Answer: rational
Explanation:
Rational expectations is a way by which individuals make their decisions based on their past experience, self interest, human rationality and the information that they have.
Therefore, when individuals acquire, process, and act on relevant economic information promptly in their own self-interest and investigate its impact on others, they are said to have rational expectations.
Game theory is useful for understanding oligopoly behavior because: there are so many firms in an oligopoly that all are price takers. firms must differentiate their products if they are to remain in business. firms recognize that because there are only a few firms mutual interdependence is important. without it firms would not be able to maintain cartel agreements. it allows firms to develop greater monopoly power.
Answer:
firms recognize that because there are only a few firms mutual interdependence is important.
Explanation:
Game theory is useful for understanding oligopoly behavior because firms recognize that because there are only a few firms mutual interdependence is important.
An oligopoly can be defined as a market structure comprising of a small number of firms (sellers) offering identical or similar products, wherein none can limit the significant influence of others.
Hence, under the game theory, when firms makes a decision about their business, it is expected that they consider how the other firms would react to such decisions.
Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means:
Answer:
Paul Hyatt is fully liable for all business debts
Explanation:
Unlimited liability in this scenario, means that Paul Hyatt is fully liable for all business debts. That is because unlimited liability is defined as the full legal responsibility that business owners and partners assume for all business debts, and since Paul Hyatt is a sole proprietor which means that he both owns and runs DeepCleans and there is no legal distinction between him and the business entity, then he is fully liable for debts and profits of DeepClean.
In 2008, the United States began to witness one of the worst recessions since the 1930s. The collapse of the housing bubble in 2006 led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of 2008–2009, several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example:________.
In January 2009, American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise.
The above is an example of:______.
A. Reorganization
B. Liquidation.
Answer:
B. Liquidation.
Explanation:
Liquidation is and aftermath of the inability of a company or establishment to meet up with her obligations at the required moment. Thus, the company folds-up, lay off her staff and stop operating. While reorganization is a form of restructuring in a company or establishment. It may involve change of positions and duties among capable staff.
The example in the given scenario is that of liquidation because it ceased from operation.
When using the equity method, receipt of cash dividends increases the carrying (book) value of an investment in equity securities.
A. True
B. False
Purple Corporation acquired 75 percent of Socks Corporation’s common stock on January 1, 20X8, for $435,000. At that date, Socks reported common stock outstanding of $300,000 and retained earnings of $200,000, and the fair value of the noncontrolling interest was $145,000. The book values and fair values of Socks's assets and liabilities were equal, except for other intangible assets, which had a fair value $80,000 more than book value and a 10-year remaining life. Purple and Socks reported the following data for 20X8 and 20X9
Socks Corporation Purple Corporation
Year Net Income Comprehensive income Dividends paid Operating income Dividens paid
20X8 $40,000 50,000 15,000 $120,000 $70,000
20X9 60,000 65,000 30,000 140,000 70,000
Required:
Compute consolidated comprehensive income for 20X8 and 20X9.
20X8 20X9
Consolidated comprehensive income
Answer:
20X8 = 162,000
20X9 = $197,000
Explanation:
The calculation of the consolidated comprehensive income for the year 2008 and 2009 is shown below:
Consolidated comprehensive income
Particulars 20X8 20X9
Purple Corporation
Operating Income $120,000 $140,000
Add: Net Income
from Socks Corporation $40,000 $60,000
Less: Amortization of differential
($80,000 ÷ 10 Years) ($8,000) (8,000)
Consolidated net income $152,000 $192,000
Add: Comprehensive income
reported by Socks Corporation $10,000 $5,000
Consolidated
comprehensive income $162,000 $197,000
Baseball Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $19,100. Budgeted cash receipts total $188,500 and budgeted cash disbursements total $190,200. The desired ending cash balance is $31,100. To attain its desired ending cash balance for January, the company should borro
Answer: $13,700
Explanation:
From the question, we are informed that Baseball Corporation is preparing its cash budget for January. The budgeted beginning cash balance is $19,100. Budgeted cash receipts total $188,500 and budgeted cash disbursements total $190,200. The desired ending cash balance is $31,100.
To attain its desired ending cash balance for January, the company should borrow $13,700.
The solution has been attached.
Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 37,600 machine-hours. The estimated variable manufacturing overhead was $4.38 per machine-hour and the estimated total fixed manufacturing overhead was $1,026,856. The predetermined overhead rate for the recently completed year was closest to:
Answer:
Predetermined OH rate = $ 31.69 per machine hour
Explanation:
Predetermined Fixed OH rate = Estimated Fixed Overhead / Estimated machine hours = $1,026,856 / 37,600
Predetermined Fixed OH rate = $27.31 per machine hour
Predetermined OH rate = Predetermined Fixed OH rate + Predetermined variable OH rate = $ 27.31 + $ 4.38
Predetermined OH rate = $ 31.69 per machine hour
The marketing staff wants to supply pens with attached USB drives to clients. In the past this client has been victimized by social engineering attacks that led to a loss of sensitive data. The security administrator instructs the marketing staff not to supply the USB pens due to which of the following?
A. The cost associated with distributing a large volume of the USB pens
B. The security costs associated with securing the USB drives over time
C. The security risks associated with combining USB drives and cell phones on a network
D. The risks associated with the large capacity of USB drives and their concealable nature
Answer: C. The security risks associated with combining USB drives and cell phones on a network
D. The risks associated with the large capacity of USB drives and their concealable nature
Explanation:
Based on the scenario that has been discussed in the question, the security administrator will instructs the marketing staff not to supply the USB pens based on the security risks that are associated with combining USB drives and cell phones on a network.
Another reason is due to the risks that are associated with the large capacity of USB drives and their concealable nature.
Since the client has been victimized by social engineering attacks that led to a loss of sensitive data in the past, they'll be extra careful this time around.
On January 1, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months
Answer:
interest expense per coupon payment (every 6 months) = $153,000
Explanation:
In this case, since the bonds were sold at par, the interest expense and the actual cash payments are the same (no premium or discount would be amortized). To calculate the interest payment we just multiply the bonds' face value x annual interest rate x 1/2 (semiannual coupons) = $3,400,000 x 9% x 1/2 = $153,000
Abburi Company's manufacturing overhead is 55% of its total conversion costs. If direct labor is $45,900 and if direct materials are $27,200, the manufacturing overhead is:
Answer:
Manufacturing Overheads = $56100
Explanation:
The conversion cost defined simply is the cost involved in turning the raw material or direct material into the finished products. Conversion cost is calculated by adding the direct labor cost and the manufacturing overhead cost.
Conversion cost = Direct labor + Manufacturing overheads
As we know that the manufacturing overhead is 55% of conversion cost, then the direct labor cost is 45% of conversion cost.
If 45% of conversion cost is $45900, then the total conversion cost will be,
Conversion cost = 45900 * 100/45 = $102000
Manufacturing Overheads = 102000 - 45900 = $56100
How could managers use increased worker flexibility and diligence to increase the competitiveness of their manufacturing sites
Explanation:
In order to increase the flexibility and diligence of workers in order to increase the competitiveness of their manufacturing sites, it is ideal for management to offer working conditions that allow employees greater benefits, such as greater mobility, with a layout that includes the correct flow between people, products and materials.
It is also ideal to implement technologies that reduce the bureaucracy both at work and facilitate communication and carrying out tasks.
Mobility also includes remote work using technology.
These are strategies that help to make work more flexible and, consequently, increase innovation in work and worker motivation.
The correct way in which the flexibility of the workers in an organization can be increased is by adapting to suitable principles of business management as per the size and scale of the business.
This will also help the manager to increase the competitiveness in the market and also beat the need for optimum level of production in the organization.
Principles of Business Management. The principles of business management as given by economist Henry Fayol are a great source for how the business can be run efficiently and effectively using the resources available.There can be chain level management that can be followed to achieve specialization of work and bring in additional capital or workforce to divide the work uniformly. Manufacturing can also be increased by doing departmentalization in management to save up costs and achieve optimum utilization of resources.Hence, a manager may adapt to different principles of management to increase competitiveness and effectiveness in the level of manufacturing.
