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LUCKY_DIMON [66]
2 years ago
14

A company bought new heating system for $64,000 and was given a trade-in of $3,400 on an old heating system, so the company paid

$60,600 cash with the trade-in. The old system had an original cost of $57,800 and accumulated depreciation of $52,200. If the transaction has commercial substance, the company should record the new heating system at:
Business
1 answer:
zheka24 [161]2 years ago
7 0

Answer:

$64,000

Explanation:

The Cost price of the item Acquired is measured at fair value. When the Fair Value of Both the Asset Acquired and Asset given up can be determined reliably, the fair value of the asset given up will be used. Unless, the fair value of the asset acquired is more evident, that value may be used.

<u>Measurement of New Heating System :</u>

Cash                           $60,600

Add Trade In Value      $3,400

Total                           $64,000

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2 years ago
For the most recent year, Camargo, Inc., had sales of $546,000, cost of goods sold of $244,410, depreciation expense of $61,900,
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Answer:

Explanation:

As we know that time interest earned ratio = Income before interest and taxes / interest expense.

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less: cost of goods sold                                                            =  (<u>244410</u>)

            Gross profit                                                                       301590

Less: <u>expenses</u>

          Depreciation expense                                                      =( <u>61900   </u>)    

         Profit before interest and taxes                                         239690

Less: tax

      (239690 * 23%)                                                                =   (<u>55128</u>)            

                         Profit                                                                   184562

Profit - Retained earning Addition  = Interest

      184562 - 74300 = 110262.

Interest earned ratio = 239690 / 110262 = 2.17 times  

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