{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

# nov18 - Situation I Depreciation is a matching of expense...

This preview shows pages 1–4. Sign up to view the full content.

Michael McCormick ACG 3103 E11-22 a \$1,190,000 b Inventory \$90,000 \$184,000 (\$100,000) \$200,000 c COGS \$1,380,000 \$506,000 per unit material cost \$23 P11-1 Cost: \$76,800; N: 8; Salvage: \$1200 a(1) \$6,300 a(2) \$15,400 a(3) \$19,200 b per unit or hours P11-8 Land \$274,040 65% of a(1) cost: Building \$105,400 25% of Purchase \$400,000 Machinery \$42,160 10% of Cap. Interest \$21,600 Total \$421,600 Land \$274,040 Building \$105,400 A/D @ 10% (\$5,270) B.V. Building \$100,130 Machinery \$42,160 A/D @ 40% (\$8,432) B.V. Machinery \$33,728 b c arguments for capitalization: The interest expense is a real cost of business arguments against capitalization: The interest is a cost of doing business

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Michael McCormick ACG 3103 CA11-3

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Situation I Depreciation is a matching of expense to revenue, and depreciation is an est. if the firm was using an activity method of depreciation then no depreciation would occur. Situation II a If demand is steady the firm could use straight-line. If demand is increasing and th want to expenses more in later years then use an activity method. If demand is declining the firm could use a double-decline method. b How long will the new machine last: years, output. What is the maintenance cost. Stiuation III The firm should match expense with revanue Michael McCormick ACG 3103 Michael McCormick ACG 3103 ld the firm ....
View Full Document

{[ snackBarMessage ]}

### Page1 / 4

nov18 - Situation I Depreciation is a matching of expense...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online