Question
The construction of solar houses by a construction company has increased its business volume. Therefore, she is considering the acquisition of a loader costing $
The construction of solar houses by a construction company has increased its business volume. Therefore, she is considering the acquisition of a loader costing $ 54,000. The company estimates that the purchase of the machine will result in additional revenue and operating costs (non-compromised CCA) which are included in the statement of operations table in the table below. The salvage value of the loader is estimated to reach $ 8,000 in year 6. The company's tax rate is 35%. Finally, the company plans to finance the purchase of the machine with debt and will pay 10% interest per year. Annual payments are $ 31,114. Complete the statement of operations and the statement of cash flows.
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | ||
| Status of the results | |||||||||
| Recipes | 66,000 | 70,000 | 74,000 | 80,000 | 64,000 | 50,000 | |||
| Charges | |||||||||
| Operation and maintenance | 29,000 | 28,400 | 32,000 | 38,800 | 31,000 | 25,000 | |||
| DPA | |||||||||
| Machine | 10,800 | 17,280 | 10,368 | 6,221 | 5,320 | 3,110 | |||
| Interest on debt | |||||||||
| Taxable profit | |||||||||
| Tax (35%) | |||||||||
| Net profit | |||||||||
| Cash flow | |||||||||
| Operating activities | |||||||||
| Net profit | |||||||||
| DPA | |||||||||
| Investing activities | |||||||||
| Machines | |||||||||
| Tax effect of the disposition | |||||||||
| Machines | |||||||||
| Fundraising activities | |||||||||
| Principal repayment | |||||||||
| Net cash flow |
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Financial & Managerial Accounting For Undergraduates
Authors: Jason Wallace, James Nelson, Karen Christensen, Theodore Hobson, Scott L. Matthews
2nd Edition
161853310X, 9781618533104
