000. Violation of this condition gives the bank the option to demand immediate repayment of the loan. Before making the adjustment for this year's depreciation, the company's total assets are reported at $255,000. The owner has asked you to take a look at the facts regarding the new equipment and "work with the numbers to make sure everything stays onside with the bank." A depreciation method has yet not been adopted for the new equipment. Equipment used in other parts of the company is depreciated using the double-declining-balance method. The cost of new equipment was $35,000 and the manager estimates it will be worth "at least $7,000" at the end of its four-year useful life. Because the products made with the new equipment are only beginning to catch on with consumers, the company used the equipment to produce just 4,000 units this year. It is expected that, over all four years of its useful life, the new equipment will make a total of 28,000 units. Required: 1. Calculate the depreciation that would be reported this year under each of the three methods shown in this chapter. Which of the methods would meet the owner's objective? 2. Evaluate whether it is ethical to recommend that the company use the method identified in requirement 1. What two parties are most directly affected by this recommendation? How would each party be benefited or harmed by the recommendation? Does the recommendation violate any laws or applicable rules? Are there any other factors that you would consider before making a recommendation?
Prepare an amortization table use the straight-line method to amortize the premium.
The bonds mature on January 1, 2019. Solo paid $50,000 in bond issue costs. Solo uses straight-line amortization. The amount of interest expense for the year is:
A company grosses $100 million per year and shows a 12 percent profit. It hires a security director, a security staff, and security equipment, which costs the company $2 million per year but reduces its losses, or "shrinkage," from 9 percent to 5 ..
comstock company purchased 1000 units of its product for 6 per unit. comstock sold 800 units for 10 per unit.a. what
Wishbone Company maintains two separate accounts payable computer systems. One is known to all the users, and is used to process payments to vendors.
a difference between actual costs and planned costs.should be investigated if the amount is exceptional. indicates that
On September 1, 2009, Barrett Corporation signed a one-year, 8% interest-bearing note payable for $50,000. Assume that Barrett Corporation maintains its books on a calendar year basis. What amount should Barrett Corp. record as interest expense fo..
On December 16, 2008, the company's controller made a preliminary estimate of the predetermined overhead rate for the year 2009. The new rate was based on the estimated total manufacturing overhead cost of $3,402,000 and the estimated 63,000 total..
sunshine cosmetics corporation needs to acquire new facilities and is currently considering two opportunities one
poole corporation has collected the following information after its first year of sales. net sales were 1814400 on
What adjustments should be made to net present value to account for inflation?
The concept of conservatism is often considered important in accounting. The application of this concept means that in the event some doubt occurs as to how a transaction should be recorded, it should be recorded so as to
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd