When does the high low method lead to a negative amount?

Waterways Tours uses the units-of-activity method in depreciating its tour boats. One boat was purchased on January 1, 2006, at a cost of $148,000. Over its four-year useful life, the boat is expected to be driven 100,000 miles. Salvage value is expected to be $8,000.

Instructions

(a) Compute the depreciation cost per unit.

(b) Prepare a depreciation schedule assuming actual mileage was: 2008, 26,000: 2009, 32,000: 2010, 25,00; and 2011, 17,000.

Review the rights and responsibilities of Certified Management Accountants:

http://www.imanet.org/PDFs/Public/CMA/RIghts_Responsibility_CMA.pdf

What are some of the ethical responsibilities and obligations that management accountants have within an organization? Provide some examples. Are these responsibilities different than the obligations for financial accountants?

Acquisition Costs of Trucks Shabbona Corporation operates a retail computer store. To improve delivery services to customers, the company purchases four new trucks on April 1, 2010. The terms of acquisition for each truck are described below.
1. Truck #1 has a list price of $15,000 and is acquired for a cash payment of $13,900.
2. Truck #2 has a list price of $20,000 and is acquired for a down payment of $2,000 cash and a zero-interest-bearing note with a face amount of $18,000. The note is due April 1, 2011. Shabbona would normally have to pay interest at a rate of 10% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.
3. Truck #3 has a list price of $16,000. It is acquired in exchange for a computer system that Shabbona carries in inventory. The computer system cost $12,000 and is normally sold by Shabbona for $15,200. Shabbona uses a perpetual inventory system.
4. Truck #4 has a list price of $14,000. It is acquired in exchange for 1,000 shares of common stock in Shabbona Corporation. The stock has a par value per share of $10 and a market value of $13 per share. Prepare the appropriate journal entries for the foregoing transactions for Shabbona Corporation. (Round computations to the nearest dollar)

Balance Sheet of Diamond Ltd. as on 31.3.2011:

Liabilities:

Rs

 Share capital:  

 

 20,000 shares of Rs.10 each  

 2,00,000  

 General reserve  

40,000

 Profit and loss account  

32,000

 Sundry creditors  

 1,28,000  

 Income-tax reserve  

60,000

 

 4,60,000  

Assets:

Rs

 Land and buildings  

 1,10,000  

 Plant and machinery  

 1,30,000  

 Patents and trade marks  

20,000

 Stock  

48,000

 Debtors  

88,000

 Bank balance  

52,000

 Preliminary expenses  

12,000

 

 4,60,000  

The expert valuer valued the land and buildings at Rs.2,40,000; goodwill at Rs.1,60,000; and plant and machinery at Rs.1,20,000. Out of the total debtors, it is found that debtors of Rs.8,000 are bad. The profits of the company have been as follows:

 

Rs

31.3.2009

92,000

31.3.2010

88,000

31.3.2011

96,000

The company follows the practice of transferring 25% of profits to general reserve. Similar type of companies earn at 10% of the value of their shares. Ascertain the value of shares of the company under:

(i) intrinsic value method;

(ii) yield value method; and

(iii) fair value method.