1. A fixed asset with a cost of $27,000 and accumulated depreciation of $24,300 is sold for $4,590. What is the amount of the gain or loss on disposal of the fixed asset? a. $1,890 gain b. $2,700 gain c. $2,700 loss d. $1,890 loss 2. Z Company purchased an asset for $55,000 on January 1, Year 1. The asset was expected to have a four-year life and an $8,000 salvage value. What would be the amount of depreciation expense for Year 1 using double-declining balance? 3. The project requires $700,000 in assets and will be 100% equity financed. If EBIT is $60,000 and the tax rate is 35% and assuming the company has a large, positive income overall, what is ROE?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter11: Depreciation, Depletion, Impairment, And Disposal
Section: Chapter Questions
Problem 10RE: Assume the same information as in RE11-3, except that Albany Corporation purchased the asset on...
Question

provide answer with calculation

1. A fixed asset with a cost of $27,000 and accumulated depreciation of $24,300 is
sold for $4,590. What is the amount of the gain or loss on disposal of the fixed
asset?
a. $1,890 gain
b. $2,700 gain
c. $2,700 loss
d. $1,890 loss
2. Z Company purchased an asset for $55,000 on January 1, Year 1. The asset was
expected to have a four-year life and an $8,000 salvage value. What would be the amount of
depreciation expense for Year 1 using double-declining balance?
3. The project requires $700,000 in assets and will be 100% equity financed. If EBIT is
$60,000 and the tax rate is 35% and assuming the company has a large, positive income
overall, what is ROE?
Transcribed Image Text:1. A fixed asset with a cost of $27,000 and accumulated depreciation of $24,300 is sold for $4,590. What is the amount of the gain or loss on disposal of the fixed asset? a. $1,890 gain b. $2,700 gain c. $2,700 loss d. $1,890 loss 2. Z Company purchased an asset for $55,000 on January 1, Year 1. The asset was expected to have a four-year life and an $8,000 salvage value. What would be the amount of depreciation expense for Year 1 using double-declining balance? 3. The project requires $700,000 in assets and will be 100% equity financed. If EBIT is $60,000 and the tax rate is 35% and assuming the company has a large, positive income overall, what is ROE?
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning