Accounting Answers

what is the future value of an annuity if the size of each payment is 2, 500, payable at the end of each quarter for five years at an interest rate of 9%

On 1 January 2020 Power Lid purchased a vehicle for $12 000 cash. It is the policy of the company

to depreciate vehicles at the rate of 20 % per annum under the straight-line method.

On 1 May 2020 the company bought a furniture for $4 000 by cheque. It is estimated that the

furniture will have a useful life of 3 years after which it will have scrap value of $100

a) Calculate depreciation for the vehicle for the year ended 31 December 2020 and 2021.

b) Calculate depreciation for the furniture for the year ended 31 December 2020 and 2021.

1)    How much money would you need to deposit into a bank account today at 6% per year in order to be able not to work and be able to withdraw $7,000 at the end of each year for the following 15 years?    (2 Points)

Xis considering purchasing a new piece of heavy machinery for $18.50 million. The machinery will be depreciated to zero book value over10 years using the straight-line depreciation method but is expectedto have a residual market value (selling price) at the end of the 10 years equal to $0.90 million. During the first year the machinery is expected to increase the company’s revenues by $1.70 million and, in addition, enable the company to save $1.50 million in employee salaries. Both of these numbers are to remain constant for the rest of themachinery’s useful life. The incometax rate is 18%; the company will use 80% equity and 20% debt to finance to investment; the risk-free rate in the country is 2.90%, the company’s beta has been estimated 1.10, and the market risk premium is 4.90% while cost of debt (before tax) is 3.50%.

a)Estimate the project’s cash flows.   (4 Points)

b)Estimate the project’s WACC.   (2 Points)

c)Estimate the project’s NPV.   (1 Point)

d) Estimate the project’s IRR.    (1 Point)

1. Company X wrote a check for 9,500.00 payable to Andrew Reyes and it cleared with the bank for the same amount. The accounting book of the company however shows that the same check issued to Mr. Reyes was recorded as 5,900.00. What is the effect of this entry to the bank or book balance? What will you do to reconcile the book and bank balances?

Beatrice Luigi Gomez established a fashion designing service business in Cebu City on December 2021 which she

named Top 5 Best Designs. Below are the following completed transactions during the first year of business.

Dec. 1 Beatrice transferred cash from a personal account to an account to be used for the business, P243,000.

3 Beatrice invested in the business her personal computer equipment having a fair market value of P34,000.

4 Bought office equipment on account from Robinsons Cybergate, P13,740.

5 Paid rent covering 1 year amounting P70,000. (Use Asset Method)

6 Bought a used service vehicle car for P93,000, paying P45,000 down, with the balance due in thirty days.

9 Received invoice and paid 1-year insurance premium to Cacawa Fidelity company, P25,000. (Use Asse

The following entries have been passed by an accountant. State whether these entries are correct or not. Prepare the correct journal entries.  Date

Cash A/c                                                    Dr.

   To Interest A/c                                                         Cr.

(Being interest paid)

7,000

7,000

Sohan’s A/c                                                Dr.

   To Purchases A/c                                                     Cr.

(Being purchase of goods from Sohan in cash)

10,000

10,000

Hari Om’s A/c                                           Dr.

   To Sales A/c                                                        Cr.

(Being cash sales to Hari Om)

5,000

5,000

Mukesh A/c                                               Dr.

    To Bank A/c                                                          Cr.

(Being salary paid for the month)

10,000

10,000

1. Company X wrote a check for 9,500.00 payable to Andrew Reyes and it cleared with the bank for the same amount. The accounting book of the company however shows that the same check issued to Mr. Reyes was recorded as 5,900.00. What is the effect of this entry to the bank or book balance? What will you do to reconcile the book and bank balances?

1. AJ Imperial is a self-employed professional who offers accounting and business management services. Her total gross receipts amounted to 3,500,000.00 for taxable year 2020. Her recorded cost of service and operating expenses were 1,200,000.00 and 800,000.00 respectively. How will you compute for AJ's tax liability? How much is her gross income, taxable income and graduated income tax due for the year?

1. Dan Tamago is an employee of Itnok Poultry Farm who earns at a minimum. His total compensation income for 2020 amounted to 180,000.00. Tamago contributed 8,100.00 for his SSS, 900.00 for Philhealth and 3,600 for PAG-IBIG. On December 15, he received his 13th month pay at 15,000.00 which is equivalent to his basic monthly salary. How do you classify Mr. Tamago as a taxpayer? How will you compute for his taxable income and how much is the income tax due him?