Question

Question 1 x Your answer is incorrect. Try again. Pharoah Ltd, Incurs these expenditures in purchasing a truck: invoice price $46.090; installation of a trailer hitch $940; one-year accident Insurance policy $896; motor vehicle licence $158; painting and lettering $700. What is the cost of the truck? Cost of the truck 48084

Answer 1

Answer

1.

Cost of Truck = Invoice Price + Installation cost + Painting cost

= $46,090 + 940 + 700

Cost of Truck = $47,730

2.

Depreciation Rate = 2 * Straight Line Rate

= 2 * (1/4 years)

= 50%

Depreciation for 2018 = Cost * 50% * 8/12 months

= $81,720 * 50% * 8/12

Depreciation for 2018 = $27,240

Depreciation for 2019 = Book Value * 50%

= ($81,720 - 27,240) * 50%

Depreciation for 2019 = $27,240

3.

Asset Turnover Ratio

= Total Sales / Average Assets

2014

= $2,360 / {(2,044 + 2,593) / 2 }

= $2,360 / $2,318.5

= 1.018 Times

2015

= $2,415 / {(2,593 + 2,911) / 2 }

= $2,415 / $2,752

= 0.88 Times

Profit Margin Ratio

= (Net Income / Net Sales ) * 100

2014

= ($360 / $2,360) * 100

= 15.25%

2015

= ($237 / $2,415) * 100

= 9.81%

Return on Assets Ratio

= (Net Income / Total Assets) * 100

2014

= ($360 / $2,593) * 100

= 13.88%

2015

= ($237 / $2,911) * 100

= 8.14%

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