Learn more about Principles of Management here :
https://brainly.com/question/14493167
Cooley Company's stock has a beta of 1.40, the risk-free rate is 25%, and the market risk premium is 5.50%. What is the firm's required rate of return
Answer: 12.2%
Explanation:
Given the variables available, the required rate of return can be computed using the Capital Asset Pricing Model with the formula;
Required Return = Risk-free rate + beta ( Market risk premium)
Required return = 4.25% + 1.4 * 5.5%
Required return = 4.25% + 7.7%
Required return = 12.2%
Note; The actual question says the Risk-free rate is 4.25%.
On April 2 a corporation purchased for cash 7,000 shares of its own $11 par common stock at $26 per share. It sold 4,000 of the treasury shares at $29 per share on June 10. The remaining 3000 shares were sold on November 10 for $22 per share. a. Journalize the entries to record the purchase (treasury stock is recorded at cost). Apr. 2 b. Journalize the entries to record the sale of the stock. If an amount box does not require an entry, leave it blank. Jun. 10 Nov. 10
Answer:
A.
Dr Treasury stock 182,000
Cr Cash 182,000
B.
Jun 10
Dr Cash 116,000
Cr Treasury stock 104,000
Cr Paid in capital from treasury stock 12,000
Nov 10
Dr Cash 66,000
Dr Paid in capital from treasury stock 12,000
Cr Treasury stock 78,000
Explanation:
a. Preparation of the Journal entry to record the purchase
Dr Treasury stock 182,000
Cr Cash 182,000
(7,000*26)
b. Preparation of the Journal entries to record the sale of the stock
Jun 10
Dr Cash (4000*29) 116,000
Cr Treasury stock (4000*26) 104,000
Cr Paid in capital from treasury stock 12,000(116,000-104,000)
Nov 10
Dr Cash (3000*22) 66,000
Dr Paid in capital from treasury stock 12,000
Cr Treasury stock (3000*26) 78,000
Suppose you deposit your paycheck, drawn on another bank. The total money supply in the banking system will ___________ because:
a. Assets of your bank would increase by more than the amount withdrawn from the other bank.
b. An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount.
c. Assets of the other bank would decrease by a fraction of the amount deposited at your bank.
Answer:
Option B, An increase in the assets of your bank by the amount of your paycheck would simply decrease the assets of another bank by the same amount, is correct.
Explanation:
The total money supply in the banking system will remain the “same” because it is given that paycheck is drawn from another bank. So, if a person withdraws money from another bank it implies that there is a decrease in money supply in the banking system and when the cheque is deposited in the other bank so again the money supply will increase in the banking system. However, the amount of money supply will remain the same. Therefore, option B is the right answer.
a. Equipment with a book value of $79500 and an original cost of $169000 was sold at a loss of $33000.
b. Paid $106000 cash for a new truck.
c. Sold land costing $310000 for $420000 cash yielding a gainof $11000.
d. Long term investments in stock were sold for $95600 cash yielding a gain of $17000.
Required:
Use the above information to determine this company's cash flows from investing activities.
Answer:
Cash flow from Investing activities refers to cash transactions related to Fixed Assets as well as transactions related to the ownership of other company securities.
Cash-flow from Investing Activities
Sale of equipment (79,500 - 33,000).......................... $46,500
Purchase of New Truck ................................................... ($106,000)
Sale of Land.........................................................................$420,000
Sale of Long-term investments.......................................$95,600
Net cash provided by investing activities ...................$456,100
Lok Co. reports net sales of $5,856,480 for 2016 and $8,679,690 for 2017. End-of-year balances for total assets are 2015, $1,686,000; 2016, $1,800,000; and 2017, $1,982,000. (a) Compute Lok's total asset turnover for 2016 and 2017.
Answer:
2016 = $3.36
2017 = $4.59
Explanation:
The solution of total assets turnover is shown below:-
Particulars 2016 2017
Total assets in the beginning $1,686,000 $1,800,000
Total assets at the end $1,800,000 $1,982,000
Average assets $1,743,000 $1,891,000
(Assets in the beginning + Assets at end) ÷ 2
Sales revenue $5,856,480 $8,679,690
Total assets turnover $3.36 $4.59
(Sales revenue ÷ Average Total assets)
The following data relate to factory overhead cost for the production of 10,000 computers:
Actual: Variable factory overhead $262,000
Fixed factory overhead 90,000
Standard: 14,000 hrs. at $25 350,000
If productive capacity of 100% was 15,000 hours and the total factory overhead cost budgeted at the level of 14,000 standard hours was $356,000, determine the variable factory overhead controllable variance, fixed factory overhead volume variance, and total factory overhead cost variance. The fixed factory overhead rate was $6.00 per hour.
