Mark's Repair Service Uses the Straight-Line Method of Depreciation

question 144

Essay

Mark's Repair Service uses the straight-line method of depreciation. The company's fiscal year end is December 31. The following transactions and events occurred during the first three years. Instructions
Prepare the necessary entries. (Show computations.)

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Definitions:

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return a company must pay investors to finance its assets, often used as a benchmark to evaluate the profitability of investments.

Present Values

The today's equivalent value of future money or cash flow series, calculated with a defined rate of return.

Cash Inflows

Money received by a business from its activities, e.g., sales of goods, provision of services, loans received.