Answers
Answer:
A partner deliberately and consistently commits breach of agreements relating to the management of the firm.
Explanation:
The partnership can be dissolved if the partner has breached the agreements that are related to the management of business affairs.
Related Questions
Inventories Raw materials $ 42,000 $ 32,000 Work in process 9,100 18,300 Finished goods 57,000 34,300 Activities and information for May Raw materials purchases (paid with cash) 172,000 Factory payroll (paid with cash) 100,000 Factory overhead Indirect materials 6,000 Indirect labor 23,000 Other overhead costs 103,000 Sales (received in cash) 1,000,000 Predetermined overhead rate based on direct labor cost 55 %
Compute the following amounts for the month of May using T-accounts
1. Cost of direct materials used
2. Cost of direct labor used
3. Cost of goods manufactured
4. Cost of goods sold.
5. Gross profit
6. Overapplied or underapplied overhead
Prepare journal entries for the above transactions for the month of May. View transaction list Journal entry worksheet Record the application of overhead to work in process
Note: Enter debits before credits.
Transaction General Journal Debit Credit
Record entry Clear entry View general journal
Answers
Answer:
a. Computation of the following amounts for the month of May using T-accounts:
1. Cost of direct materials used = $176,000
2. Cost of direct labor used = $77,000
3. Cost of goods manufactured = $286,150
4. Cost of goods sold = $308,850
5. Gross profit = $691,150
6. Overapplied or underapplied overhead = $89,650 (underapplied)
b. Journal Entries:
Debit Raw materials $172,000
Credit Cash $172,000
To record the purchase of raw materials for cash.
Debit Factory payroll $100,000
Credit Cash $100,000
To record the payroll paid in cash.
Debit Factory overhead:
Indirect materials $6,000
Indirect labor $23,000
Other overhead costs 103,000
Credit Raw materials $6,000
Credit Factory payroll $23,000
Credit Cash $103,000
To record indirect materials, labor and other costs.
Debit Work in process $42,350
Credit Factory overhead $42,350
To apply overhead based on direct labor cost 55%.
Debit Cash $1,000,000
Credit Sales Revenue $1,000,000
To record the sale of goods for cash.
Explanation:
a) Data and Calculations:
Inventories:
Raw materials $ 42,000 $ 32,000
Work in process 9,100 18,300
Finished goods 57,000 34,300
Activities for May:
Raw materials purchases (paid with cash) 172,000
Factory payroll (paid with cash) 100,000
Factory overhead:
Indirect materials 6,000
Indirect labor 23,000
Other overhead costs 103,000
Sales (received in cash) 1,000,000
Predetermined overhead rate based on direct labor cost 55%
T-accounts:
Raw materials
Beginning balance $ 42,000
Cash 172,000
Manufacturing overhead 6,000
Work in process 176,000
Ending balance $ 32,000
Work in process
Beginning balance 9,100
Raw materials 176,000
Payroll 77,000
Overhead applied 42,350
Finished goods 286,150
Ending balance 18,300
Finished goods
Beginning balance 57,000
Work in process 286,150
Cost of goods sold 308,850
Ending balance 34,300
Manufacturing overhead
Indirect materials 6,000
Indirect labor 23,000
Other overhead costs 103,000
Work in process 42,350
Underapplied overhead 89,650
Sales revenue $1,000,000
Cost of goods sold 308,850
Gross profit $691,150
Analysis of Transactions:
Raw materials $172,000 Cash $172,000
Factory payroll $100,000 Cash $100,000
Factory overhead:
Indirect materials $6,000 Raw materials $6,000
Indirect labor $23,000 Factory payroll $23,000
Other overhead costs 103,000 Cash $103,000
Work in process $42,350 Factory overhead $42,350
Predetermined overhead rate based on direct labor cost 55%
Cash $1,000,000 Sales Revenue $1,000,000
Logistics is concerned Multiple Choice with flows of materials, finished products, and information. only with the flow of information, not the flow of materials and products. with the flow of materials to the manufacturer and with the flow of finished products to the consumer, but not with the flow of information. only with the flow of finished goods from the producer to the final consumer.
Answers
Answer:
Option A
Explanation:
Logistics is concerned with the flow of goods (raw material and finished products) to the consumer and the producer.
