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Q1: HP Electronics Ltd company specializes in the manufacturing of office computers,
Laptops and printers. Company recently received a large order from Bank Muscat of
80 computers and 50 printers. In addition, the Bank Muscat asked HP Electronics to
install software into each of the computers.
The cost per computer is 450 (OMR) and the cost per printer is 150 (OMR). The cost
of installing the software to run on all the computers is 4,000 (OMR).
a) If HP Electronics wants to make a 15% profit for the order, what would be the
total selling price HP needs to charge?
b) Do you agree with software installation cost to be considered in the total cost?
Discuss with reason
a) If profit is 15% of the order, selling price = Total cost * 1.15
Selling price = (80*450 + 50*150 + 4000) *1.15
Selling price = 54625
b) I agree that the installation cost should be considered in the total cost, because not only
license of the software should be bought. Also, if the software was for free, it would be
required labor time which has a cost.

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Q2: Al Tasnim Cement Company purchased a new machine for their operational
expansion valued at OMR 59,000 on January 1, 2015. The machine has an estimated
useful life of six years. The equipment is estimated to have a salvage value of OMR
9,000. Assuming the WDV method of depreciation,
a) What is the amount of depreciation expense that needs to be recorded at the end
of the 2019 year?
b) Is there any change in the value of depreciation at the end of 1
st
year and 4
th
year? Discuss with reasons.
a) The WVD method of depreciation formula is:
Rate of depreciation = 1 (S/C)^(1/n)
Where
S: Salvage Value
C: Cost of the Value
n: Years
After 5 years
Rate of depreciation = 1 - (9000/59000)^(1/5)
Rate of depreciation = 31.34%
Amount of depreciation = 31.34% * 59000 = 18.490
b) Yes, there is a change in the value depreciation. The WVD method charges more
depreciation at the first years and less in the following years (because it calculates the
depreciation over the book value).

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Q1: HP Electronics Ltd company specializes in the manufacturing of office computers, Laptops and printers. Company recently received a large order from Bank Muscat of 80 computers and 50 printers. In addition, the Bank Muscat asked HP Electronics to install software into each of the computers. The cost per computer is 450 (OMR) and the cost per printer is 150 (OMR). The cost of installing the software to run on all the computers is 4,000 (OMR). a) If HP Electronics wants to make a 15% profit for the order, what would be the total selling price HP needs to charge? b) Do you agree with software installation cost to be considered in the total cost? Discuss with reason a) If profit is 15% of the order, selling price = Total cost * 1.15 Selling price = (80*450 + 50*150 + 4000) *1.15 Selling price = 54625 b) I agree that the installation cost should be considered in the total cost, because not only license of the software should be bought. Also, if the software was for free, it would be required labor time which has a cost. Q2: Al Tasnim Cement Company purchased a new machine for their operational expansion valued at OMR 59,000 on January 1, 2015. The machine has an estimated useful life of six years. The equipment is estimated to have a salvage value of OMR 9,000. Assuming the WDV method of depreciation, a) What is the amount of depreciation expense that needs to be recorded at the end of the 2019 year? b) Is there any change in the value of depreciation at the end of 1st year ...
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