Chapter9quiznotes - Carrying value = cost minus accumulated...

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Carrying value = cost minus accumulated depreciation Office desk held for resale: should be classified as inventory Purchase a machine for his shop that will save him $4000 per year in labor costs for 5 years. The cost of machine is $20000 and estimates that it will be worth $3000 at end of 5 years. Assume that appropriate interest rate is 10 percent. What is present value of disposal price? Multiplying disposal price ($3000) by 0.621, the factor of 5 periods at 10 percent from table 3. The buildings account would account for architects fees, permits, foundation preparation, BUT NOT THE COST OF SIDEWALKS. THAT IS RECORDED IN LAND IMPROVEMENTS ACCOUNT. Capital Expenditure is an expenditure for the purchase or expansion of a long term asset Extraordinary repairs are capital expenditures that significantly enhance a plant asset’s estimated useful life of residual value. They also are recorded by reducing the accumulated depreciation account. Machinery that was purchased for $60000 has an estimated residual value of $15000, it’s depreciable cost
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This note was uploaded on 02/25/2010 for the course MAT 443 taught by Professor Roberts during the Winter '10 term at University of Arizona- Tucson.

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Chapter9quiznotes - Carrying value = cost minus accumulated...

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