Day-Care Center ​

question 20

Short Answer

Day-Care Center
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A day-care center using the double-declining-balance method of depreciation purchased equipment costing $36,000 and put it use on June 1. The equipment is expected to have a useful life of 10 years and an estimated resale value of $2,400.
-Refer to the Day-Care Center scenario. Compute the depreciation expense for June 1 through December 31 of the first tax year and all 12 months of the second and third years.

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Definitions:

Special Dividend

A one-time distribution of profits by a company to its shareholders, in addition to any regular dividends.

WACC

The weighted average cost of a company's capital from all sources, including equity and debt, used to evaluate investment possibilities.

Debt Ratio

The debt ratio measures a company's financial leverage by comparing its total liabilities to its total assets, indicating the proportion of a company's assets that are financed through debt.

Dividend

A portion of a company's earnings distributed to shareholders, usually in the form of cash or stock.