Answer:
1.-4,000 Favorable
2.6,000 Unfavorable
3.$2,000 Unfavorable
Explanation:
1.Preparation to determine variable factory overhead Controllable variance
Using this formula
Variable factory overhead Controllable variance=Standard hours * rate- Fixed factory overhead rate
Let plug in the formula
Variable factory overhead Controllable variance=14,000 * 25.00- 6.00= 266,000
Variable factory overhead Controllable variance = 262,000- 266,000
Variable factory overhead Controllable variance= -4,000 Favorable
2. Preparation to determine fixed factory overhead volume variance .
First step is to deduct Productive capacity hours from total factory overhead cost standard hours
15,000 hours -14,000 hours =1,000 hrs
Second step is to find the fixed factory overhead volume variance
Using this formula
Fixed factory overhead volume variance=Un-used Numbers of hrs*Fixed factory overhead rate
Let plug in the formula
Fixed factory overhead volume variance=1,000 hrs*$6.00
Fixed factory overhead volume variance= 6,000 Unfavorable
3. Preparation to Determine total factory overhead cost variance
Variable Factory Overhead Controllable Variance $4,000 Favorable
Fixed Factory Overhead Volume Variance $6,000 Unfavorable
Factory Overhead Cost Variance$2,000 Unfavorable
Break-even point Currently, the unit selling price of a product is $160, the unit variable cost is $120, and the total fixed costs are $725,000. A proposal is being evaluated to increase the unit selling price to $170.
A. Compute the current break-even sales (units).
B. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.
Answer:
A. 18,125 units
B. 14,500 units
Explanation:
Break -even is the level of activity where a firm neither makes a profit nor a loss.
Break-even sales (units) = Fixed Cost ÷ Contribution per unit
= $725,000 ÷ ( $160 - $120)
= 18,125 units
New Break-even sales (units) = Fixed Cost ÷ Contribution per unit
= $725,000 ÷ ( $170- $120)
= 14,500 units
"An economy is based on three sectorsdashagriculture, manufacturing, and services. For each unit of output, agriculture requires inputs of 0.20 unit from agriculture, 0.40 unit from manufacturing, and 0.20 unit from services. For each unit of output, manufacturing requires inputs of 0.30 unit from agriculture, 0.20 unit from manufacturing, and 0.20 unit from services. For each unit of output, services requires 0.20 unit from agriculture, 0.30 unit from manufacturing, and 0.30 unit from services. Determine the production levels needed to satisfy a final demand of 0 units for agriculture, 40 units for manufacturing, and 0 units for services. The production level needed from the agricultural sector is 40.00 units."
Answer:
Required Production to fullfil a Demand for 40 industry units
Agriculture 54.4
Industry 83.2
Services 51.2
Explanation:
Input Agricuilture Industrial Service
Agriculture 0.2 0.3 0.2
Industrial 0.4 0.2 0.3
Service 0.2 0.2 0.3
We require X input to generate a demand of 0 agriculture 40 industry and 0 services
The previous matrix will be the input we solve for the output
Output Agricuilture Industrial Service
Agriculture 0.8 -0.7 -0.8
Industrial -0.6 0.8 -0.7
Service -0.8 -0.8 0.7
We now reverse the matrix using excel:
Output Agricuilture Industrial Service
Agriculture 2 1.36 0.96
Industrial 1 2.08 0.88
Service 1 1.28 2.08
Now we multiply this by our desired outcome of
0
40
0
Agriculture 54.4
Industry 83.2
Services 51.2
In terms of the global value system, when Kodak shifted manufacturing to China, what position did China then take in the system, relative to the U.S.
Answer: b. Upstream
Explanation:
The Upstream part of a company's value chain is the part closest to the suppliers and the raw materials they supply to the firm while the downstream relates to how the goods are distributed and sold after produced.
As such, the firm's manufacturing plants are closer to its Upstream value chain portion. When Kodak therefore shifted manufacturing to China, it made China more upstream than the United States as China now dealt more with Kodak suppliers and inputs than the US, who were now more downstream as the consumers.
he Clark Company fails to record these two adjusting journal entries: Depreciation on Equipment: $10 Cash Dividends declared: $40 Working capital will be:
Answer:
Working Capital will be overstated by the amount of $40.
Explanation:
Of the two the adjusting entries, we need to identify the adjusting entry that affects any element of Working Capital (Current Assets or Current Liability).
Depreciation Entries include : Debit Depreciation Expense (Expense) $10 and Credit Accumulated Depreciation $10.
Cash Dividends Declared Entries include : Debit Dividend (Equity) $40 and Credit Shareholders for Dividends (Liability) $40.
Thus, the Liabilities will be understated due to omission of Cash Dividends Declared Entries.
Subsequently, Working Capital will be overstated by the amount of $40.
James just received an $8,000 inheritance check from the estate of his deceased rich uncle. James wants to set aside enough money to pay for a trip in five years. If the trip is expected to cost $5,000, how much of the $8,000 must James deposit now if the rate of return is 12% per year in order to have the $5,000 in five years
Answer:
$2831.13
Explanation:
The computation of the present value of 5,000 in five years is shown below:-
Present Value of 5,000 in five years = Expected cost ÷ (1 + Rate of return)^Number of years
= $5,000 ÷ (1 + 12%)^5
= $
5,000 ÷ (1.12)^5
= $2831.13
Therefore for computing the present value of 5,000 in five years we simply applied the above formula.
Take It All Away has a cost of equity of 10.81 percent, a pretax cost of debt of 5.45 percent, and a tax rate of 35 percent. The company's capital structure consists of 77 percent debt on a book value basis, but debt is 37 percent of the company's value on a market value basis. What is the company's WACC
Answer:
8.12%
Explanation:
The computation of the weighted average cost of capital is shown below:
= Cost of equity × weight of equity + pretax cost of debt × (1 - tax rate) × weight of debt
= 10.81% × 0.63 + 5.45% × (1 - 0.35) × 0.37
= 6.81% + 1.31%
= 8.12%
We simply applied the above formula by considerin the capital structure with its weight so that the correct percentage could come
Jack and Jill need to save $6100 toward a new car. How long will it take them if they save $200 a month earning interest at 4.7% per year
Answer:
2 years 5 months.
Explanation:
Use the Time Value of Money techniques to find n (period it takes to save for required amount)
Using a financial calculator enter the following data
Fv = $6,100
Pmt = - $ 200 × 12 = - $2,400
P/y = 1
r = 4.7 %
Pv = 0
n = 2.4569
Thus it takes 2 years 5 months to save $6100 toward a new car under the given circumstances.
O'NeillO'Neill's Products manufactures a single product. Cost, sales, and production information for the company and its single product is as follows:
Selling price per unit is $54
Variable manufacturing costs per unit manufactured includes direct materials DM, direct labor DL, and variable MOH $27.
Variable operating expenses per unit sold $4
Fixed manufacturing overhead (MOH) in total for the year $120,000
Fixed operating expenses in total for the year $92,000
Units manufactured and sold for the year 12,000 units
Required:
a. Prepare an income statement for the upcoming year using variable costing.
b. Prepare an income statement for the upcoming year using absorption costing.
Answer:
Instructions are below.
Explanation:
The absorption costing method includes all costs related to production, both fixed and variable. The unit product cost is calculated using direct material, direct labor, and total unitary manufacturing overhead.
The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).
Absorption costing income statement:
Sales= 12,000*54= 648,000
COGS= (12,000*27) + 120,000= (444,000)
Gross profit= 204,000
Total operating expenses= (12,000*4) + 92,000= (140,000)
Net operating income= 64,000
Variable costing income statement:
Sales= 648,000
Total variable cost= 12,000*(27 + 4)= (372,000)
Total contribution margin= 276,000
Fixed manufacturing overhead= (120,000)
Fixed operating expenses= (92,000)
Net operating income= 64,000
If people lost confidence in the government what kind of money would have the least value?