However, the entire process of logistics involve Flow of physical items as well as abstract items inclusive of time, information, particles, and energy
Hence, option A is correct
Which of the following statements about cash versus accrual accounting is most correct? A. In cash accounting, an event is recognized when a cash transaction occurs. B. In accrual accounting, an event is recognized when a cash transaction occurs. C. Most large healthcare organizations use cash accounting because it presents a better picture of the economic status of the organization. D. Most small healthcare organizations use accrual accounting because it closely matches statements required for income tax purposes. E. In cash accounting, an event is recognized when the obligation for a cash transaction is created.
Answers
Answer:
In cash accounting, an event is recognized when a cash transaction occurs
Explanation:
Account
This is simply a place to summarize all of the transactions that influence or affect one particular asset, liability, equity, revenue, expense, gain, or loss item.Cash are said to be asset.
Cash Accounting (COST)
This usually show (recognize) revenues and expenses when cash is physically paid or received even if or when transaction do happens. That is it will record only those transactions that affect cash ( only when someone gives or receives cash). It is very common in smaller business and can be a little inaccurate.
Accrual Accounting on the other hand, record revenue when sale is made and not when cash received. It also records expense when they arise and not when they are paid. It links revenues to when they were earned, while expenses when they are incurred. It is very common in bigger business and said to be more accurate indication of performance.
Bramble Corp. makes and sells umbrellas. The company is in the process of preparing its Selling and Administrative Expense Budget for the last half of the year. The following budget data are available: Variable Cost Per Unit Sold Monthly Fixed Cost Sales commissions $0.60 $ 6000 Shipping 1.20 Advertising 0.30 Executive salaries 39000 Depreciation on office equipment 7200 Other 0.35 24000 Expenses are paid in the month incurred. If the company has budgeted to sell 6000 umbrellas in October, how much is the total budgeted variable selling and administrative expenses for October
Answers
Answer:
$93,840
Explanation:
Calculation to determine how much is the total budgeted variable selling and administrative expenses for October
October Total budgeted variable selling and administrative expenses=
(0.6 + 1.2 + 0.3 + 0.35) x 7200 +6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=2.45x 7200 +6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=$17,640+6000 + 39,000 + 7,200 + 24,000
October Total budgeted variable selling and administrative expenses=$93,840
Therefore the total budgeted variable selling and administrative expenses for October is $93,840
user add controls to a form
Answers
Answer: meeeeep
Explanation:
Manoel
Georgia Movie Company has a capital structure with 50.00% debt and 50.00% equity. The cost of debt for the firm is 9.00%, while the cost of equity is 15.00%. The tax rate facing the firm is 36.00%. The firm is considering opening a new theater chain in a local college town. The project is expected to cost $12.00 million to initiate in year 0. Georgia Movie expects cash flows in the first year to be $3.10 million, and it also expects cash flows from the movie operation to increase by 4.00% each year going forward. The company wants to examine the project over a 13.00-year period. What is the WACC for this project
Answers
Answer:
10.38%
Explanation:
The computation of the WACC is given below:
WACC = Weight of debt × After tax Cost of debt + Weight of Equity × Cost of Equity
Here After tax cost of debt is
= Cost of debt × (1 - tax rate)
= 9% × (1 - 36%)
= 5.76%
Now
WACC = 50% × 5.76% + 50% × 15%
= 10.38%
Kayla is an accountant who donates her services to the Allegro Chorale, a nonprofit arts organization in Odessa, Texas. Kayla prepares monthly financial statements for Allegro for all of the following reasons EXCEPT _______. a. Kayla can identify underserved marketing segments and recruit them to join the Allegro Chorale b. Kayla can generate awareness of and long-term benefits for the Allegro Chorale c. donated services create goodwill d. donating her services helps Marci make personal contacts in the community
Answers
Answer: a. Kayla can identify underserved marketing segments and recruit them to join the Allegro Chorale
Explanation:
Some of the reasons why Kayla prepares the monthly financial statement will be to create goodwill, and help generate long term awareness for the organization.
We should note that the identification of underserved marketing segments and then recruiting them to join the Allegro Chorale isn't the role of Kayla, therefore this isn't one of the reason that she's preparing the financial statement.
