Gains and losses on disposal, Cost Accounting

Assignment Help:

When assets are replaced during the anticipated life of the project, or at the end of the anticipated life of the project, they are sold at their pre-determined scrap values. Income Tax Rate (Including Capital Gains Tax)

Income tax is applied as a single rate throughout the life of the project. (note that for assignment any profit(loss) of sale of assets is taxed in the same manner as ordinary income and not according to the Australian Capital Gains Tax provisions) As the parent corporation has sufficient profits to absorb any losses that may be incurred by the project from year to year there will be no losses to be carried forward and offset against future profits (ordinary or otherwise).  As the corporation takes immediate advantage of any tax savings that may be incurred, in the event that the annual net profit(loss) of the project results in a tax saving to the corporation, an amount equivalent to the tax saving is paid into the project account at year end.  The company DOES NOT use tax-effect accounting techniques.

Calculations for  PAYG deductions (for the company or staff) are not required. The Impact of the Gst For the purposes of this model you should ignore any GST implications.

Project Valuation Method

At the end of each year the project is valued at the Present Value of the annual operating profit (before income tax and interest) of that year, as if it were received each year for the next 5 years.

Net Present Value Rate

The required rate of return and/or discount rate used in Net Present Value Calculations is determined from time to time by the corporations financial advisers. (For the sake of simplicity assume that all the factors (including inflation) that are required to be considered in determining the NPV/Discount rate are reflected in the abovementioned rate).

Inflation Rate

The average annual inflation rate is calculated over the life of the project.


Related Discussions:- Gains and losses on disposal

Evaluate the income statement for the year, DF is describing its consolidat...

DF is describing its consolidated financial declaration for the year ended 31 December 2009. DF has a numerous investments in other entities. Some of these investments are provided

Choice of budget flexing basis, Choice of Budget Flexing Basis The mo...

Choice of Budget Flexing Basis The most suitable flexing basis must be considered where it assists in the comparison of alternative budget data at the planning stage and for

Calculate- total variable cost and average variable cost, The firm currentl...

The firm currently uses 50,000 workers to produce 200,000 units of output per day. The daily wage per worker is $80, and the price of the firm’s output is $25. The cost of other va

Absorbtion of overheads, interaction with an expert/cost accountant to kno...

interaction with an expert/cost accountant to know the overhead absorbtion policies and procedure followed

Calculate the predetermined overhead rate, Bubba's Crawfish Processing Comp...

Bubba's Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year, overhead is estimated at $1,150,000, and direct labor

Evaluate the overhead allocation rate, Vintage Auto Company manufactures pa...

Vintage Auto Company manufactures parts to order for antique cars. Vintage Auto makes everything from fenders to engine blocks. Each customer order is treated as a job. Vintage Aut

Cost accounting, raw an organization chart of any actual or hypothetical ma...

raw an organization chart of any actual or hypothetical manufacturing organization to show the position of management/cost accounting department within an organization and discuss

Prepare an amortization table, On January 1, 2012 Morgan's Motors issued $5...

On January 1, 2012 Morgan's Motors issued $500,000 of 3-year, 8% bonds when the market yield was 6%. The bond agreement stated that compounding was semi-annual with payments due on

Calculate the cost of job - manufacturing overhead, Cube Manufacturing bega...

Cube Manufacturing began two jobs during May 200X. The company had no beginning inventory. The following information is available:

Sanford charge to expense during 2013, In January, 2008, Sanford Corporatio...

In January, 2008, Sanford Corporation purchased a patent for a new product for $1,200,000. The patent was valid for fifteen years but it was estimated to have a useful life of ten

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd