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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Qstn. No.1: Calculate the annual depreciation expense that Delta and Singapore Airlines would record for each $100 gross value of Aircraft. a. For Delta‚ what was its annual depreciation expenses (per $100 of gross aircraft value) prior to July 1‚ 1986‚ From July 1‚ 1986 through March 31‚ 1993 and from April 1st‚ 1993 on? b. For Singapore‚ what was its annual depreciation expense (per $100 of Gross aircraft value) prior to April1‚ 1989 and from April 1‚1989 on? | | | | Delta Airlines
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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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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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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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Exercises and Problems XACC/291 Principles of Accounting II Week 2 February 8‚ 2015 Exercise E9-1 The following expenditures relating to plant assets were made by Spaulding Company during the first 2 months of 2011 (determine cost of the plant acquisitions). 1. Paid $5‚000 of accrued taxes at time plant site was acquired. 2. Paid $200 insurance to cover possible accident loss on new factory machinery while the machinery was in transit. 3. Paid $850 sales taxes on new delivery
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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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in the amounts above. All amounts are before taxes: Extraordinary gain Correction of a 20Y0 revenue understatement Loss from operations of a discontinued textiles division Gain on sale of the textiles division Omission of depreciation charges from January and February 20Y1 $31‚000 $50‚000 $22‚000 $60‚000 $10‚000 Prepare a partial income statement for 20Y1 starting with Income From Continuing Operations before Taxes. What is the 12/31/Y1 balance in the Retained Earnings
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