in clqass prob

in clqass prob - Mikhail Pevzner and George Mason...

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© Mikhail Pevzner and George Mason University Problem 1: On April 1, 2008, MBP acquires a machine with expected useful life of 20 years and expected salvage value of $100,000. In exchange for a machine, MBP pays $100,000 and issues 10,000 5% preferred shares with par value of $100. At the time of the transaction preferred shares are traded on a local exchange at $200. MBP spends $10,000 in machine installation costs. On December 31, 2010, MBP sells the machine for $1.5 million. Determine the accounting for the machine up until and including sale time, assuming MBP uses: 1) straight line depreciation method 2) double-declining depreciation method Problem 2: Prepare Statement of Cash Flows using the following information: Balance Sheet-MBP Corporation As of December 31, 2007 2007 2006 Assets Cash 5,000 4,000 Accounts Receivable 627 3,297 Inventory 800 600 PP&E 8,000 1,050 Accumulated Depreciation (600) (800) Total Assets 13,827 8,147 Liabilities and Shareholders' Equity Accounts Payable
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in clqass prob - Mikhail Pevzner and George Mason...

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