Colin spends 1/3 of his wages on rent and 1/4 on food. If he makes £636 per week, how much money does he have left?
2 answers:
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Answer:
$66,000
Step-by-step explanation:
Data provided in the question:
Purchasing cost of the machine = $320,000
Salvage value = $20,000
Useful life of the machine = 5 years
The gain on selling of the machine = $6,000
Now,
The annual depreciation of the machine
= [Cost - salvage value] ÷ ( Useful life )
= [ $320,000 - $20,000 ] ÷ 5
= $60,000
Accumulated depreciation from January 1, 2014 to May 1, 2018
= Annual depreciation × (Duration from January 1, 2014 to May 1, 2018 )
= $60,000 × ( 4 years 4 months )
= $60,000 × years
[48 months + 4 months = 52 months]
= $260,000
Therefore,
Book value on May 1, 2018 = Cost - Accumulated depreciation
= $320,000 - $260,000
= $60,000
Now,
Gain = Selling cost - Book value
$6,000 = Selling cost - $60,000
or
Selling cost = $66,000
Hence,
cash Bogle received from the sale of the machinery was $66,000