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tatiyna
3 years ago
11

Lisa Smith decided to start her CPA practice as a professional corporation, Smith CPA, PC. The corporation purchased an office b

uilding for $35,000. The real estate agent said the building was worth $50,000 in the current market. The corporation recorded the building as a $50,000 asset because Lisa believes that is the real value of the building. What concepts or principles of accounting is being violated?
Business
1 answer:
Nadya [2.5K]3 years ago
7 0

Answer:

The answer is: Cost principle

Explanation:

The cost principle states that a business should record its assets, liabilities, and equity investments at their original purchase costs.

In this case, Lisa paid $35,000 for the office building, so the recorded price of the asset should be $35,000 and not $50,000.

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Explain the importance of office for an organization long answer
Flura [38]

Answer:

The answer to this question is given below in this explanation section.

Explanation:

                  " importance of office for an organization"

An office is the center point of organization.It is a place to perform different activities of a business organization.The office is the brain of the whole organization.The office performs a critical function such as information collection,collection,recording analyzing distribution of information and executive function such as planning,organization,policies formulation,decision making etc.

It is used by management for the purpose of planning,organizing,staffing,directing,and controlling.Office not only keep record of information  but also pay the role of reliable channel of communication the information.It is required for smooth functioning of the organization.

Proper organisation facilities the intensive use of human capital.Organization stimulates creativity.By providing well defined areas of work and ensuring delegation of authority,Organization provides sufficient freedom to the managers and encourages their initiative,independent thinking and creativity.

6 0
3 years ago
Over a four-year period, LaKeisha Thompson purchased shares in the Oakmark I Fund. Using the following information, answer the q
ArbitrLikvidat [17]

Answer:

LaKeisha Thompson

a. At the end of four years, the total amount invested is:

= $6,000

b. At the end of four years, the total number of shares purchased is:

= 166.81

c. At the end of four years, the average cost for each share is:

= $35.97.

Explanation:

a) Data and Calculations:

Investments in Oakmark I Fund:

Year            Investment        Price      Number

                      Amount     per share    of share

Feb 2008        $1,500           $40        37.50

Feb 2009          1,500             30        50

Feb 2010           1,500             34        43.60

Feb 2011            1,500             42        35.71

Total               $6,000                        166.81

Average cost per share = $35.97 ($6,000/166.81)

7 0
3 years ago
When you go into the red on your budget, it means you have?
Gnoma [55]

I think the answer is C. :)

6 0
4 years ago
On January​ 2, 2019, Konrad Corporation acquired equipment for $ 800,000. The estimated life of the equipment is 5 years or 31,0
fredd [130]

Answer: $250,000

Explanation:

Depreciation expense using the unit of production method:

[(Actual cost - Salvage value) / total estimated productive capacity] × actual productive capacity

$800,000 - $25000 / 31,000 = 25

25 × 10,000 = $250,000

7 0
3 years ago
Investment X offers to pay you $4,200 per year for eight years, whereas Investment Y offers to pay you $6,100 per year for five
Sloan [31]

Answer:

  • <em>The cash flow stream from investment X has higher present value than the the cash flow stream from investm Y.</em>

Explanation:

<u></u>

<u>1. Present value of investment X</u>

  • Annual payment: C = $4,200
  • Number of years: t = 8
  • Rate: r = 5%
  • PV₁ = ?

Formula:

           PV=C\times [\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}]

Substitute and compute:

        PV_1=\$ 4,200\times [\dfrac{1}{0.05}-\dfrac{1}{0.05(1+0.05)^8}]

        PV_1=\$ 27,145.49

<u>2. Present value of investment Y</u>

  • Annual payment: C = $6,100
  • Number of years: t = 5
  • Rate: r = 5%

Formula:

           PV=C\times [\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}]

Substitute and compute:

        PV_2=\$ 6,200\times [\dfrac{1}{0.05}-\dfrac{1}{0.05(1+0.05)^5}]

        PV_2=\$ 26,409.81

Hence, the cash flow stream from investment X has higher present value than the the cash flow stream from investm Y.

4 0
3 years ago
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