Answer:
C. The company will recognize $5000 of revenue in year 1 and $5000 of cash flow from operation in year 2
Explanation:
As, the company is using accrual based accounting, that means that if the services are rendered the company needs to record the revenue regardless of the company is getting cash or not. So, in year 1 the company provided $5000 of services. The company will record $5000 of revenue in its income statement in year 1. But the thing is, company is not getting cash in year 1. Guadalupe is getting cash in year 2. company record the inflow and outflow of cash in cash flow statement when there is actually the cash transaction involved.
Cash inflow in year 2. so, $5000 of cash flow from operation in year 2.
Market growth It is all about the circular flow diagram. Firms produce more because there are more people willing to buy goods and they are free to do so, not a government to stop them. In addition prices are stable because of competition and there is a lot of variety for the consumer.
Not very, most of the time CO’s are underpaid so they can have mass amounts of them.
Answer:
The total amount of paid-in capital in excess of par is: $5,000.
Explanation:
When Common Stocks are classified as par value Stocks, any price paid in excess of the par value of the Stock is accounted for in the Share Premium account.
<u>Here is the Summary of the Transaction provided.</u>
Common Stocks : 260 shares × $100 = $26,000
Paid-in capital in excess of par : $31,000 - $26,000 = $5,000
