sting Equipment $113,000 118,000 21,000 55,000 Replacement Equipment Cost Operating expenses Salvage value Useful life $112,000 96,000 12,000 6 years
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- Differential analysis report for machine replacement proposal Catalina Tooling Company is considering replacing a machine that has been used in its factory for two years. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Annual nonmanufacturing operating expenses and revenue are not expected to be affected by the purchase of the new machine. Instructions List other factors that should be considered before a final decision is reached.Problem 9 Mel Company acquired a new machinery On August 15, 2022. The following data are available: P 1,400,000 20,000 40,000 15,000 50,000 30,000 Invoice price Cash discount available but not taken on purchase Freight paid on the new machinery Cost of removing the old machinery Installation cost of the new machinery Testing cost before the new machinery was put into regular operation Proceeds from the sale of samples produced during testing Cost of training employees which improved their efficiency Loss on premature retirement of the old machinery Estimated cost of manufacturing similar machinery in the entity's own plant, including overhead Compute for the cost of the new machinery 5,000 10,000 5,000 1,300,000Reference: Case Study S Dunn Manufacturing is considering the following two alternatives. The cost information for the two proposals for replacing an equipment are provided are in table below. Initial cost Benefits/year Machine X $120,000 $20,000 for the first 10 years and $9,000 for the next 10 years Life Salvage value $40,000 MARR 5.2. The NPW of machine X is A) $35,158 B) $48,192 C) $50,752 Machine Y $96,000 $12,000 per year for 20 years. 20 years 8% $20,000
- Problem 9Hilarious Company provided the following data pertaining to machinery on the date of revaluation: Cost Replacement costMachinery 4, 500, 000 7, 500, 000Accumulated depreciation 900, 000 Age of asset 3 yearsRevised Life of the asset 10 years Required:1. Appreciation or revaluation increase2. Carrying amount3. Depreciated replacement cost4. Revaluation surplus5. What is the original life of the asset?6. Prepare the journal entry to record the revaluation 7. What is/are the rules in solving the problem?es Problem 12-27 (Algo) MACRS depreciation and net present value [LO12-4] Universal Electronics is considering the purchase of manufacturing equipment with a 10-year midpoint in its asset depreciation range (ADR). Carefully refer to Table 12-11 to determine in what depreciation category the asset falls. (Hint: It is not 10 years.) The asset will cost $220,000, and it will produce earnings before depreciation and taxes of $72,000 per year for three years, and then $35,000 a year for seven more years. The firm has a tax rate of 25 percent. Assume the cost of capital is 14 percent. In doing your analysis, if you have years in which there is no depreciation, merely enter a zero for depreciation. Use Table 12-12. Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods. a. Calculate the net present value. Note: Do not round intermediate calculations and round your answer to 2 decimal places. Net present value b. Based on the…Exercise 6-17A (Algo) Asset replacement-opportunity cost LO 6-5 Thornton Freight Company owns a truck that cost $36,000. Currently, the truck's book value is $27,000, and its expected remaining useful life is five years. Thornton has the opportunity to purchase for $26,000 a replacement truck that is extremely fuel efficient. Fuel cost for the old truck is expected to be $5,000 per year more than fuel cost for the new truck. The old truck is paid for but, in spite of being in good condition, can be sold for only $18,000. Required Calculate the total relevant costs. Should Thornton replace the old truck with the new fuel-efficient model, or should it continue to use the old truck until it wears out? Answer is not complete. Keep Old Total relevant costs Should Thornton replace or continue the old truck? Return to question Replace With New Replace the old truck.
- Problem 13-41 Increasing Residual Income over Time (LO 13-2, 13-4, 13-5) Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life Salvage value at end of useful life Annual straight-line depreciation Annual income generated by asset (before deducting depreciation) Year 1 2 3 Use a 10 percent rate to compute the Imputed Interest charge. Required: Complete the following table. 4 5 Income Before Depreciation $620,000 Annual Depreciation 5 years $124,000 $186,000 Income Net of Depreciation Based on Net Book Value Imputed interest Residual Income Average Groce Charge Book Value Based on Gross Book Value Imputed Interest Charge Average Net Book Value Recidual Income22 The cost of the wicketer machine is as follows: Purchase Price R70 000 Installation R15 000 Staff Training R6 500 The machine has a useful life of 10 years and management's policy is to revalue the machine every two years from the date of purchase. The entity adopts the elimination method for revaluations. The machine is depreciated on a straight-line basis. An independent valuator who is a competent industry expert has determined the fair value of the machine to be R90 000 on the 2nd anniversary of the purchase of the machine. The Financial Director has also approved a policy that the revaluation surplus may be transferred to retained earnings as the asset is used. Required: Show all current year journal entries in respect of the Wicketer Machine up until the year ended 30 June 2022. Journal Narrations are required. Round all figures to the nearest Rand. Q.1.2Question 17 options: 8-7. Disposal of asset. Dump It is selling a machine that no longer is large enough for the production requirements. Dump It has had the machine for 3 years and has depreciated it using the straight-line method. Original cost had been $98,000, and salvage was estimated at $6,000. The machine had been expected to last for 8 years. (in all answers round to nearest dollar; do not use "$" or commas in your answer)
- Question 17 options: 8-7. Disposal of asset. Dump It is selling a machine that no longer is large enough for the production requirements. Dump It has had the machine for 3 years and has depreciated it using the straight-line method. Original cost had been $98,000, and salvage was estimated at $6,000. The machine had been expected to last for 8 years. (in all answers round to nearest dollar; do not use "$" or commas in your answer) Calculate the amount of annual depreciation on the asset. Calculate the amount of accumulated depreciation on the asset at the end of the third year. Calculate the book value of the asset at the end of the third year.Brief Exercise 11-15 (Algo) Change in principle; change in depreciation method [LO11-6] At the beginning of 2022, Robotics Incorporated acquired a manufacturing facility for $131 million $10.1 million of the purchase price was allocated to the building. Depreciation for 2022 and 2023 was calculated using the straight-line method, a 20-year useful life, and a $2.1 million residual value. In 2024, the company switched to the double-declining-balance depreciation method What is depreciation on the building for 2024? Note: Do not round intermediate calculations. Enter your answer in whole dollars rounded to the nearest whole number. DepreciationRequired information Exercise 11-23 (Algo) Change in estimate; useful life and residual value of equipment [LO11-2, 11-5] [The following information applies to the questions displayed below.] Wardell Company purchased a minicomputer on January 1, 2022, at a cost of $54,000. The computer was depreciated using the straight-line method over an estimated five-year life with an estimated residual value of $6,000. On January 1, 2024, the estimate of useful life was changed to a total of 10 years, and the estimate of residual value was changed to $3,600. Exercise 11-23 (Algo) Part 1 4 Required: 1. Prepare the year-end journal entry for depreciation on December 31, 2024. No depreciation was recorded during the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar.