Question
Problem 13-41 Increasing Residual Income over Time (LO 13-2, 13-4, 13-5) Suncoast Food Centers has provided the following information with regard to the purchase
Problem 13-41 Increasing Residual Income over Time (LO 13-2, 13-4, 13-5) Suncoast Food Centers has provided the following information with regard to the purchase of equipment. Acquisition cost of equipment Useful life $620,000 5 years Salvage value at end of useful life Annual straight line depreciation $124,000 Annual income generated by asset (before deducting depreciation) $186,000 Use a 10 percent rate to compute the Imputed interest charge Required: Complete the following table Based on Gross Book Value Imputed Interest Charge Based on Net Book Value Year Income Before Depreciation Annual Depreciation Income Net of Depreciation Value Average Net Book Imputed Interest Charge Residual income Average Gross Book Value 1 2 3 . 5 Residual Income
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