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lianna [129]
3 years ago
9

If a company receives $12,000 from the stockholders to establish a corporation, the effect on the accounting equation would be:_

_________
A. Assets increase $12,000 and equity increases $12,000.
B. Liabilities increase $12,000 and equity decreases $12,000.
C. Assets increase $12,000 and liabilities increase $12,000.
D. Assets increase $12,000 and liabilities decrease $12,000.
E. Assets decrease $12,000 and equity decreases $12,000.
Business
1 answer:
Darina [25.2K]3 years ago
4 0

Answer:

The correct answer is option A

Explanation:

A receipt of cash indicates an increase in cash which is an asset. When an asset increases, it is represented by a debit to that asset's account and the asset side of the accounting equation is also debited. Thus, a receipt of $12000 cash from stockholders will be represented by a debit or an increase to the asset account for $12000.

The other side of the transaction would be a credit to the equity for $12000 because the stockholders are the owners of the company and any capital invested by the owners in the company is represented by a credit to the equity account as the capital is credited when it increases. Thus, the effect on accounting equation will be an increase in the equity of $12000.

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Dairy Cream Inc. makes and sells ice cream. Dairy Cream wants to merge with EZ Freeze Inc., its main competitor and a maker of i
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Answer:

b. products that have identical attributes, such as frozen yogurt.

Explanation:

A monopoly is formed when a firm or a group of firms have a an unfair advantage in supplying a product and faces no competition while operating.

It is important to identify the market where the monopolist exists.

In the given scenario where Dairy Cream wants to merge with EZ Freeze Inc., its main competitor and a maker of ice cream and other frozen desserts. The merger will eliminate competition and the product market is defined under ice cream and products that have identical attributes, such as frozen yogurt.

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3 years ago
A house in the neighborhood has been well maintained. The seller has made sure that all the electrical systems are working to co
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Answer:

utility power

Explanation:

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The subject unit has been restructured in a way that it satisfied all the needs of the buyer, thus, it brings a lot of utility power to the market in respect of its value.

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3 years ago
When you are saving or investing, the amount of expected return you receive is based on this:
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It is Based on The <u>Risk</u><u> </u><u>Level</u><u>.</u><u> </u>

7 0
2 years ago
Crestfield leases office space. On January 3, the company incurs $23,000 to improve the leased office space. These improvements
Lisa [10]

Answer:

Amortization expense $11,500

   To Accumulated Amortization- Leasehold improvements $11,500

(Being the expenses for the first year is recorded)

Explanation:

The journal entry is as follows

Amortization expense $11,500

   To Accumulated Amortization- Leasehold improvements $11,500

(Being the expenses for the first year is recorded)

The computation is shown below:

= Incurred expenses ÷ remaining life

= $23,000 ÷ 2

= $11,500

While recording this transaction we debited the amortization expense as the expenses account is increased while at the same time the accumulated amortization should be credited as it decreased the value of the asset

5 0
3 years ago
he St. Augustine Corporation originally budgeted for $360,000 of fixed overhead at 100% normal production capacity. Production w
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Answer:

$9000 (unfavorable).

Explanation:

Given: Budgeted fixed overhead= $360000.

          Actual fixed overhead=$ 360000.

          Actual production= 11,700 units.

         The variable overhead rate was $3 per hour.

         The standard hours for production were 5 hours per unit.

The fixed factory overhead volume variance is difference between actual production volume and budgeted production. It help in measuring the effecient use of fixed resources. It is termed as favourable if actual fixed overhead exceed the budgeted amount, however, it is unfavorable if the actual fixed overhead is less than budgeted amount.  

Now, lets calculate the Actual fixed overhead cost.

Actual fixed overhead cost= \textrm{actual fixed overhead}\times \frac{Actual\ production}{Budgeted\ production}

∴ Actual fixed overhead cost= \$ 360000\times \frac{11700}{12000} = \$ 351000.

Actual fixed overhead cost= $351000.

Next calculating the fixed factory overhead volume variance.

The fixed factory overhead volume variance= \textrm{Actual fixed overhead cost}-\textrm{budgeted fixed overhead}

We know, Budgeted fixed overhead= $360000 and Actual fixed overhead cost= $351000

∴ The fixed factory overhead volume variance= \$351000-\$360000= \$ 9000 (unfavorable)

The fixed factory overhead volume variance= $9000 (unfavorable)

6 0
3 years ago
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