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Question
Sandeep Inc. uses double-declining-balance depreciation for an asset with a 4-year life expectancy and no salvage value. Depreciation expense for the second year of the asset's life is calculated by:
a. [2 x Book Value]/4
b. [2 x (Cost Salvage Value]/4
c. [(2 x Book Value)/4] Accumulated Depreciation
d. [2 x Cost]/4
Answer
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Related questions
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A machine was purchased on January 1 for $100,000. The machine has an estimated useful life of 5 years with a salvage value of $20,000. Under the straight-line method, the book value and the accumulated depreciation of the machine at the end of year two is respectively,
a. $60,000 and $40,000
b. $68,000 and $32,000
c. $40,000 and $60,000
d. $48,000 and $32,000
Q:
A machine was purchased on January 1 for $50,000. The machine has an estimated useful life of 10 years with a salvage value of $2,000. Under the double-declining-balance, depreciation expense for each of the first two years is, respectively,
a. $12,000 and $12,000.
b. $10,000 and $8,000.
c. $12,000 and $9,500.
d. $12,500 and $12,500.
Solution: $50,000 x 2/10 and ($50,000 - $10,000) x 2/10
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$ 2,000 Additional paid-in capital
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58,000 Total shareholders equity
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June 16 - A 15% stock dividend was declared and issued. Market value per share is currently $18.
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On January 1, 2014, Enron Corporation issued a 4-year, 7%, $9,000 bond payable. Beginning in 2015, interest is payable annually every January 1. The market rate of interest at issuance is 9%. How much are the interest payments by Enron? Why is the amount of interest expense different than the cash payments?
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On January 1, 2014, Mango Corporation issued a 3-year, 4%, $3,000 bond payable. Beginning in 2015, interest is payable every year on January 1 over the life of the bond. The market rate of interest on January 1, 2014 is 6%. What are the proceeds received by Mercer from the issue of this bond on January 1, 2014?