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Vinvika [58]
3 years ago
12

A company pays $1,900 for supplies previously purchased on account. Indicate the amount of increases and decreases in the accoun

ting equation.
Business
1 answer:
ad-work [718]3 years ago
5 0

Answer:

Assets decreases by $1,900 while liabilities also decreases by $1,900.

Explanation:

Accounting equation shows that the assets of a company is equal to the addition of its liabilities and shareholders' equity. This is stated mathematically as follows:

Assets = Liabilities + Shareholders' equity ................................. (1)

The aim of the accounting equation is to ensure that the balance sheet is always balanced, that is, a change in one of the components of the accounting equation must result in a corresponding change in another component of the accounting equation. This ensures the accounting equation always balance.

in the question, purchasing an item on account means that the item was purchased on credit i.e. without paying for it immediately. This makes the supplier a creditor to the company and creditor is one of the components of liabilities in the accounting equation. The payment of $1,900 to the creditor implies a decrease in the liabilities by $1,900.

In addition, cash is one of the components of assets in the accounting equation stated above. Therefore, the payment of $1,900 by the company to the creditor/supplier reduces assets by $1,900.

Based on this information, the accounting equation (1) above can be restated as follows:

Assets - $1,900  = Liabilities - $1,900 + Shareholders' equity ............ (2)

This shows that assets decreases by $1,900 while liabilities also decreases by $1,900.

To test that the accounting equation always balance, equation (2) can be solved and we will obtain equation (1) back again as follows:

Assets - $1,900 + $1,900 = Liabilities + Shareholders' equity

Since - $1,900 + $1,900 = 0, we have equation (1) back again as follows:

Assets = Liabilities + Shareholders' equity

I wish you the best.

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Companies seeking good PR may host a(n) ________ to communicate new hires, new facilities, or community service projects.
Lynna [10]

Answer:

The correct answer is letter "A": press conference.

Explanation:

Press conferences allow the media to obtain information about different organizations that may be of common interest at the moment. They are also a sign that the company questioned can face the public which enhances the Public Relationships (PR) between that institution and the rest of companies within the industry.

5 0
2 years ago
A company is selling cookies for $3 per bag. The ingredients costs $9.3 and can make 37 bags with the ingredients. How much prof
ad-work [718]

Answer: $2.75 profits per bag

Explanation:

9.3/37 in order to find how much it costs her per bag to make.

This equals approx .25 cents

Then subtract this from $3 in order to get how much profit per bag she makes.

6 0
3 years ago
National Storage issued $90 million of its 10% bonds on April 1, 2018, at 99 plus accrued interest. The bonds are dated January
Ahat [919]

Answer:

The total amount of cash  received is $91,350,000

Explanation:

The amount of cash proceeds realized from the bond issuance is the 99% of face value of $90 million plus the coupon interest due from January 2018(date of the bond) to April 1 ,2018(the date of bond issuance),that is three months of coupon interest payment.

The bond proceeds is computed as below:

Discounted bond price 99%*$90,000,000            =$ 89,100,000

Three months of interest 10%*$90,000,000*3/12   =$2,250,000

Total amount received from bond issue                    $91,350,000

3 0
3 years ago
A 6.75 percent coupon bond with 26 years left to maturity can be called in six years. The call premium is one year of coupon pay
kiruha [24]

Answer:

The yield to call  is 5.07%

Explanation:

The yield to call can be computed using the rate formula in excel,which is given as :=rate(nper,pmt,-pv,fv)

nper is the number of years to call which is 6 years

pmt is the annual interest coupon payable by the bond,which is :6.75%*$1000=$67.5

The pv is the current price at which the bond is offered to investors. i.e $1,135.25

fv is the price at the bond would be called in six years i.e par value+premium

par value is $1000

premium is $67.5

call price is $1067.5

=rate(6,67.5,-1135.25,1067.5)

rate=5.07%

8 0
2 years ago
3. Management activities include all of the following except:
7nadin3 [17]

Answer:

A

Explanation:

Management activities include Decision making

6 0
2 years ago
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