MBA800X23

# MBA800X23 - 10,000 Depreciation for 2007(1/4 2,000...

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A. Value of asset: .5(\$6,000) + .5(\$10,000) = \$8,000 (same expected value for 2005 and 20 (\$8,000/1.08) + (\$8,000/1.08^2) = \$14,266 Cash \$5,734 Equity \$20,000 Asset 14,266 \$20,000 \$20,000 B. Cash is increased by \$6,000. Asset value is: 0.7(\$10,000) + 0.3(\$6,000) = \$8,800 \$8,800/1.08 = \$8,148 Cash \$11,734 Equity \$19,882 Asset 8,148 \$19,882 \$19,882 C. Assets began at \$14,266. Given an 8% rate would be: \$14,266 X 1.08 = \$15,407 (normal earnings are \$15,407 - \$14,266 = \$1,1 Change in Equity is \$19,882 - \$20,000 = \$-118 \$-118 - \$1,141 = \$-1,259 (earnings minus normal earnings equals abnorm D. Cash \$11,734 Equity \$11,734 Asset - \$11,734 \$11,734 E. \$19,882/\$11,734 = 1.6944 F. \$-118 economic earnings \$-118/\$20,000 = -0.59% G. \$11,734 - \$20,000 = \$-8,266 \$-8,266/\$20,000 = -41.33%

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006) 141) mal earnings)
Year Straight Line SYD DDB 2006 \$6,000 \$10,000 \$16,000 2007 \$6,000 \$8,000 \$9,600 2008 \$6,000 \$6,000 \$4,400 can't depreciate below salvage value 2009 \$6,000 \$4,000 \$- 2010 \$6,000 \$2,000 \$- \$30,000 \$30,000 \$30,000 Depreciation as of 1Jan2007

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Unformatted text preview: 10,000 Depreciation for 2007 (1/4) 2,000 Accumulated Depr. At Sale 12,000 Depreciation Expense 2,000 Accumulated Depreciation 2,000 Cash 27,500 Accumulated Depreciation 12,000 Loss on Sale of Equipment 500 Equipment 40,000 Note, an entry like this: Cash 27,500 Accumulated Depreciation 12,000 Gain on Sale of Equipment (500) Equipment 40,000 is completely unacceptible. You can never credit or debit for negative amounts. An entry like this: Cash 27,500 Accumulated Depreciation 12,000 Equipment 40,000 Loss on Sale of Equipment 500 is also completely unacceptible. All debits must precede all credits. Multiple Choice Grading 100.0 Multiple Choice answers in .doc test file 1 97.0 2 93.9 3 90.9 4 87.9 5 84.8 6 81.8 7 78.8 8 75.8 9 72.7 10 69.7 11 66.7 12 63.6 13 60.6 14 57.6 15 54.5 16 51.5 17 48.5 18 45.5 19 42.4 20 39.4 21 36.4 22 33.3 23 30.3 24 27.3 25 24.2 26 21.2 27 18.2 28 15.2 29 12.1 30 9.1 31 6.1 32 3.0 33 0.0 Number Missed Points Earned...
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## This note was uploaded on 07/28/2011 for the course MBA 800 taught by Professor Wallin during the Summer '11 term at Ohio State.

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MBA800X23 - 10,000 Depreciation for 2007(1/4 2,000...

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