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julsineya [31]
3 years ago
8

Terra Corporation purchased equipment with a 10-year useful life and zero residual value for $100,000. At the end of the fourth

year, the equipment is exchanged for new equipment worth $110,000. Terra gets a trade-in allowance of $70,000 on the exchange, with the remaining $40,000 paid in cash. Which of the following is true of the net effect of this transaction? Assume the straight-line depreciation method is used.Select all that apply:Assets decrease by $10,000Assets increase by $10,000Liabilities increase by $10,000Total stockholders' equity decreases by $10,000Total stockholders' equity increases by $10,000
Business
1 answer:
vazorg [7]3 years ago
3 0

Answer:

Assets increase by $10,000

Total stockholders' equity increases by $10,000

Explanation:

Since in the question, it is given that, the purchase value of equipment is $100,000 and the exchanged value is $110,000

So, the difference of $10,000 ($110,000 - $100,000) would reflect that the assets would increase by $10,000 and the total stockholders' equity is also increased by $10,000

The exchange value is a combination of $70,000 in trade allowance and $40,000 was paid in cash

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goblinko [34]
Answer:
$586.27/mo

Explanation:
Factor doesn’t compound like interest does, 8.78 factor of $65,000 comes out to be $5,707 over the 30 years is $15.85/mo. The loan $65,000, 10% interest rate, 30 years comes out to a monthly payment of $570.42.
$570.42+$15.85= $586.27/mo.

8 0
3 years ago
Weber Company purchases $50,000 of raw materials on account, and it incurs $60,000 of factory labor costs. Supporting records sh
lys-0071 [83]

Answer:

WIP assembly 56,000 debit

WIP Finishing 40,000 debit

Factory Overhead 96,000 credit

Explanation:

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<u>Finishing</u>

26000

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7 0
3 years ago
As a new firm in the apple-picking business, you have considered adding an economist to your management team. with what would th
TiliK225 [7]
<span>This economist would advise me on the trends in the apple-picking business. Where to invest, where to sell my products and services, etc. Which equipments to buy, which market to watch and any other thing that may influence one way or the other the direction of the company.</span>
4 0
3 years ago
In preparing its cash flow statement for the year ended December 31, 2021, Rorschach Co. gathered the following data: Gain on sa
Snowcat [4.5K]

Answer:

($340,000)

Explanation:

The computation of the net cash outflows from investing activities is shown below:

Cash flows from investing activities:  

Cash from proceeds of sale of land $20,00

Purchase of Bond investments ($360,000)

Net Cash Outflows from investing activities ($340,000)

The positive sign shows the inflow of cash and the negative sign shows the outflow of cash and the same is considered in the above computation part

6 0
3 years ago
A given investment project will cost RM400,000. Incremental annual cash flows after taxes are expected to be RM80,000 per year f
erastova [34]

Answer:

Based on the profitability index method, the investment should not be accepted.

It does not produce enough cash flows to justify the investment.

Explanation:

The profitability index method measures the present value of benefits for by dividing the present value of benefits by the present of initial investments.

The present value of initial investment in this project remains RM400,000.  The present value of incremental annual cash flows of RM80,000 after taxes for 5 years will be equal to:

RM80,000 * 3.668 = RM293,440

Then the next step is to divide the present value of benefits by the initial investment as follows:

RM293,440/RM400,000 = 0.7336 = 73.36%

The implication is that the present value of the benefits is less than the initial investment costs.  The project should then be rejected.

6 0
3 years ago
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