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Concept explainers
(a)
Assets: Assets refer to those resources that an organization owns, against which the organization derives a value in the future.
Cost of Asset: Cost of an asset refers to the total amount of expenditure that is incurred to acquire the asset and to make it ready for use.
Amortization: Amortization refers to the amount of depreciation expense charged on an intangible asset. Amortization results in the decreased value of an intangible asset.
Statement of
It has following three parts:
- Cash flow from operating activities
- Cash flow from investing activities
- Cash flow from financing activities.
Intangible Assets: Intangible assets refer to those assets owned by the organization which do not have a physical appearance but are used to generate a value for the business.
To identify: The total cost and book value of property, plant, and equipment on September 28, 2013.
(b)
To identify: The amount of depreciation and amortization expense for 2011-2013.
(c)
To identify: The amount of capital spending in 2013 and 2012.
(d)
To identify: The statement in which intangible assets disclosed and its types on September 28, 2013.
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Chapter 10 Solutions
Accounting Principles - Standalone book
- REQUIRED Study the information given below and answer the following questions. Where discount factors are required use only the four decimals present value tables that appear after the formula sheet or in the module guide. Ignore taxes. 5.1 Calculate the Accounting Rate of Return on average investment of the second alternative (expressed to two decimal places). 5.2 Determine which of the two investment opportunities the company should choose by calculating the Net Present Value of each alternative. Your answer must include the calculation of the present values and NPV. 5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION The management of Bentall Incorporated is considering two investment opportunities: (5 marks) (9 marks) (6 marks) The first alternative involves the purchase of a new machine for R900 000 which…arrow_forwardREQUIRED Use the information provided below to answer the following questions: 4.1 Calculate the weighted average cost of capital (expressed to two decimal places). Your answer must include the calculations of the cost of equity, preference shares and the loan. 4.2 Calculate the cost of equity using the Capital Asset Pricing Model (expressed to two decimal places). (16 marks) (4 marks) INFORMATION Cadmore Limited intends raising finance for a proposed new project. The financial manager has provided the following information to determine the present cost of capital to the company: The capital structure consists of the following: ■3 million ordinary shares issued at R1.50 each but currently trading at R2 each. 1 200 000 12%, R2 preference shares with a market value of R2.50 per share. R1 000 000 18% Bank loan, due in March 2027. Additional information The company's beta coefficient is 1.3. The risk-free rate is 8%. The return on the market is 18%. The Gordon Growth Model is used to…arrow_forwardA dog training business began on December 1. The following transactions occurred during its first month. Use the drop-downs to select the accounts properly included on the income statement for the post-closing balancesarrow_forward
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