[ii]. During 2004‚ the Abel Co. had gross sales of $1 million. The firm’s cost of goods sold and selling expenses were $300‚000 and $200‚000‚ respectively. These figures do not include depreciation. Abel also had notes payable of $1 million. These notes carried an interest rate of 10 percent. Depreciation was $100‚000. Abel’s tax rate in 2004 was 35%. What was Abel’s net income? [iii]. In the above question‚ what was Abel’s operating cash flow? For the next 7 questions suppose the following
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information include: a. b. c. 4. d. observing e. classifying The financial statement or statements that pertain to a stated period of time is (are) the: a. b. c. d. e. 3. interpreting reporting purchasing accumulated depreciation depreciation expense sales revenue d. e. marketing expense interest expense A brand new company has a building costing $10‚000‚ machinery costing $5‚000‚ cash of $700‚ and a bank loan of $7‚850. What is the owner’s equity? a. b. c.
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were other critical factors to address before moving forward with the project. One of the most important factors to consider was the rumored new tax legislation that would‚ “(1) eliminate the investment tax credit for new equipment; (2) extend depreciation lives for new equipment; and (3) reduce the corporate tax rate from 46% to 34% beginning in 1986. (Harvard‚ 1991)” Therefore‚ the financial problem facing Paperco is what is the Net Present Value (NPV) of replacing its existing mechanical drying
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reasons why the cash position for the business does not equal to the profit for the period. By showing the spreadsheet‚ two financial statements and looking into theories of matching principle‚ prepayments and accruals‚ provisions(bad debts and depreciation)‚ it is not hard to distinguish the cash flow from the profit. Content It is vital to understand the cash position and the profit do not necessarily go together when running business. Profitable businesses still can go out of business because
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truck and an overhead pulley system‚ in this year’s capital budget. The projects are independent. The cash outlay for the truck is $17‚100 and that for the pulley system is $22‚430. The firm’s cost of capital is 14%. After-tax cash flows‚ including depreciation‚ are as follows: Year | Truck | Pulley | 1 | $5‚100 | $7‚500 | 2 | 5‚100 | 7‚500 | 3 | 5‚100 | 7‚500 | 4 | 5‚100 | 7‚500 | 5 | 5‚100 | 7‚500
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Corporation ………… $1‚000‚000.00 IFRS adjustments: Add: Reversal of inventory cost written down to replacement cost….. 10‚000.00 Less: Additional depreciation of building after 2011 revaluation…….. (25‚000.00) Impairment loss on intangible assets…………… (5‚000.00) Add: Deferred research and development costs…….. 80‚000.00
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stock lowers the stock outstanding‚ it is subtracted from Stockholders’ Equity so that the stockholders’ net equity is for outstanding shares only. Treasury stock is‚ in essence‚ a reduction in paid-in capital. 3-36: Which depreciation method will result in the most depreciation over the life of an asset? Irrespective of the
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statements In 1984 they changed the depreciation method from accelerated methods to the straight-line for financial reporting purposes. This change included a adjustment of the residual values on certain machinery and equipment. They also included the products purchased from Kobe Steel‚ LTD and sold by them in their net sales. Moreover‚ they also included the financial statements of some foreign subsidiaries. 2. What is the effect of the depreciation accounting method change on the reported
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by this period will be linearly amortized value of the building ($ 32‚000: 10 years = $ 3200) in the form of remission of fixed assets‚ which then will be transferred to the account of depreciation as shown in Figure 2. |Remission of fixed assets ( annualy ) |Depreciation ( annualy ) | | | | |Dt |Ct |years
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Week Three Exercise Assignment 1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows. Painting Cost 1/2 Beginning inventory Woods $21‚000 4/19 Purchase Sunset 21‚800 6/7 Purchase Earth 31‚200 12/16 Purchase Moon 4‚000 Woods and Moon were sold during the year for a total of $35‚000. Determine the
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