ADM 2342 : Capstone C7 with answers.doc
9 Jul 2014
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Document Summary
Patti"s pirate adventures is a company that specializes in extravagant birthday parties and special events on the water in a three-masted sailing vessel. They have 1 ship already, but they are looking at buying two new boats that have a more authentic look than the one they currently have. The original boat was purchased for ,000 and has a current net book balue of ,000. It was anticipated that it would last 20 years and has been amortized ,000 per year. The two new ships will cost ,000 each and patti is planning to upgrade one of the ships with some extra features for ,000. Patti will need to pay 13% hst on the purchase. A bank loan of ,000 will be used along with cash and the trade-in of the original boat for the purchase. Formulas: (cost residual value) / useful life = amortization per year. Cost accumulated amortization = net book value (nbv)
