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Lelechka [254]
3 years ago
9

If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: Multiple Choice Asset

s increase $4,500 and liabilities decrease $4,500. One asset increases $4,500 and another asset decreases $4,500. Equity decreases $4,500 and liabilities increase $4,500. Equity increases $4,500 and liabilities decrease $4,500. Assets increase $4,500 and liabilities increase $4,500.
Business
1 answer:
Firdavs [7]3 years ago
8 0

Answer: Assets increase $4,500 and liabilities increase $4,500.

Explanation:

An asset are the properties which a business or an organization owns. An asset possess an economic value.

Since the equipment purchased is an asset, this will lead to an increase of assets by $4500 and since it was bought on credit and hasn't been paid for, liabilities will also increase by $4500.

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On January 1, 2017, Accounts Receivable and Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000
kupik [55]

Answer:

(C) $745

Explanation:

The computation is given below:

For computing the bad debt  expense, first we have to determine the ending account receivable balance which is shown below:

Ending account receivable balance = Beginning account receivable + credit sales - collections - written off amount

= $20,000 + $70,000 - $74,700 - $400

= $15,300

So, the bad debt expense is

= Ending account receivable × given percentage

= $15,300 × 5%

= $745

8 0
3 years ago
The owner of a bicycle repair shop forecasts revenues of $188,000 a year. Variable costs will be $57,000, and rental costs for t
Umnica [9.8K]

Answer:

Revenues=$188,000

Less: Variable Costs=$57,000

Less: Rentals=$37,000

Earnings before depreciation and tax=$94,000

Less: Depreciation =$17,000

Earnings before tax=$77,000

Less: Tax40%=$30,800

Net Income=$46,200

a) Dollars in minus dollars out

Dollars in = Revenues = $188,000

Dollars out = Variable cost + Rentals + Tax = $57,000 + $37,000 + $30,800 = $124,800

Operating cash flow = $188,000 - $124,800 = $63,200

b) Adjusted accounting profits

Operating cash flow = Net income + Depreciation = $46,200 + $17,000 = $63,200

c) Add back depreciation tax shield

Operating cash flow = Earnings before depreciation and tax x (1 - tax rate) + Depreciation tax shield

or, Operating cash flow = $94,000 x (1 - 0.40) + $17,000 x 40% = $63,200

Yes, all the results are same.

7 0
3 years ago
Weighted Average Cost Method with Perpetual Inventory The beginning inventory for Dunne Co. and data on purchases and sales for
muminat

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

Download xlsx
4 0
3 years ago
Rokhanna, Inc. issued $1,000 par value bonds with an 8% coupon. The bonds have 18 years to maturity. Market interest rates are 5
Zielflug [23.3K]

Answer:

Bond Price = $1294.65063 rounded off to $1294.65

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. Assuming the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,

Coupon Payment (C) = 1000 * 0.08 = 80

Total periods (n) = 18

r or YTM = 0.054 or 5.4%

The formula to calculate the price of the bonds today is attached.

Bond Price = 80 * [( 1 - (1+0.054)^-18) / 0.054]  + 1000 / (1+0.054)^18

Bond Price = $1294.65063 rounded off to $1294.65

8 0
2 years ago
If a financial analyst divides a company's cost of goods sold for year 2 by its cost of goods sold for year 1, he/she is perform
Sedbober [7]

If a financial analyst divides a company's cost of goods sold for year 2 by its cost of goods sold for year 1, he/she exists performing percentage analysis approach for horizontal analysis.

<h3>What is cost of goods sold?</h3>

The total sum that your company spent on expenses directly associated with the selling of goods is known as the cost of goods sold. Depending on the nature of your firm, this could also include raw materials, packaging, direct labor involved in making or selling the product, and items bought for resale.

Costs of Goods Sold (COGS) are the expenses incurred over a specific time period to produce your goods. COGS is calculated as initial inventory plus purchases minus ending inventory. An income statement's cost of goods sold (COGS) column lists the costs incurred by a business to produce, procure, and deliver a commodity or service to the final consumer.

The direct charge, cost, or expense related to producing goods and services that are sold to consumers at retail is known as the cost of goods sold. Overhead costs like rent, security fees, communication fees, etc. are not included in COGS.

Hence,  If a financial analyst divides a company's cost of goods sold for year 2 by its cost of goods sold for year 1, he/she exists performing percentage analysis approach for horizontal analysis.

To learn more about cost of goods sold refer to:

brainly.com/question/24561653

#SPJ4

8 0
1 year ago
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