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2 years ago

If a company uses $1,300 of its cash to purchase supplies, the effect on the accounting equation would be:

Business

1 answer:

Over [174]2 years ago

7 0

Answer:

no impact

Explanation:

The journal entry to purchase the supplies for cash

Supplies Dr $ 1,300

To Cash A/c $ 1,300

(Being the purchase of supplies is recorded)

For recording this we debited the supplies as it increased the assets and credited the cash as it decreased the assets

Therefore there is no impact on the accounting equation

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Blue Spruce Corp. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivab

dedylja [7]

Answer:

The adjusting journal entry would be:

Debit: Bad debts expense $5,317

Credit: Allowance for Doubtful Accounts $5,317

Explanation:

Debit: Bad debts expense $5,317

Credit: Allowance for Doubtful Accounts $5,317

Explanation of the entry:

Allowance for doubtful debts at the end of the year = $402,000 × 2% = $8,040

Credit balance at the start = $2,723

Allowance for doubtful accounts = $8,040 - $2,723 = $5,317

The Allowance for Doubtful Accounts presently has a credit balance of $2,723 and allowance for doubtful debt at the end of year is $8,040, you need to enter an additional credit amount of $5,317 into the Allowance for Doubtful Accounts. The other part of this adjusting entry will be a debit of $5,317 to Bad Debts Expense.

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2 years ago

Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans? open‑market sale fractional banking re

balu736 [363]

Answer:

Which term refers to the interest the Federal Reserve Bank (Fed) charges banks for loans?

discount rate

the discount rate is the interest rate that the Federal Reserve System charges banks for the loans it makes. The overnight rate or the federal funds rate is even lower, but it lasts a few hours only.

Select the charge the Fed levies on banks borrowing funds that would result in the smallest increase in the money supply.

two percentage points above the private level

the higher the interest rate, the lower the increase in the money supply.

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2 years ago

The market value of the equity of Hudgins, Inc., is $645,000. The balance sheet shows $53,000 in cash and $215,000 in debt, whil

allsm [11]

Answer:

It is 3.25 times

Explanation:

EBITDA Multiple = Enterprise Value/ EBITDA

Where EBITDA = EBIT+Depreciation & Amortization

= $91,000+$157,000

=$248,000

Enterprise Value (EV) = Market value of the equity +Debt-Cash and Cash Equivalent

EV= $645,000+$215,000-$53,000

=$807,000

Hence, EBITDA Multiple = $807,000/$248,000

=3.25 times

EBITDA Multiple is used to compares a company’s Enterprise Value to its annual EBITDA.

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2 years ago

Read 2 more answers

The following is the ending balances of accounts at December 31, 2018 for the Valley Pump Corporation Account Title Cash Account

Art [367]

Answer and Explanation:

The preparation of the classified balance sheet is presented below:

Valley Pump Corporation

Balance sheet

December 31, 2018

Assets

Current assets

Cash $30,000

Marketable securities $27,000

Account receivable $61,000

Inventory $91,000

Prepaid expense $37,000

Investments

Marketable securities $27,000

Land $25,000 $52,000

Property, plant & equipment

Land $105,000

Buildings $325,000

Equipment $85,000

Less:

Accumulated depreciation -$135,000

Net property, plant & equipment $380,000

Intangibles

Total assets $695,000

Liabilities & shareholder equity

Current liabilities

Account payable $70,000

Interest payable $15,000

Unearned revenue $25,000

Note payable $110,000

Current maturities $55,000

Total current liabilities $275,000

Long term liabilities

Note payable $110,000

Shareholder equity

Common stock $250,000

Retained earnings $60,000

Total shareholder equity $310,000

Total liabilities & shareholder equity $695,000

Working notes

Accumulated depreciation = building + equipment

= $105,000 + $60,000

= $695,000

The note payable is

= $55,000 × 2

= $110,000

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2 years ago

What is the meaning of Constitution

Ainat [17]

Answer:

A Constitution is a formal document that sets out the rules governing a company. It also defines the relationship between the company, shareholders, director and other officers of the company. ... This is an important legal document that has to be taken into consideration when registering a new company.

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2 years ago