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Chapter 6 homework Due Tuesday Turn In

# Chapter 6 homework Due Tuesday Turn In - 6-10 a Interest is...

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George Garza Accounting 2311 Chapter 6 Homework Due Tuesday 6.2 A: Punch Press \$33,600 + \$3,200 x .6 = \$22,080 Lathe \$33,600 + \$3,200 x .3 = \$11,040 Welder \$33,600 + \$3,200 x .1 = \$3,600 Total \$36,800 B: The Useful life of the asset to Crow Co. The Machines purchased are going to be used as “add in” machinery and there will be no depreciation because they are new to the company no matter what price they paid for them of what condition they are in. 6.8 A: (straight-line) \$26,000 - \$4,000/ 4 years = \$22,000/4 = \$5,500 Average Book Value Double declining Book Value (Rate) Depreciation Expense Accumulative Depreciation Ending Book Value Year 1 \$26,000 50% \$13,000 \$13,000 \$13,000 Year 2 \$13,000 50% \$6,500 \$19,500 \$6,500 Year 3 \$6,500 50% \$2,500 \$22,000 \$4,000 Year 4 Peaked out B: (Straight-line) \$22,000/3 = \$7,333 Double Declining = \$4,000 I subtracted 6500 from estimated salvage value of \$4,000. Or it would have been less than the estimated salvage value (\$3250) C: They would actually make a profit of \$2,200 more than the truck is worth after the depreciation.

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Unformatted text preview: 6-10 a. Interest is compounded semiannually. Every 6 months x 5 years = 10 periods @ 16% =.2267 x 100000 = \$22,670 b. Interest is compounded quarterly. Every 4 months x 5 years = 20 periods @ 16% = .0514 x \$100,000 = \$5,150 c. A discount rate of 12% is used. Every 4 months x 5 years = 20 periods @ 12% = .1037 x \$100,000 = \$5,150 = \$10,370 d. A discount rate of 20% is used. Every 4 months x 5 years = 20 periods @ 20% = .0261 x \$100,000 = \$2,610 e. The cash will be received in three years. 3 periods @ 16% = .6407 x \$100,000 = 64,070 f. The cash will be received in seven years. 7 periods @ 16% = .3538 x \$100,000 = 35,380 George Garza Accounting 2311 Chapter 6 Homework Due Tuesday 6-12 A. \$450,000 - \$300,000 = \$150,000 B. \$90,000/\$450,000 = .2 C. ? D. They may be a competitor or own a Brand name that Takeover wants no matter what the cost....
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