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Answer:

1. Depreciation expense per mile = $0.27 per mile

2-1. The straight-line method

We have:

Depreciation expense for 2020 = $3,375

Depreciation expense for 2021 = $3,375

2-2. Units-of-activity method

We have:

Depreciation expense for 2020 = $4,347

Depreciation expense for 2021 = $3,456

2-3. The double-declining-balance method

We have:

Depreciation expense for 2020 = $7,300

Depreciation expense for 2021 = $5,475

3. See the journal entries below.

4. Net book value = $25,825

Explanation:

1. Calculate depreciation expense per mile under units-of-activity method.

Depreciation expense per mile = (Purchase price delivery truck - Expected salvage value) / Expected driven miles = ($29,200 - $2,200) / 100,000 = $0.27 per mile

2. Compute depreciation expense for 2020 and 2021 using (1) the straight-line method, (2) the units-of-activity method, and (3) the double- declining-balance method.

2-1. The straight-line method

Annual depreciation expense = (Purchase price of the delivery truck - Expected salvage value) / Estimated useful life = ($29,200 - $2,200) / 8 = $3,375

Therefore, we have:

Depreciation expense for 2020 = Annual depreciation expense = $3,375

Depreciation expense for 2021 = Annual depreciation expense = $3,375

2-2. Units-of-activity method

Depreciable amount = Purchase price of the delivery truck - Expected salvage value = $29,200 - $2,200 = $27,000

Therefore, we have:

Depreciation expense for 2020 = Depreciable amount * (Actual miles driven in 2020 / Expected driven miles) = $27,000 * (16,100 / 100,000) = $4,347

Depreciation expense for 2021 = Depreciable amount * (Actual miles driven in 2021 / Expected driven miles) = $27,000 * (12,800 / 100,000) = $3,456

2-3. The double-declining-balance method

Straight-line method depreciation rate = 1 / Estimated useful life = 1 / 8 = 0.1250, or 12.50%

Double-declining-balance method depreciation rate = Straight-line method depreciation rate * 2 = 12.50% * 2 = 25%

Therefore, we have:

Depreciation expense for 2020 = Purchase price of the delivery truck * Double-declining-balance method depreciation rate = $29,200 * 25% = $7,300

Depreciation expense for 2021 = (Purchase price of the delivery truck - Depreciation expense for 2020) * Double-declining-balance method depreciation rate = ($29,200 - $7,300) * 25% = $5,475

3. Prepare the journal entry to record 2020 depreciation.

3-1. The straight-line method

Date       Particulars                                              Debit ($)          Credit ($)  

2020      Depreciation expense                            3,375

                Accumulated dep. – Delivery truck                                  3,375

             (To record 2020 depreciation expense.)                                          

3-2. Units-of-activity method

Date       Particulars                                              Debit ($)          Credit ($)  

2020      Depreciation expense                              4,347

                Accumulated dep. – Delivery truck                                 4,347

             (To record 2020 depreciation expense.)                                          

3-3. The double-declining-balance method

Date       Particulars                                              Debit ($)          Credit ($)  

2020      Depreciation expense                              7,300

                Accumulated dep. – Delivery truck                                 7,300

             (To record 2020 depreciation expense.)                                          

4. Assume that Marigold uses the straight-line method. Show how the truck would be reported in the December 31, 2020, balance sheet.

Tamarisk, Inc.

Balance sheet (Partial)

As at the Year Ended December 31, 2020

Details                                                    $                

Fixed Assets

Delivery truck                                   29,200

Accumulated depreciation               (3,375)  

Net book value                                 25,825  

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Initial investment= $270,000

Cash flow= $60,000

Number of years= 5

Discount rate= 12%

To calculate the net present value (NPV), we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

∑[Cf/(1+i)^n]:

Cf1= 60,000/1.12= 53,571.43

Cf2= 60,000/1.12^2= 47,831.63

.....

Cf5= 60,000/1.12^5= 34,045.61

∑[Cf/(1+i)^n]= 216,286.57

Now, the NPV:

NPV= -270,000 + 216,286.57

NPV= -53,713.43

Answer:

Corporate culture, also known as company culture, refers to a set of beliefs and behaviors that guide how a company’s management and employees interact and handle external business transactions.

Answer:

The company has incorrectly credited the sales revenue account at the time of the receipt of payment. So, the  journal entry to record the transaction is as follows:

Date               Particulars                            Debit          Credit

March 1, 20    Sales Revenue A/c           $45,000

                             To Unearned Sales Revenue A/c   $45,000

                       (To record Unearned sales revenue)