PLEASE I NEED URGENTLY TO EXPLAIN THE ANSWERS FOR THE FOLLOWING :
20. In November, a company finalized its budget for the upcoming calendar year. In December, the decision was made to acquire new equipment in January by trading in old equipment and financing the amount due by a loan with principal and interest due at the end of three years. Out-of-pocket costs to operate the machinery would not change. This decision would change which of the company's budgeted financial statements for the upcoming year?
a. The budgeted balance sheet only.
b. Both the budgeted balance sheet and the income statement.
c. The budgeted balance sheet, the income statement, and the statement of cash flows.
d. Both the budgeted income statement and the statement of cash flows.
CORRECT ANSWER D ((IF THERE IS A NEW EQUIPMENT IT SHOULD EFFECT THE BALANCE SHEET
21. A project with a 4 year life has a cost of acquisition of $400,000 and installation cost of $100,000. If the effective income tax rate is 40%, what is the cash inflow each period due to depreciation expense?
a. $40,000.
b. $50,000.
c. $60,000.
d. $75,000.
CORRECT ANSWER B
REGARDS
-------------------------------------------
Bahaa Mohammed Alhaj Saleh
Arab Intl Bureau
Amman
Jordan
-------------------------------------------