Exercise 9-18 (Algorithmic) (LO. 5) In 2020, the CEO of Crimson, Inc., entertains 9 clients at a skybox in Memorial Stadium for a single athletic event during the year. Substantive business discussions occurred at various times during the event. The box cost $6,750 per event and seats 11 people. (The cost of a regular, nonluxury box seat at Memorial ranges from $50 to $100.) Refreshments served during the event cost $1,720 (and were separately itemized on the bill Crimson received). How much of these costs may Crimson deduct
Answers
Answer: $860
Explanation:
As substantive business discussions took place in box at various times, there can be certain deductions for business purposes.
The box cost is not deductible because the cost is substantially higher than the cost of nonluxury box seats at the same stadium.
As per normal taxation convention, 50% of the refreshments can be deducted as business expenses:
= 50% * 1,720
= $860
SOMEONE PLEASE HELP I WILL GIVE BRAINLIEST
Answers
Answer:
Can you paste it?
Explanation:
Bombeck Inc. has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 Opens an office as a financial advisor, investing $5,000 in cash in exchange for common stock. 4 Pays insurance in advance for 6 months, $1,800 cash. 16 Receives $1,900 from clients for services performed. 27 Pays secretary $1,000 salary.
Answers
Answer: Please see answers in explanation column
Explanation:
Date Accounts titles and explanation Debit Credit
Aug 1 Cash $5000
Common Stock $5000
--Since this is an investment by the owner of the business . When the business is gaining cash, it is being debited as it is an asset which is always debited with increase. Also there will be an increase in the owner's Equity Account leading to crediting the Common stock (equity) account.
Date Accounts titles and explanation Debit Credit
Aug 4 Prepaid Insurance $1800
Cash $1800
--The insurance paid in 6 months advance is an asset for the business. As stated above when asset increases, it is debited in the account journal So, prepaid insurance account is being debited . Also,since cash is being reduced as it is used for payment for insurance, it is credited in the accounts journal.
Date Accounts titles and explanation Debit Credit
Aug 16 Cash $1,900
Service Revenue $1,900
--The amount of $1,800 is the revenue for service rendered and since it is an equity account which increased revenue, we credit it. Also, since cash is being received, because it is an asset, debit is recorded on the cash account.
Date Accounts titles and explanation Debit Credit
Aug 27 Salary Expense $1000
Cash $1000
--Payment of salary is an expense to any business and paid from the business Cash Account causing a decrease in the Cash, since Cash is referred to an asset , because of its decrease, we credit the Cash Account. Also, the salary expense account is debited because it is increasing
Rare earth metals are used in the production of many of the personal electronic devices you use every day. Suppose there is an unexpected decrease in the price of rare earth metals. a. The decrease in price of rare earth metals will lead to negative cost-push inflation. demand-pull inflation. an increase in expected inflation. negative demand-pull inflation. b. Illustrate the effect of the decrease in the price of rare earth metals by making the appropriate adjustments to the Phillips curve.
Answers
Answer:
a. negative cost-push inflation
b. Phillips Curve will shift right
Explanation:
a. Cost push inflation occurs when the costs of inputs such as wages and material costs increases. This leads to an increase in prices because producers will have to increase prices to make a profit.
In this scenario, material prices dropped instead of increasing. A negative cost-push inflation will therefore happen.
b. This will lead to a shift right in the Phillips curve to reflect that inflation has fallen. It will increase the output gap between Potential and Actual GDP because a lower inflation means more unemployment which means the economy is shrinking.
The black dot will shift right to (0, -2)
Fatuma invests a total of $22,000 in two accounts. The first account earned a rate of return of 15% (after a year). However, the second account suffered a 7% loss in the same time period. At the end of one year, the total amount of money gained was $110.00. How much was invested into each account
Answers
Answer:
$7,500 was invested in the account that gained 15%, while $14,500 was invested in the account that lost 7%.
