Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. accounting bradly company purchased muipment in 20

accounting Bradly Company purchased muipment in 2001 for $90,000 and estimated a $6,000 salvage value...

80.2K

Verified Solution

Question

Accounting

accounting

imageimage
Bradly Company purchased muipment in 2001 for $90,000 and estimated a $6,000 salvage value at the end of the equipment's 10-year useful life. At December 31, 200?, there was $58,300 in the accumulated depreciation for this equipment using the straight-line method of depreciation. On March 3 l , 2008, the equipment was sold for $24,000. Prepare the appropriate journal entries to remove the equipment from the books of Bradly Company on March 31, 2008. [5 lull-la] Last year Farley Corp. had sales of $303,225, operating costs of $267,500, and year-end assets of $l95,000. The debt-to-totaI-assets ratio was 22%, the interest rate on the debt was 8.2%, and the nn's tax rate was 32%. The new CFO wants to see how the ROE would have been affected if the rm had used a 45% debt ratio. Assume that sales and total assets would not be aected, and that the interest rate and tax rate would both remain constant. B}; how much would the ROE change in response to the change in the capital structure? & What conclusion can be drawn about the management of ROE from here? [5 Marla]

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students