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