Explanation:
Given that Fatuma invests a total of $ 22,000 in two accounts, and the first account earned a rate of return of 15% after a year while the second account suffered a 7% loss in the same time period, and at the end of one year the total amount of money gained was $ 110.00, to determine how much was invested into each account, the following calculation must be performed:
11,000 x 0.15 - 11,000 x 0.07 = 880
5,000 x 0.15 - 17,000 x 0.07 = -440
8,000 x 0.15 - 14,000 x 0.07 = 220
7,000 x 0.15 - 15,000 x 0.07 = 0
7,500 x 0.15 - 14,500 x 0.07 = 110
Therefore, $ 7,500 was invested in the account that gained 15%, while $ 14,500 was invested in the account that lost 7%.
On December 31, 2018, a company had assets of $20 billion and stockholders' equity of $16 billion. That same company had assets of $40 billion and stockholders' equity of $13 billion as of December 31, 2019. During 2019, the company reported total sales revenue of $13 billion and total expenses of $11 billion. What is the company's debt-to-assets ratio on December 31, 2019
Answers
Answer:
62.50 %
Explanation:
Debt-to-assets ratio = Interest bearing debt / total assets x 100
where,
Accounting Equation :
Assets = Equity + Liability
also stated,
Liability = Assets - Equity
therefore
Interest bearing debt = Assets - Equity
Equity = Stocks + Retained Earnings
for 2019
Equity = $13 billion + ($13 billion - $11 billion) = $15 billion
Interest bearing debt = $40 billion - $15 billion = $25 billion
therefore,
Debt-to-assets ratio = $25 billion / $40 billion x 100 = 62.50 %
Conclusion
The company's debt-to-assets ratio on December 31, 2019 is 62.50 %
You decide that structural changes must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams. What should you do? Select an option from the choices below and click Submit. Merge the independent procurement teams of each SBU into a single procurement division serving all product lines. Create a cross-department team to investigate in depth how the problems arose and to offer suggestions on how to deal with them. Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Answers
Answer:
One of the required structural changes that must be made immediately at Holden Evan to deal with the problems caused by the three SBU marketing teams is:
Merge the three marketing teams of each SBU into a single marketing division serving all product lines.
Explanation:
The marketing department is not a product-based team. Therefore, a marketing team should not be tied to just one SBU. The SBU structure can be continued. But the combination of the marketing teams into a single group creates synergy, avoids effort duplication, reduces competitiveness among the various teams, and above all, helping the group' brand managers to utilize accumulated resources, knowledge,and information of the entire marketing organization for the benefit of the different SBUs.
explain the following definition of marketing ethics
Answers
Answer:
Explanation:
The concept of ethical marketing refers to the way in which companies and / or enterprises market their goods and services: the focus does not only revolve around the benefits of their offer for customers, but also on how they impact on causes and / or responsible actions with society and / or the environment ..
Scare-2-B-U (S2BU) specializes in costumes for all occasions. The average price of each of its costumes is $310. For each occasion, S2BU receives a 20 percent deposit two months before the occasion, 50 percent the month before, and the remainder on the day the costume is delivered. Based on information at hand, managers at S2BU expect to make costumes for the following number of occasions during the coming months.
April 40
May 35
June 20
July 30
August 55
September 120
Required:
(a) What are the expected revenues for S2BU for each month, April through September? Revenues are recorded in the month of the occasion.
(b) What are the expected cash receipts for each month, April through July?
Answers
Answer:
Scare-2-B-U (S2BU)
a) The expected revenues for each month:
Month Number of Occasions Expected Revenue
April 40 $12,400
May 35 10,850
June 20 6,200
July 30 9,300
August 55 17,050
September 120 37,200
Total 300 $93,000
b) The expected cash receipts:
April May June July
Expected revenue $12,400 $10,850 $6,200 $9,300
20% 2 months $1,240 $1,860 $3,410 $7,440
50% 1 month 5,425 3,100 4,650 8,525
30% delivery date 3,720 3,255 1,860 2,790
Cash receipts $10,385 $8,215 $9,920 $18,755
Explanation:
a) Data and Calculations:
Average selling price for each costume = $310
Cash Collections:
20% 2 months before delivery
50% 1 month before delivery
30% on the delivery date
Month Number of Occasions Expected Revenue
April 40 $12,400
May 35 10,850
June 20 6,200
July 30 9,300
August 55 17,050
September 120 37,200
Total 300 $93,000
April May June July August Sept.
