Bill has just returned from a duck hunting trip. He brought home eight ducks. Bill’s friend, John, disapproves of duck hunting,
and to discourage Bill from further hunting, John presented him with the following cost estimate per duck: Camper and equipment: Cost, $17,000; usable for eight seasons; 14 hunting trips per season $ 152 Travel expense (pickup truck): 100 miles at $0.38 per mile (gas, oil, and tires—$0.28 per mile; depreciation and insurance—$0.10 per mile) 38 Shotgun shells (two boxes per hunting trip) 30 Boat: Cost, $2,480, usable for eight seasons; 14 hunting trips per season 22 Hunting license: Cost, $30 for the season; 14 hunting trips per season 2 Money lost playing poker: Loss, $28 (Bill plays poker every weekend whether he goes hunting or stays at home) 28 Bottle of whiskey: Cost, $20 per hunting trip (used to ward off the cold) 20 Total cost $ 292 Cost per duck ($292 ÷ 8 ducks) $ 36 Required: 1. Assuming the duck hunting trip Bill has just completed is typical, what costs are relevant to a decision as to whether Bill should go duck hunting again this season? 2. Suppose Bill gets lucky on his next hunting trip and shoots 14 ducks using the same amount of shotgun shells he used on his previous hunting trip to bag 8 ducks. How much would it have cost him to shoot the last six ducks
2 answers:
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Answer:
See explanation Section Below:
Explanation:
Requirement A
Kochi Services
Journal entry
1. May 1 Cash Debit INR40,000
Capital Credit INR40,000
<em>(Invested cash as sole owner but not for common stock)</em>
2. No entry required
<em>(Because the owner has not paid the wages for the employees)</em>
3. Prepaid Rent Debit INR24,000
Cash Credit INR24,000
<em>(Signed a rental agreement of 2 years for a warehouse by paying cash in advance)</em>
4. Furniture and Equipment Debit INR30,000
Cash Credit INR10,000
Accounts payable Credit INR20,000
<em>(Purchase furniture and equipment on account and cash)</em>
5. Prepaid Insurance Debit INR1,800
Cash Credit INR1,800
<em>(Paid insurance in advance for furniture and equipment)</em>
6. Office supplies Debit INR420
Cash Credit INR420
<em>(Paid cash for office supplies)</em>
7. Office supplies Debit INR1,500
Accounts payable Credit INR1,500
<em>(Purchase office supplies on account)</em>
8. Cash Debit INR8,000
Accounts receivable Debit INR12,000
Revenues Credit INR20,000
<em>(Receive cash for providing services and performed services on account)</em>
9. Accounts payable Debit INR400
Cash Credit INR400
<em>(Paid cash for office supplies due on transaction 7)</em>
10. Cash Debit INR3,000
Accounts receivable Credit INR3,000
<em>(Receive cash from customers due on transaction 8)</em>
11. Utilities expense Debit INR380
Utilities payable Credit INR380
<em>(Utilities bill to be paid on the next month)</em>
12. Salaries expense Debit INR6,100
Cash Credit INR6,100
(Paid cash on salaries expenses)
Requirement B
See the image below
Requirement C
Kochi Services
Trial Balance
May 31, 2020
Account Title Debit (INR) Credit (INR)
Cash 8,280
Accounts Receivable 9000
Capital 40,000
Prepaid Rent 24,000
Furniture & Equipment 30,000
Prepaid Insurance 1,800
Salaries Expense 6,100
Accounts Payable 21,100
Utilities Expense 380
Revenues 20,000
Office Supplies 1920
<u>Utilities Payable 380 </u>
Total INR 81,480 INR 81,480
Answer:
18.37%
Explanation:
The internal rate of return is the return at which the net present value comes to zero
Here the net present value is the value at which the present cash inflows after discounting factor is exceeded then the initial investment. If this thing happens then the project would be accepted otherwise it would be rejected
The computation of the range of the plant IRR is to be shown in the attachment below.
Please find the attachmentHence, the internal rate of return is 18.37%
