oblem 3 The pertinent information about a piece of construction equipment follow

Question

oblem 3 The pertinent information about a piece of construction equipment follows: Cost Estimated Useful Life Residual (Salvage) Value Placed in service $75,000 20 Years $10,000 7/1/2015 Compute the first two years depreciation using the Double-Declining Balance method Year 1 $ Year 2 $ 200,000 shares of $10 par common stock. The following amounts were distributed as dividends- Dividends Determine the dividends per share for both preferred and common stock for each year. Problem 4 National Furniture Company has 25,000 shares of cumulative preferred 2% stock. S7S par and Year 1 $25,000 Year 2 $88,000 Year 3 $95,500 Year 1 Year 2 Year 3 Cum. Preferred: Common:

Explanation / Answer

(a) Cost 75000 Residual Value -20000 Balance 55000 Estimated Useful Life (Yrs) 20 Dep. Per Year 2750 Year 1 1375 Year 2 5500 (b) 2% Preference Stock 25000 75 1875000 Common Stock 200000 10 2000000 225000 3875000 Dividends Yr 1 Yr 2 Yr 3 Cum. Preferred 5000 5000 5000 Common 20000 83000 90500

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