1) An asset was purchased for $71,000 and originally estimated to have a useful life of...
1)
An asset was purchased for $71,000 and originally estimated to have a useful life of 10 years with a residual value of $3,400. After two years of straight-line depreciation, it was determined that the remaining useful life of the asset was only 2 years with a residual value of $1,360.
a. Determine the amount of the annual
depreciation for the first two years.
$
b. Determine the book value at the end of Year
2.
$
c. Determine the depreciation expense for each
of the remaining years after revision.
$
2)
Based on the following data and using a 365-day year:
| 12/31/Year 1 accounts receivable | $100,000 |
| 12/31/Year 2 accounts receivable | 70,000 |
| For the year ended 12/31/Year 1, sales | 1,050,000 |
| For the year ended 12/31/Year 2, sales | 1,200,000 |
a. Compute the accounts receivable turnover for year 2. Round your answer to two decimal places.
b. Compute the number of days' sales in
receivables for year 2. Round your answer to two decimal
places.
days
c. The industry average turnover is 20 times
during the year, and the number of days' sales in receivables
averages 25. How does this situation compare to the industry
average?
Homework Answers
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1)
An asset was purchased for $71,000 and originally estimated to
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