Instructions for the Microsoft Excel Templates by Rex A Schildhouse | | Be advised‚ the template workbooks and worksheets are not protected. Overtyping any data may remove it. | | | Extensive detail and information is contained within the help function of Microsoft Excel and in the provided text. | | You should enter your name‚ date‚ instructor’s name‚ and course into the cells at the top of the page. This information will be printed on the top of each page if the template requires
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Part B a. What is depreciation? What is the difference between straight line and reducing balance method of depreciation? How can Murah Travel determine which depreciation method to use? (Explain in detail) Depreciation is an expense‚ it is the process of what benefit that the business can get from the non-current assets they own from its original cost that is spread throughout the business over the years. Depreciation occurs due to wear and tear from continuous use‚ physical weather or the non-current
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$130‚000 is expected to generate annual cash inflow of $32‚000 for 6 years. Depreciation is allowed on the straight line basis. It is estimated that the project will generate scrap value of $10‚500 at end of the 6th year. Calculate its accounting rate of return assuming that there are no other expenses on the project. Solution Annual Depreciation = (Initial Investment − Scrap Value) ÷ Useful Life in Years Annual Depreciation = ($130‚000 − $10‚500) ÷ 6 ≈ $19‚917 Average Accounting Income = $32‚000
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What should you know about Financial Accounting? 1. How to measure assets? How to present assets? *Assets are economic resources owned or controlled by the company and can be measured by dollars. *Measure assets by the Principle of Historical Cost. *The cost of asset includes all expenditures that make that asset in place and ready for use. * Present assets in the Balance Sheet by the rank of liquidity. 2. How to measure profits? How to present profits? * Operating
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QUESTION 1 Which of these is not an advantage of the straight line method of depreciation? A It is easy to work out due to a simple formula B Calculated once for all the years C Depreciation added to maintenance costs rise as the asset ages D The cost of the asset is spread evenly through its useful life. Which of the following is not correct regarding depreciation? A It is due to the use of an asset B Is not incurred if the asset is not used C It is a portion of a long term expense D
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Inventory Accounts Payable Accounts Receivable Sales COGS Inventory Cash Accounts Receivable Accounts Payable Cash Misc. Expenses Cash Salaries Expense Cash Depreciation Expense Accumulated Depreciation Long-‐term loan Cash $ 8 250 11 000 7 700 19 000 11 000 1 500 2 600 200 800
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CHAPTER 2 & 3 Top of Form Question 1 1. Below is the common equity section (in millions) of Teweles Technology’s last two year-end balance sheets: 2009 2008 Common stock $2‚000 $1‚000 Retained earnings 2‚000 2‚340 Total common equity $4‚000 $3‚340 Teweles has never paid a dividend to its common stockholders. Which of the following statements
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no required down payment‚ (3) shared tax advantages‚ (4) assets and liabilities are not reported on the balance sheet. 6. You should explain to the president that depreciation is a process of allocating the cost of a plant asset to expense over its service (useful) life in a rational and systematic manner. Recognition of depreciation is not intended to result in the accumulation of cash for replacement of the asset. 7. (a) Salvage value is the expected cash value of the asset at the end of its
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Instructions (a) Compute depreciation expense for 2011 and 2012 using (1) the straight-line method‚ (2) the units-of-activity method‚ and (3) the double-declining balance method. (b) Assume that Brainiac uses the straight-line method. (1) Prepare the journal entry to record 2011 depreciation. (2) Show how the truck would be reported in the December 31‚ 2011‚ balance sheet. Straight-line depreciation rate ($30‚000 - $2‚000) / 8 years = $3‚500 per year Straight-line depreciation for 2010 $3‚500 Straight-line
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Financial Statement Analysis Case Discussion Questions CASE: The Case of the Unidentified Industries - 2006 The questions are in the case. However‚ the following information might be helpful. 1. For purposes of this case the loans of the commercial bank are classified as accounts receivable and the deposits as accounts payable. 2. Unlike most business done on a credit basis where $1 of revenue creates a $1 accounts receivable‚ in advertising $1 of revenue creates $1/15% = $6.67 of accounts
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