Expected revenue $12,400 $10,850 $6,200 $9,300 $17,050 $37,200
20% 2 months $1,240 $1,860 $3,410 $7,440
50% 1 month 5,425 3,100 4,650 8,525 $18,600
30% delivery date 3,720 3,255 1,860 2,790 5,115 $11,160
Cash receipts $10,385 $8,215 $9,920 $18,755
Select the communication type that is being used in the following example.
Two coworkers near the copy machine are discussing the upcoming company meeting.
o external formal communication
o external informal communication
O internal formal communication
O internal informal communication
Thing
Answers
Answer:
When the federal government spends more money than it receives in taxes in a ... spending over time in nominal dollars is misleading because it does not take ... defense spending as a share of GDP has generally declined since the 1960s, ... Healthcare expenditures include both payments for senior citizens (Medicare), ...
Explanation:
Nie choice
Remedies available to a patent owner whose patent rights have been infringed include all of the following except
- an injunction
- attorney fees
- maximum monetary damages
- minimum monetary damages
Answers
Answer: maximum monetary damages
Explanation:
Answer: attorney fees
Explanation:
edge 2021
The following transactions occurred during June: June 1 Purchased two new maintenance carts (noncurrent assets) on account at $750 each. Payment is due in 30 days. June 8 Accepted $500 of advance payments from customers for services to be provided next month. June 15 Received the June utility bill for $300. Payment is due and made in 30 days. June 20 Billed customers for $1,500 services provided. Payment is due in 30 days. June 30 Received $500 from customers who were billed on June 20. What journal entry is required to record the purchase of the carts on June 1
Answers
Answer:
Journal Entry to record the purchase of the carts on June 1:
June 1:
Debit Maintenance Equipment $1,500
Credit Accounts Payable $1,500
To record the purchase of 2 maintenance carts on account.
Explanation:
a) Data and Analysis:
June 1 Maintenance Equipment $1,500 Accounts Payable $1,500
June 8 Cash $500 Unearned Service Revenue $500
June 15 Utility Expense $300 Utility Payable $300
June 20 Accounts Receivable $1,500 Service Revenue $1,500
June 30 Cash $500 Accounts Receivable $500
Presented below are certain account balances of Swifty Products Co. Rent revenue $6,980 Sales discounts $8,170 Interest expense 13,320 Selling expenses 99,730 Beginning retained earnings 114,520 Sales revenue 405,100 Ending retained earnings 134,450 Income tax expense 27,776 Dividend revenue 71,430 Cost of goods sold 166,455 Sales returns and allowances 12,730 Administrative expenses 88,620 Allocation to noncontrolling interest 17,320 From the foregoing, compute the following: (a) total net revenue, (b) net income, (c) income attributable to controlling stockholders, if Swifty has allocation to noncontrolling interest of $17,320. (a) Total net revenue $enter total net revenue in dollars (b) Net income $enter net income in dollars (c) Income attributable to controlling stockholders $enter income attributable to controlling stockholders in dollars
Answers
Answer and Explanation:
The computation is shown below:
a
Sales revenue $405,100
Add: Rent revenue $6,980
Add: Dividend revenue $71,430
Less: Sales returns and allowances $(12730)
Less: Sales discounts $(8170)
a
Sales revenue 405100
Add: Rent revenue 6980
Add: Dividend revenue 71430
Less: Sales returns and allowances (12730)
Less: Sales discounts (8170)
Total net revenue $462,610
b
Total net revenue $462,610
Less: Expenses
Interest expense $13,320
Selling expenses $99,730
Income tax expense $27,776
Cost of goods sold $166,455
Administrative expenses $88,620
Total Expenses $395,901
Net income $66,709
c
Net income $66,709
Less: Allocation to noncontrolling interest $17,320
Income attributable to controlling stockholders $49,389
45.18
What gives the US government the power to collect taxes?
o the Constitution
O laws passed by Congress
O an executive order
common law
Mark this and return
Save and Exit
Next
Submit
What gives the US government the right to collect taxes?
Answers
"The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $150,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 6% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030?"
Answers
Answer:
FV= $1,873,697.4
Explanation:
Giving the following formula:
Annual deposit= $150,000
Number of periods= 9 years compound periods (10 deposits)
Interest rate= 6%
To calculate the future value, we need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {150,000*[(1.06^9) - 1]} / 0.06 + 150,000
FV= 1,723,697.4 + 150,000
FV= $1,873,697.4
Which of the following is the index used to measure changes in gross domestic product?
