is expected to be used for 80‚000 working hours during its 8-year life. Instructions: Compute depreciation using the following methods in the year indicated. (a) Straight-line for 2012 and 2013‚ assuming a December 31 year-end. (b) Declining-balance using double the straight-line rate for 2012 and 2013. (c) Units-of-activity for 2012‚ assuming machine usage was 2‚900 hours. (Round depreciation per unit to the nearest cent.) A) 15‚000 1 / 8= .125 128‚000-8‚000=120‚000 120‚000 x .125=
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Chapter 2 Worldwide accounting diversity Chapter Outline I. Considerable differences exist across countries in the accounting treatment of many items. These differences can result in significantly different amounts being reported in the financial statements prepared by companies using different GAAP. II. A variety of factors influence a country’s accounting system. A. Legal system – in code law countries‚ accounting rules tend to be legislated; common law countries tend to have
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Manufacturing Expense | | 350000 | | | | Cash | | 350000 | 12/31 | PPE | | 150000 | | | | Cash | | 150000 | 12/31 | Interest Expense | | 750 | | | | Cash | | 750 | 12/31 | Depreciation Expense | | 10625 | | | | Accum. Depreciation | | 10625 | | To record depreciation expense for Jul-Dec((150‚000+62‚500 -0)/10)*1/2 years | 12/31 | COGS | | 195000 | | | | Cash | | 195000 | 12/31 | Patent Amortization | | 25000 | | | | Accum. Amortization | | 25000
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1. Near year end‚ P‚ a cash basis‚ calendar year taxpayer‚ paid for various deductible expenses as described below. 1. The payment was dropped in the mail before year end. 2. P gave a note evidencing her promise to pay the amount in three months. 3. The amount was charged on her Master Card on December 28. The charge appeared on her bill for the period December 1 through December 31‚ which she received in January and which she paid on January 20. The bank actually paid the expense in January
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receivable ($49‚625 - $65‚000) (15‚375) Increase in inventory ($252‚500 - $273‚750) (21‚250) Decrease in prepaid expenses ($6‚250 - $5‚375) 875 Decrease in accounts payable ($116‚625- $88‚125) (28‚500) Depreciation expense 18‚750 Loss on disposal of equipment 5‚125 Net cash provided by operating activities $33‚375 Cash flows from investing activities Cash received from sale of equipment 13‚625 Cash paid for equipment
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CHAPTER 10 Acquisition and Disposition of Property‚ Plant‚ and Equipment ASSIGNMENT CLASSIFICATION TABLE (BY TOPIC) Topics Questions Brief Exercises 1‚ 2‚ 3‚ 4‚ 5‚ 13 Concepts Problems for Analysis 1. Valuation and classification of land‚ buildings‚ and equipment. 1‚ 2‚ 3‚ 4‚ 6‚ 7‚ 12‚ 13‚ 15‚ 21 2. Self-constructed assets‚ capitalization of overhead. 5‚ 8‚ 20‚ 21 4‚ 6‚ 12‚ 16 3. Capitalization of interest. 8‚ 9‚ 10‚ 11‚ 2‚ 3‚ 4 13‚ 21 4‚ 5‚ 7‚ 8‚ 9‚ 10‚ 16 1‚ 5‚ 6‚ 7 3 4. Exchanges
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information. The policy that is chosen must be applied to a whole class of assets May change policy‚ but only if results in more relevant/ reliable information The cost model • AASB 116 requires that assets are carried at cost less any accumulated • depreciation • impairment losses • Repair and maintenance costs are expensed as incurred‚ not capitalised – • Capitalisation requires (at time of expenditure) increased probable future economic benefit – 3
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incremental cash flows‚ because the incremental cash flows will be marginal benefits from this project and increased value to the company. (Cite study paper) Although depreciation is a non-cash expense‚ it does affect the level of the differential cash flow‚ because it is a tax-deductible expense. The higher the depreciation expense‚ the lower the firms profits will be. (Keown Martin‚ Petty 11) Sunk costs do not affect the determination of cash flow in this proposal. Our concern would
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Coca Cola Company is one of the biggest global manufacturer‚ marketer‚ and distributor of non alcoholic beverages. The company sells concentrates and syrups to authorized canning and bottling operators. Coca Cola company products include sparkling‚ juices‚ beverages‚ and bottled water. Around 75% of the coca cola revenue is international‚ and 53% are concentrate and syrup sales of Coke brands. Coca cola markets in world’s top five brands Coke‚ Diet Coke‚ Sprite‚ and Fanta. Coca-Cola is the most
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Case Introduction Fonderia di Torino S.P.A‚ founded in 1912 by Benito Cerini‚ was a manufacturing company which produced metal castings using semi-automated molding machines. The company’s main line of business was the production of precision metal castings for use in automotive‚ aerospace‚ and construction equipment. The company excelled at this and was awarded because of the quality of its products. The mainly European customers of Fonderia di Torino were original-equipment manufacturers (OEM)
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