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 Year 1 $ Year 2 $ method 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, S75 par and Year 1 $25,000 Year 2 $88,000 Year 3 $95,500 Year 2 Year 3 Year 1 Cum. Preferred: Common:

Explanation / Answer

Ans of Problem 3

Explanation:

Double-declining balance method

Constant rate = 2/20 years = 10%

Year 1 = 75000 x 10% x 3/12 = $1875

Year 2 = (75000-1875) x 10% =73125 x10 % = $7312.5

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