priarm8799

12.04.2021 • 

Business

Gem Co. determined that, due to obsolescence, equipment with an original cost of $900,000 and accumulated depreciation at January 1, Year 2, of $420,000 had suffered an impairment loss. The sum of the undiscounted cash flows expected to result from the use and disposition of this long-lived asset is less than its carrying amount, and its fair value at that date was $300,000. In addition, the remaining useful life of the equipment was reduced from 8 years to 3. Assuming that the straight-line method is used in its December 31, Year 2, balance sheet, what amount should Gem report as accumulated depreciation

Ответ:

GabriellaDul

29.10.2021

Business

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A. According to the company's accounting system, what is the net operating income earned by product V86O?

net loss ($5,000)

B. What would be the effect on the company's overall net operating income if product V86O were dropped?

the company's net operating income would decrease by $40,000

Explanation:

net operating income from product V860:

total sales $150,000

- variable expenses $72,000

- fixed manufacturing expenses $50,000

- fixed selling and administrative expenses $33,000

net loss ($5,000)

if product is dropped:

unavoidable fixed costs = ($50,000 + $33,000) - ($30,000 + $13,000) = $40,000

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