A) implicit GDP price deflator
B) producer price index (PPI)
C) wage-price spiral
D) consumer price index (CPI)
Answers
Answer:
implicit GDP price deflator.
Tangen Corporation is considering the purchase of a machine that would cost $380,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $80,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $104,000. The company requires a minimum pretax return of 14% on all investment projects. The net present value of the proposed project is closest to:
Answers
Answer: $60,872
Explanation:
First calculate the present value of the cash benefits of this investment:
= Present value of cost savings + present value of salvage value
= (104,000 * Present value interest factor of Annuity,6 years, 14%) + [80,000 / (1 + 14%)⁶]
= (104,000 * 3.8887) + 36,446.92381
= $440,872
Net Present value = Present value of cash benefits - Investment cost
= 440,872 - 380,000
= $60,872
Which statement describes the word “iterative”?
Answers
Answer:
D.
Explanation:
The word 'iterative' is derived from the Latin word 'iterare', which means 'to repeat.'
Iterative is a term used to define a process of repetition to attain the desired outcome. It is a repetitive process performed to improve or do better than before.
The statement that correctly defines the term 'iterative' is option D. The statement talks about working in cycles (repetition) to get a desired result of (refined product).
Therefore, option D is correct.
what is the most important contribution of the hawthorne studies
Answers
The Hawthorne studies taught managers that communication with the employees is essential for higher productivity and efficiency. One theory in the human relations subject which is criticised is Maslow's hierarchy of needs.
Suppose a supply shock shifts the aggregate supply curve from AS1 to AS2, and decreases output below full employment. If the Fed then decreases the money supply, it will Group of answer choices decrease the price level and shift the aggregate demand curve to the right until output returns to its full-employment level stabilize the price level and return output to its full-employment level stabilize the price level, but cause a further decline in output increase both output and the price level return output to its full-employment level, but at the expense of an increase in the price level
Answers
Answer: Stabilize the price level, but cause a further decline in output
Explanation:
If the Fed decreases the money supply, there will be less money in the economy therefore people will demand goods and services less.
This will shift the Aggregate demand curve to the left where it will intersect with the AS2 curve at a price level lower than the price level as a result of the supply shock thereby stabilizing the price level.
This would however, result in a further drop in output as there is now less demand for goods so suppliers will produce less.
paid rent 4500and salaries for the month 10000
Answers
rent account Dr
to cash account
salaries account Dr
to cash account
Find below the financial statements for Kenning Corp. Income Statement Balance Sheet Sales $5,000 Assets $14,800 Debt $11,000 Costs 3,410 Equity 3,800 Net income $1,590 Total $14,800 Total $14,800 Assume no income taxes. Assets and costs are proportional to sales. Debt and equity are not. No dividends are paid and next year's sales are projected to be $5,970. What is the EFN?
Answers
Answer: $972.74
Explanation:
From the information given, the external finance is calculated thus:
Sales growth = ($5970 - $5000) / $5000 × 100 = $970/$5000 × 100 = 19.4%
Then, we calculate the net income which will be:
= Sales - Cost
= $5970 - ($3410 × 1.194)
= $5970 - $4071.54
= $1898.46
Total asset = $14800 × 1.194 = $17671.20
Total equity = $3800 + $1898.46 = $5698.46
External financing needed:
= Total assets - Total equity - Debt
= $17671.20 - $5698.46 - $11,000
= $972.74
The new proposed project needs to use an expensive medical equipment that is already owned by the company. The purchase price of this equipment is $640,000 . The company also spent $71,000 to update its operating software. The equipment recieved a recent market bid from an interested buyer of $768,000. The current book value of $525,000. If the company decides to use this equipment for the new project , what value should we use for this equipment to be included in the initial cash flow of the project
Answers
Answer:
$525,000
Explanation:
Given that
The purchase price of an equipment $640,000
The company spend on operating software is $71,000
The recent market bid is $768,000
And, the current book value is $525,000
As the company decided to use the equipment for the new project so the amount that should be included in the initial cash flow would be $525,000 as the same would be presented on the balance sheet. It would be the cash outflow for the company