Learning Task Number Four The Henry Furniture Co. is a new company and has numerous fixed assets that need to be depreciated. You can help Henry by determining the depreciation rates for the assets and the amount of depreciation for year one. The assets were purchased at various times during the year (hint: watch out for the dates). The following assets will be held by the company for at least the next two years (In other words‚ year two will be a full year for all of the assets). Please fill
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equipment for cash‚ at a total cost of $2.9 million‚ there are several possible scenarios to consider: tax and depreciation rates remaining as they are or changing and the loss or continuation of the Investment Tax Credit (ITC). Without providing an excess of detail here‚ those scenarios include: a possible tax rate decrease from the current level of 46% to 34%‚ possible extension of depreciation to 7 years‚ and the possible repeal for the ITC tax credit‚ as well as the possibility of “Grandfathering”
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Week 3 Problem Set Answer the following questions and solve the following problems in the space provided. When you are done‚ save the file in the format flastname_Week_3_Problem_Set.docx‚ where flastname is your first initial and you last name‚ and submit it to the appropriate dropbox. Chapter 7 (pages 225–228): 1. Your brother wants to borrow $10‚000 from you. He has offered to pay you back $12‚000 in a year. If the cost of capital of this investment opportunity is 10%‚ what is its NPV? Should you
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how to account for: 1. The expenditures and depreciation (if applicable) of the leasehold improvements. 2. The general repairs and maintenance. 3. The reinstating to the property’s original condition. The purpose of this memo is to analyze the circumstances and obligations arising under this lease agreement and make recommendations regarding the accounting treatment. 1. How to account for the expenditures and depreciation (if applicable) of the leasehold improvement? NeedsLease
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Discussion Question #1 What are the differences among valuation‚ depreciation‚ amortization‚ and depletion? Is it appropriate to calculate depreciation using two different methods? Why? Which depreciation method provides you the highest depreciation expense in the first year? Why? Valuation refers to the asset being recorded and disclosed at current market price regardless of whether that price is above or below cost. Depreciation is the allocation of the cost of a plant asset to expense over its
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Income statement The income statement or the profit and loss account as it is also called measures reports how much profit (wealth) has the business generated over a period of time. To measure profit the total generated revenue over a period must be identified. Revenue is a measure of inflow of economic benefits arising from the operations of the business. These benefits will either result in an increase of assets such as cash or amounts owed to the business by the customers or a decrease
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Introduction IN1 International Accounting Standard 16 Property‚ Plant and Equipment (IAS 16) replaces IAS 16 Property‚ Plant and Equipment (revised in 1998)‚ and should be applied for annual periods beginning on or after 1 January 2005. Earlier application is encouraged. The Standard also replaces the following Interpretations: • SIC-6 Costs of Modifying Existing Software • SIC-14 Property‚ Plant and Equipment—Compensation for the Impairment or Loss of Items • SIC-23 Property‚ Plant and
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total revenues. To estimate expenses‚ we are given the breakdown of fixed and variable expenses for each of the expense items. The fixed expenses increase by the inflation rate‚ whereas the variable expenses adjust with the change in revenue. Depreciation is given as constant and interest expense is also taken as constant as we have not decided on the financing of the EFN. In addition some new expenses are added due to the new initiatives. This includes salaries for four national accounts managers
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accounting h. Managerial accounting i. Financial Accounting j. Managerial accounting 10-3 Classifying Costs: Product or G‚ S‚ & A/ Asset or Expense a. Production supplies- Product cost‚ asset b. Depreciation on Administrative Building- G‚ S‚ & A‚ expense c. Depreciation on manufacturing equipment – Product cost‚ expense d. Research and development costs- G‚ S‚ & A‚ Expense e. Cost to set up manufacturing equipment – Product cost‚ asset f. Utilities used in factory-
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Income | | $0.8 | $2 | $2 | $2 | $2 | $2 | | + | Operating Saving | | $2 | $3.5 | $3.5 | $3.5 | $3.5 | $3.5 | | - | Depreciation | | $3 | $3 | $3 | $3 | $3 | $3 | | | EBIT | | -$0.2 | $2.5 | $2.5 | $2.5 | $2.5 | $2.5 | | - | Tax (40%) | | -$0.08 | $1 | $1 | $1 | $1 | $1 | | | EAT | | -$0.12 | $1.5 | $1.5 | $1.5 | $1.5 | $1.5 | | + | Add back Depreciation | | $3 | $3 | $3 | $3 | $3 | $3 | | | Total Operating Cash Flow | | $2.88 | $4.5 | $4.5 | $4.5 | $4.5 | $4.5 | |
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