Posted by tonia on Saturday, November 5, 2011 at 2:47pm.
Three different companies each purchased a machine on January 1, 2012, for $54,000. Each machine was expected to last five years or 200,000 hours. Salvage value was estimated to be $4000. All three machines were operated for 50,000 hours in 2012, 55,000 hours in 2013, 40,000 hours in 2014, 44,000 hours in 2015, and 31, 000 hours in 2016. Each of the three companies earned $30,000 of cash revenue during each of the five years. Company A uses straight-line depreciation, company B uses double-declining-balance depreciation, and company C uses units-of-production depreciation.
Required
Answer each of the following questions. Ignore the effects of income taxes.
a. Which company will report the highest amount of net income for 2012?
b. Which company will report the lowest amount of net income for 2014?
c. Which company will report the highest book value on the December 31, 2014, balance sheet?
d. Which company will report the highest amount of retained earnings on the December 31, 2015, balance sheet?
e. Which company will report the lowest amount of cash flow from operating activities on the 2014 statement of cash flows?
No one has answered this question yet.
Answer this Question
Related Questions
accounting - A company purchased a machine on January 1 of the current year for...
accounting - Jay Corp. bought a machine for $15,000. The machine is expected to ...
Math - Oaktree Company purchased a new machine and made the following ...
Accounting - Alteran Corporation purchased a machine for 1.5 million in 2006. ...
math - Jay Corp. bought a machine for $15,000. The machine is expected to ...
accounting - Glenmore Corp. purchased a fax machine at the beginning of 2007. ...
Accounting - On January 1, 2006, Mythical purchased some office equipment, ...
MATH - A company makes three products X, Y and Z. Each product requires ...
MATH- please help! - A company makes three products X, Y and Z. Each product ...
finance - Nucore Company is thinking of purchasing a new candy-wrapping machine ...
For Further Reading
