Answer:
C. Additions and improvements.
Explanation:
Additions and improvements are subsequent expenditures would be capitalized.
Answer:
a.
Cash $1000 Dr
Common stock $1000 Cr
b.
Purchases $500 Dr
Cash $500 Cr
c.
Accounts Receivable $2000 Dr
Sales Revenue $2000 Cr
d.
Cost of Goods Sold $500 Dr
Inventory Account $500 Cr
e.
Cash $2000 Dr
Accounts Receivable $2000 Cr
Explanation:
a.
The cash received as a result of issuing shares is debited as cash is increasing while as the capital is increasing so common stock is credited.
b.
The inventory is purchased for cash so cash is credited and purchases are debited.
c.
The sale of inventory on credit means a debit to the accounts receivable account for the amount of sale and a credit to sales revenue.
d.
When inventory is purchased, we debit the purchases account and credit either cash or accounts payable.
Later on, we transfer the purchases to the inventory amount as it is purchased for the intention of sale. Thus, we credit the purchases account and debit the inventory account.
When a sale is made, we debit the cost of goods sold by the amount of inventory sold and credit the inventory account.
e.
Cash is received so it will be debit and accounts receivable be credited.
Answer:
It will affect the profit after taxes of the company.
Explanation:
A higher ROI means that for the same level of investment, higher levels of return are achieved. In this case, the company's return is the profits after taxes, those that shareholders have the right to claim. Without considering variances in the level of investment, higher levels of profit can be obtained by a more significant difference between revenue and total expenses (including costs, operative expenses and depreciation and interests)
Answer:
The alignment of numbers in the first part of the question is off. However, you solve this question as shown below. The correct answer is C. $1,124.
Explanation:
This is a one-time cashflow type of question where the principal amount is invested once and no other addition is made to the account. You use the future value formula to solve the result of the compounding effect at year 3.
FV formula;
FV = PV(1+r)^n
PV = 800
discount rate; r = 12% or 0.12
total duration of investment; n = 3
therefore; FV = 800(1+0.12)^3
FV = 800 * 1.404928
FV = 1123.94
To the nearest whole dollar, the amount will grow to $1,124
