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Elden [556K]
3 years ago
11

On November 1, Year 1 Cove Company borrowed $7,000 cash from Shelter Company. The one-year note carried a 7% rate of interest.

Business
1 answer:
PSYCHO15rus [73]3 years ago
5 0

Answer:

Assets + 7,000

Liabilities +7,000

Net income no effect

Cash flow statement:

+7,000 from financing activities

Explanation:

The loan will not generate no expense as the note has not accrued interest yet.

Then, cash from financing activities will increase by 7,000 as the firm received cash

Finally, the blaance sheet will disclosure the increasein assets (cash) and the increasein liabilities (note payable)

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McCoy’s Fish House purchases a tract of land and an existing building for $910,000. The company plans to remove the old building
Nina [5.8K]

Answer: $972,900

Explanation:

The cost of land consists of the actual purchase price, and all other expenses that are necessary to make the asset ready for its intended use. In terms of land, all these expenditures can include title fees, unpaid taxes from previous years only (i.e. not current taxes), and other expenses need to physically prepare the land for use. The current taxes figure of $4,600 is not included here, as it is only owed during the current year, therefore normal accounting rules for taxes will apply. This figure will thus be treated as a liability until it is paid. The back taxes were aqcuired when the asset was aqcuired, and thus form part of the cost.

Old buildings that were on the land, may need to be teared down so that land can be utilised. The costs used to demolish the building also forms part of the purchase price. On top of that, to fully prepare the land for use the land may need to be landscaped and leveled. All these costs contribute towards getting the land ready for use, and are thus included in the cost. Sales made on any item related to the land, during the process when the land was still being processed for its intended use, will reduce the cost of the asset, and deduct this figure. This figure will fall under sales, which is an income to the business. The full calculation of the cost is as follows:

Purchase price: $910,000

Title insurance: + $2,400

Unpaid property taxes: + $8,300

Cost of removing building: + $45,900

Sale of salvaged materials: - $4,000

Level the land: + $10,300

Cost of land: = $972,900

3 0
3 years ago
9. An arrangement that maintains the power of attorney in the event that the principal becomes
Lelu [443]

<u>Answer: </u>agent or attorney is a power of attorney.

<u>Explanation:</u>

Power of attorney is an agreement between two people one is the principle and the other person is the agent or the attorney where they sign the document. According to the law the agent who is power of attorney has the authority to do the banking transactions on behalf of the principle.

If the power of attorney is revoked then the agent has no obligations to perform any tasks. power of attorney document for incapacitated or mentally affected principle should have stated in the document itself such power of attorney is called as durable power of attorney.

8 0
3 years ago
Why is it very important to properly present the results of your analysis in a report
jek_recluse [69]

Answer:

To get a good grade.

4 0
2 years ago
On January 1, 2005, Jambon purchased equipment for use in developing a new product. Jambon uses the straight-line depreciation m
notsponge [240]

Answer:

A. The total cost of the equipment.

Explanation:

Even if Jambon has not used the equipment in 2005 because it can only be used for the product that is to be developed in five years, Jambon still had to pay for the full cost of the equipment.

Because the equipment is laying idle, it is not depreciating. Therefore, the expense that Jambon is not incurring, is the depreciation expense associated with this equipment. This depreciation expense will only be seen in five years, when the product it was bought for is finally completed.

8 0
3 years ago
Murray Motor Company wants you to calculate its cost of common stock. During the next 12 months, the company expects to pay divi
frozen [14]

Answer:

Cost of retained earnings  = 0.13

Explanation:

given data

(D1) = $1.80

current price = $36  

growth rate = 9 percent

solution

we get here Cost of retained earnings  (Ke) that is express as

Cost of retained earnings = ( D1 ÷ P ) + g    ................1

here P is price and g is growth rate

put here value and we get

Cost of retained earnings =  (1.80 ÷ 36 ) + 0.08

Cost of retained earnings  = 0.13

4 0
3 years ago
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