If people lost confidence in the government which would have the least value?
a) fiat money
b) representative money
c) commodity money
d) gold standard
Answer:
Fiat money
Explanation:
Fiat money is a type of money or currency that is used as money because it is issued and backed by the government but it does not have any intrinsic value.
It has no intrinsic value which means that it does not have any value of its own and it is maintained by the government. Therefore, If people lost confidence in the government the kind of money that would have the least value is fiat money
Mr. White contracts with his wife Ms. White to watch their kids, Joe and Jimmy, one night for $50. What is the status of the contract between Mr. White and Ms. White?
Answer:
There is no any form of contract between Mr. Smith and Ms. White
Explanation:
Based on the information given there is no contract between Mr. Smith and Ms. White reason been that Ms. White gave inadequate consideration .
Based on this inadequate consideration is not void because it can tend to make a contract between two parties unenforceable because of lack procedure defect when bargaining between two parties .
you have just deposited $11000 in to an account that promises to pay you an annual interest rate of 6.5 percent each year for the next 6 years. You will leave the money invested in the account and 10 years from today. you need to have $26300 in the account. What annual interest rate must you earn over the last 4 years to accomplish this goal
Answer:
Over the last 4 years to accomplish this goal the annual interest rate must be 13.14 %.
Explanation:
First find the Future value (FV) of $11,000 at the end of the 6th year as follows :
PV = -$11,000
r = 6.50%
p/yr = 1
n = 6
Pmt = $0
FV = ?
Using a financial calculator, the Future Value (FV) is $16,050.57
Therefore, the amount invested will amount to $16,050.57 in 6 year.
Next we then calculate the interest rate that will give us $26300 in the next four years (remainder of the 10 years)
PV = -$16,050.57
FV = $26,300
P/yr = 1
n = 4
Pmt = $0
r = ?
Using a financial calculator, the Interest rate (r) is 13.14 %
Conclusion :
Over the last 4 years to accomplish this goal the annual interest rate must be 13.14 %.
Following are selected transactions for Vitalo Company.
Nov. 1 Accepted a $16,000, 180-day, 5% note from Kelly White in granting a time extension on her past-due account receivable.
Dec. 31 Adjusted the year-end accounts for the accrued interest earned on the White note.
Apr. 30 White honored her note when presented for payment.
Calculate the interest amounts at December 31st and April 30th and use those calculated values to prepare your journal entries.
Answer and Explanation:
The Computation of interest amount is shown below:-
Particulars Total through Through maturity Through maturity
Maturity Nov. 1 Jan 1
Principal $16,000 $16,000 $16,000
Rate 5% 5% 5%
Time 180 ÷ 360 60 ÷ 360 120 ÷ 360
Total interest $400 $133 $267
2. The Journal entries are shown below:-
a. Notes receivable Dr, $16,000
To accounts receivable $16,000
(Being issuance of notes is recorded)
b. Interest receivable Dr, $133
To Interest revenue $133
(Being interest revenue is recorded)
c. Cash Dr, $16,400
To Notes receivable $16,000
To Interest revenue $267
To Interest receivable $133
(Being cash received is recorded)
At the beginning of year 1, Looby Corp. purchases equipment for $100,000. The equipment has a residual value of $20,000 and an expected useful life of 10 years. What is accumulated depreciation at the end of year 2 using straight-line depreciation
Answer:
Accumulated Depreciation at the end of year = $16,000
Explanation:
Under the straight line method of depreciation, the cost of an asset less the salvage value is spread equally over the expected useful life.
An equal amount is charged as annual depreciation over the life of the asset. The annual depreciation is calculated as follows:
Annual depreciation:
= (cost of assets - salvage value)/ Estimated useful life
Cost - 100,000
Residual value = 20,000
Estimated useful life = 10 years
Annual depreciation = (100,000- 20,000)/10 =8,000
Annual depreciation = 8,000
Accumulated Depreciation for 2 years = Annual depreciation× number of years
= 8,000× 2 = 16,000
Accumulated Depreciation for 2 years = $16,000