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5 . Problem Five: Fixed Assets Below is selected information taken from the balance sheet of LongLi Corporation as of 12/31/06. From the operating section of the statement of cash flows, you determine that the depreciation expense for the year was $2,000 and loss on sales of assets was $5,000. The investing section reveals that the company purchased equipment for $14,000 and sold equipment for $2,000. In the footnotes to the financial statements, the company states: At the beginning of 2006, we determined that the useful life of our assets was higher than originally believed. Accordingly we have increased the useful life from 10 years to 15 years in 2006. a. What was the gross book value of the equipment that was sold? b. What was the net book value of the equipment that was sold? c. With respect to the change in the useful lives of the assets: i. What is the effect on 2005's financial statements? ii. What is the effect on 2006's financial statements?
1.On June 30, 2010, Parks Co. had outstanding 8%, $2,000,000 face amount, 15-year bonds maturing on June 30, 2025. Interest is payable on June 30 and December 31.
On January 1, 2003, ABC co. purchased a building and machinery that have the following useful lives, salvage value, and costs-Prepare the journal entry necessary to record the depreciation expense on the building in 2008
mary lynn corporation has been operating for several years. selected data from the 20x1 and 20x2 financial statements
At a sales level of $270,000, the magnitude of operating leverage for Donuts Unlimited is 1.5. If sales increase by 20%, profits (net income) will increase by:
The activity method will be used for depreciation. What is the depreciation expense on this asset?
Lata Inc., produces aluminum cans. Production of 12-ounce cans has a standard unit quantity of 4.5 ounces of aluminum per can.
Identify whether each transaction below is an operating, investing or financing activity. Assume the indirect method.
explain the procedures of apportionment of overhead expenses through departmentalization with the help of practical
Assume that actual cash inflows turn out to be $91,000 per year. Determine the amount of Mr. Holt's bonus if the original computation of net present value were based on $90,000 versus $70,000.
Perhaps the best method for estimating the market value of shareholders' equity is to:
Grossmont Company reports $1,375,500 of net income for 2009 and declares $192,500 of cash dividends on its preferred stock for 2009. At the end of 2009, the company had 350,000 weighted-average shares of common stock.
Assuming the computer has a ten-year life and will have no salvage value at the expiration of the lease, what was the original cost (present value) of the computer to Stark?
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