Three different companies each purchased trucks on January 1, Year 1, for $82,000. Each truck was expected to last four years or250,000 miles. Salvage value was estimated to be $7,000. All three trucks were driven 79,000 miles in Year 1, 56,000 miles in Year 2,51,000 miles in Year 3, and 71,000 miles in Year 4. Each of the three companies earned $71,000 of cash revenue during each of thefour years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C usesunits-of-production depreciation.Answer each of the following questions. Ignore the effects of income taxes.Requireda-1. Calculate the net income for Year 1a-2. Which company will report the highest amount of net income for Year 1?b-1. Calculate the net income for Year 4.b-2. Which company will report the lowest amount of net income for Year 4?c-1. Calculate the book value on the December 31, Year 3, balance sheetc-2. Which company will report the highest book value on the December 31, Year 3, balance sheet?d-1. Calculate the retained earnings on the December 31, Year 4, balance sheet.d-2. Which company will report the highest amount of retained earnings on the December 31, Year 4, balance sheet?e. Which company will report the lowest amount of cash flow from operating activities on the Year 3 statement of cash flows?Complete this question by entering your answers in the tabs below.Required A Required Ba-1a 1. Calculate the net income for Year 1. (Round "Per Unit Cost" to 3 decimal places)a-2. Which company will report the highest amount of net income for Year 13a-2Required C Required DCompany ACompany BCompany CHighest net incomeRequired ENet IncomeRequired B >

Net Income refers to the total revenue or earnings generated by a company after deducting all…

a 1. Calculate the net income for Year 1. (Round "Per Unit Cost" to 3 decimal places a-2. Which company will report the highest amount of net income for Year 12 a-1 a-2 Company A Company B Company C Highest net income Net Income

a 1. Calculate the net income for Year 1. (Round "Per Unit Cost" to 3 decimal places a-2. Which company will report the highest amount of net income for Year 12 a-1 a-2 Company A Company B Company C Highest net income Net Income

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Three different companies each purchased trucks on January 1, Year 1, for $76,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $6,000. All three trucks were driven 81,000 miles in Year 1, 55,000 miles in Year 2, 46,000 miles in Year 3, and 71,000 miles in Year 4. Each of the three companies earned $65,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double- declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. a-1. Calculate the net income for Year 1. a-2. Which company will report the highest amount of net income for Year 1? b-1. Calculate the net income for Year 4. b-2. Which company will report the lowest amount of net income for Year 4?
Three different companies each purchased trucks on January 1, Year 1, for $74,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $6,000. All three trucks were driven 78,000 miles in Year 1, 55,000 miles in Year 2, 50,000 miles in Year 3, and 70,000 miles in Year 4. Each of the three companies earned $69,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double- declining-balance depreciation, and company C uses units-of- production depreciation. Answer each of the following questions. Ignore the effects of income taxes. Required a-1. Calculate the net income for Year 1. a-2. Which company will report the highest amount of net income for Year 1? b-1. Calculate the net income for Year 4. b-2. Which company will report the lowest amount of net income for Year 4? c-1. Calculate the book value on the December 31, Year 3, balance sheet. c-2. Which company will report the highest book…
Three different companies each purchased trucks on January 1, Year 1, for $54,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 76,000 miles in Year 1, 65,000 miles in Year 2, 42,000 miles in Year 3, and 71,000 miles in Year 4. Each of the three companies earned $43,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. Required a-1. Calculate the net income for Year 1. a-2. Which company will report the highest amount of net income for Year 1? b-1. Calculate the net income for Year 4. b-2. Which company will report the lowest amount of net income for Year 4? c-1. Calculate the book value on the December 31, Year 3, balance sheet. c-2. Which company will report the…
Three different companies each purchased trucks on January 1, 2018, for $70,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 41,000 miles in 2019, 39,000 miles in 2020, and 61,000 miles in 2021. Each of the three companies earned $59,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. given the info above, compute the book value
Three different companies each purchased trucks on January 1, 2018, for $70,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 41,000 miles in 2019, 39,000 miles in 2020, and 61,000 miles in 2021. Each of the three companies earned $59,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. given the info above, compute the net income
Three different companies each purchased trucks on January 1, 2018, for $70,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 41,000 miles in 2019, 39,000 miles in 2020, and 61,000 miles in 2021. Each of the three companies earned $59,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. given the following information compute the net income
Three different companies each purchased trucks on January 1, 2018, for $70,000. Each truck was expected to last four years or 200,000 miles. Salvage value was estimated to be $5,000. All three trucks were driven 66,000 miles in 2018, 41,000 miles in 2019, 39,000 miles in 2020, and 61,000 miles in 2021. Each of the three companies earned $59,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. calculate the net income using the given info
Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 75,000 miles in 2018, 60,000 miles in 2019, 50,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $51,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. Which company will report the lowest amount of cash flow from operating activities on the 2020 statement of cash flows? The cash flow from operating activities will beforif income tax is not considered.Depreciation expensea cash flow item.
On January 2, Gannon Co. purchases and installs a new machine costing $312,000 with a five-year life and an estimated $28,000 salvage value. Management estimates the machine will produce 1,136,000 units of product during its life. Actual production of units is as follows: year 1: 245,600; year 2: 230,400; year 3: 227,000; year 4: 232,600; and year 5: 211,200. The total number of units produced by the end of year 5 exceeds the original estimate – this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.) Compute depreciation for each year (and total depreciation for all years combined) for the machine under straight-line and units-of-production depreciation methods. You will use the form for Problem 9 and then upload the form to this problem. Note: You do not have to use the area for calculating the units of production. This is just a work area. If you do use it, make sure that your final answers are put into the table with…
Three different companies each purchased trucks on January 1, 2018, for $62,000. Each truck was expected to last four years or 250,000 miles. Salvage value was estimated to be $2,000. All three trucks were driven 75,000 miles in 2018, 60,000 miles in 2019, 50,000 miles in 2020, and 70,000 miles in 2021. Each of the three companies earned $51,000 of cash revenue during each of the four years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation. Answer each of the following questions. Ignore the effects of income taxes. c-1. Calculate the book value on the December 31, 2020, balance sheet? (Round "Per Unit Cost" to 3 decimal places.) c-2. Which company will report the highest book value on the December 31, 2020, balance sheet? multiple choice Company A Company B Company C All of the choices
ABC company pays $262,500 for equipment expected to last four years and have a $30,000 salvage value. Prepare journal entries to record the following costs related to the equipment:1.During the second year of the equipment’s life, $21,000 cash is paid for for a new component expected to increase the equipment’s productivity by 10% a year.2. During the 3rd year ,$5,250 cash is paid for normal repairs necessary to keep the equipment in good working order.3. During the 4th year, $13,950 is paid for repairs expected to increase the useful life of the equipment from 4 to 5 years.
On January 1, Manning Co. purchases and installs a new machine costing $324,000 with a five-year life and an estimated $30,000 salvage value. Management estimates the machine will produce 1,470,000 units of product during its life. Actual production of units is as follows: 355,600 in Year 1, 320,400 in Year 2, 317,000 in Year 3, 343,600 in Year 4, and 138,500 in Year 5. The total number of units produced by the end of Year 5 exceeds the original estimate—this difference was not predicted. Note: The machine cannot be depreciated below its estimated salvage value. Required: Prepare a table Units-of-production: Year Number of Units Depreciation per Unit Depreciation Expense 1 2 3 4 5 Totals Double-declining-balance: Year Beginning Book Value Annual Depreciation (40% of book value) Accumulated Depreciation at Year-End Ending Book Value ($324,000 Cost less Accumulated Depreciation) 1 2…