12%. What is the NPV? | Figures in 000 ’s | | Year | 0 | 1 | 2 | 3 | 4 | 5 | Unit Sales | | 500 | 600 | 1‚000 | 1‚000 | 600 | Revenues | | 2‚000 | 2‚400 | 4‚000 | 4‚000 | 2‚400 | Costs | | 750 | 900 | 1‚500 | 1‚500 | 900 | Depreciation | | 1‚200 | 1‚200 | 1‚200 | 1‚200 | 1‚200 | Pretax Profit (includes salvage in year 5) | | 50 | 300 | 1‚300 | 1‚300 | 800 | Taxes at 35% | | 18 | 105 | 455 | 455 | 280 | Profit after tax | | 33 | 195 | 845 | 845 | 520 | | |
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The controller’s bonus is based on the next income. It is the controller’s belief that the switch in inventory methods would increase the net income of the company. What are the differences between the LIFO and FIFO methods? D2: A variety of depreciation methods are used to allocate the cost of an asset to all of the accounting periods benefited by the
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Because the methods employed in treating certain items within the accounting records may be varied from time to time‚ the concept of consistency has come to be applied more and more rigidly. For example‚ because there can be no single rate of depreciation chargeable on all fixed assets‚ every business has potentially a lot of discretion over the precise rate
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If $1‚000 1/10 net 30 is written on a bill‚ the buyer can take a 1% discount ($1000 X .01 = $10) and a payment of $990 is due within 10 days‚ or the full $1000 is due in 30 days. 4. What is the distinction between sales allowances and sales discounts? A sales allowance is given if there is something wrong with the merchandise‚ or to show the customer you value their business. A sales discount is given to the customer/client when they pay within a specified time. 5. Describe in words the
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regarding the effects of the TANF program. Provisions: * Each state receives its own capped block grant to run its own TANF program. * The main family member must be working within two years to continue receiving TANF. * The overall allowance of public welfare assistance is limited to five years. You can only receive benefits for a maximum of five years. This limit is non-consecutive and is an overall number. * Each state can propose and enforce stricter limits. * For
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Cash Flow Statement When fixed assets are sold‚ by definition‚ money is‚ or will be received. The result is entries to Cash or Accounts Receivable. You must also make entries to remove the Asset from the books and to remove any Accumulated Depreciation on the books for that Asset. The result is that the sum of the debits will not equal the credits in this transaction. The account that will be used to balance the debits and credits is called Gain on Disposition of Fixed Assets. The following
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Table of Contents Accounting Concepts and policies…………………………………………………………….. 3 – 7 Relevance of accounting concepts and policies on financial report…………….. 7 – 10 Discount allowed and received………………………………………………………………… 11 – 13 Difference between carriage inwards and carriage outwards……………………. 11 – 13 Differences between straight line and reducing balance methods……………… 11 – 13 References……………………………………………………………………………………………… 14 - 16 Introduction Accounting Concepts and Principles These are rules and
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the beginning of 2009‚ Glass Manufacturing purchased a new machine for its assembly line at a cost of $600‚000. The machine has an estimated useful life of 10 years and estimated residual value of $50.000. Under the straight-line method‚ how much depreciation would Glass take in 2010 for financial reporting purposes? A. $55‚000. B. $60‚000. C. $65‚000 4. For 2009‚ Flamingo Products had net income of $1‚000‚000. At 1 January 2009‚ there were 1‚000‚000 shares outstanding. On 1 Ju1y 2009‚ the
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PAMANTASAN NG LUNGSOD NG MAYNILA FINANCIAL ACCOUNTING QUIZ 7 NAME: ____________________________ TRUE OR FALSE: 1. Assets under construction for a company’s own use do not qualify for interest cost capitalization. 2. Avoidable interest is the amount of interest cost that a company could theoretically avoid if it had not made expenditures for the asset. 3. When a company purchases land with the intention of developing it for a particular use‚ interest costs associated with those
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same class are evaluated in the same way (Summary of Statements‚ 2015) . In component depreciation‚ depreciation occurs when assets have fundamentally different parts that depreciate in different ways. With IFRS a company is required to use component depreciation if the parts of an asset are varied. The same holds true for GAAP but companies in the US rarely practice in this way. An example of component depreciation would be large machinery consisting of a computerized unit. Each unit is the same part
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