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noname [10]
3 years ago
11

A. The owner invested $16,200 cash in the company in exchange for its common stock.

Business
1 answer:
Anon25 [30]3 years ago
7 0

Answer:

a. Assets increase by $16,200; and Shareholders' equity increases by $16,200.

b. Assets increase by $800; and Assets decrease by $800.

c. Assets increase by $10,600; and Shareholders' equity increases by $10,600.

d. Assets increase by $260; and Liabilities increases by $260.

e. Assets increase by $9,600; and Assets decrease by $9,600.

Explanation:

The accounting equation that is impacted is given as follows:

Assets = Shareholders' equity + Liabilities

The impact of each transaction on individual items of the accounting equation are as follows:

a. The owner invested $16,200 cash in the company in exchange for its common stock.

Cash is an asset item, current asset to be specific; while common stock is one of the components of Shareholders' equity. The investment of $16,200 by the owner will therefore increase assets and Shareholders' equity.

Therefore, Assets increase by $16,200; and Shareholders' equity increases by $16,200.

b. The company purchased supplies for $800 cash.

Cash and supplies are both assets item, current assets to be specific. The purchase of supplies will increase the inventory of supplies which is an asset item by $800, while it will reduce cash which is another asset item also by $800.

Therefore, Assets increase by $800; and Assets decrease by $800.

c. The owner invested $10,600 of equipment in the company in exchange for more common stock.

Equipment is an assets item, fixed assets to be specific; while common stock is one of the components of Shareholders' equity. The investment of $10,600 worth of equipment by the owner will therefore increase assets and Shareholders' equity each by $10,600.

Therefore, Assets increase by $10,600; and Shareholders' equity increases by $10,600.

d. The company purchased $260 of additional supplies on credit.

Supplies is an assets item, current assets to be specific; while purchase on credit is a liability item, current liability which is an account payable to creditor of supplies. The purchase of supplies will increase supplies which is an assets item by $260, and it will also increasethe account payables to creditor of supplies.

Therefore, Assets increase by $260; and Liabilities increases by $260.

e. The company purchased land for $9,600 cash.

Cash and land are both assets item, current assets to be specific. The purchase of land will increase the inventory of land which is a fixed asset item by $9,600, while it will reduce cash which is another asset (current asset) item also by $9,600.

Therefore, Assets increase by $9,600; and Assets decrease by $9,600.

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Williams Company purchased a machine costing $28,300 and is depreciating it over a 10-year estimated useful life with a residual
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Answer:

$3,160

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset .

Given that Williams Company purchased a machine costing $28,300 and is depreciating it over a 10-year estimated useful life with a residual value of $3,300,

Annual depreciation

= ($28,300 - $3,300)/10

= $2,500

At the beginning of the eighth year, a major overhaul on it was completed at a cost of $8,300,

Net book value at the beginning of the eighth year (before overhauling)

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Capitalizing the overhaul cost,

Net book value at the beginning of the eighth year (after overhauling)

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= $19,100

Given that the total estimated useful life was changed to 12 years with the residual value unchanged,

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= $15,800/5

= $3,160

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3 years ago
An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be ear
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Answer:

Cost-volume-profit analysis.

Explanation:

An important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is cost-volume-profit analysis. It is an important tool in accounting that is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating financial statements, both income and net income. It is also an accounting concept known as the break even analysis.

In order to use this cost-volume-profit analysis, accountants usually make some assumptions and these are;

1. Sales price per unit product is kept constant.

2. Variable costs per unit product are kept constant.

3. Total fixed costs of production are kept constant.

4. All the units produced are sold.

5. The costs accrued are as a result of change in business activities.

6. A company selling more than a product should simply sell in the same mix.

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In the confirmation of accounts receivable, the auditor will most likely
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Answer:

A. Request confirmation of a sample of the inactive account.

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In the confirmation of accounts receivable, the auditor would most likely Request confirmation of a sample of the inactive accounts .

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Kidzo Inc., a toy car company, has several groups in its manufacturing unit dedicated to do different tasks. For example, it has
MissTica

Process departmentalization

Explanation:

Departmentalization

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