Interest Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money‚ or money earned by deposited funds. When money is borrowed‚ interest is typically paid to the lender as a percentage of the principal‚ the amount owed to the lender. The percentage of the principal that is paid as a fee over a certain period of time (typically one month or year) is called the interest rate. A
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500 000. The wages for December were - wages of production workers were - Wages of administration people were - wages of distribution workers were 100 000‚ out of which: 60 000 30 000 10 000 Depreciation of production machines and buildings were Depreciation of administrative buildings were Depreciation of distribution cars were 20 000 10 000 5 000 Costs of marketing were 80 000 Interest costs related to loans received were 5 000 Tax expenses were 3 000 10 printing machines were produced in December
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and a residual value of $40‚000 was purchased for $120‚000. What is the depreciation expense for year 2 under the double-declining-balance method of depreciation? 2. As a recent graduate of State University you ’re aware that IFRS requires component depreciation for plant assets. A friend has asked you to succinctly explain what component depreciation means. Which of the following correctly describes component depreciation? 3. Given the following account balances at year end‚ compute the total
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Chapter 3: Financial Statements‚ Cash Flow‚ and Taxes This chapter has a lot of definitions. They are important‚ but we don’t like to make students memorize too many of them early in the course. We let our students use a formula sheet that includes the key definitions. Note that there is an overlap between the T/F and multiple-choice questions‚ as some of the T/F statements are used in multiple-choice questions. Multiple Choice: True/False 1. The annual report contains four basic financial statements:
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fixed assets should be capitalized when they are ready for use‚ which means when its physical completion is complete. FRS 15 deals with three issues regarding tangible fixed assets: • their initial measurement; • their revaluation; • their depreciation. A tangible fixed asset should initially be measured at cost. FRS permits a choice as to whether tangible fixed assets are stated at cost or at revalued amount. However‚ where an enterprise chooses to adopt a policy of revaluing some assets‚ all
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for businesses. The decision to lease or purchase for a business depends on several factors. Several questions should be asked to evaluate the decision. First‚ what is the company purchasing? What is the economic life of the purchase? How much depreciation of the item will occur over the period of the lease? What is the interest rate of the lease agreement? Will there be maintenance and repair costs associated with the lease/purchase? How does the decision to lease or purchase affect the company’s
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Ocean Carriers Project Analysis Introduction Ocean Carriers receives a lease for a ship over three years starting in 2003. However‚ the company currently does not hold qualified ships that can meet customers’ demand. Our report is not only to assist Ms. Linn to decide whether or not to purchase a new ship but also give a reasonable suggestion on how long to hold on the ship regarding the NPV and long term prospective of dry bulk industry. Upon business operating in U.S or H.K‚ we consider four scenarios
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supplies expense………………………. | 1‚200 | | Utilities expense………………………………. | 850 | | Malpractice insurance expense……………….. | 6‚000 | | Office rent expense…………………………… | 24‚000 | | Continuing education expense………………... | 2‚650 | | Depreciation expense: fixtures………………... | 4‚500 | | Miscellaneous expense………………………... | 6‚000 | | Income taxes expense…………………………. | 29‚400 | 170‚400 | Net income………………………………………. | | $ 54‚600 | The firm’s statement of retained earnings indicates
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Multiple choice When preparing a bank reconciliation‚ which of the following items should be added to the book balance? EFT receipts deposits in transit collection items both EFT receipts and collection items Which of the following must be added to beginning Retained Earnings to compute ending Retained Earnings? net income expenses dividends all of these answers are correct The use of the FIFO method increases taxable income: when prices are constant when prices are declining
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additional burden costs‚ which also varied from part to part. High-technology components were tested using more automated test equipment. These tests took longer‚ but did not require as many hours of direct labor. The test equipment also had a higher depreciation expense. It is common for a cost system to become obsolete when the process experiences increased automation. In these situations parts being tested through automation are not charged enough overhead while other‚ more labor intensive tests are
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