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lorasvet [3.4K]
4 years ago
7

The following expenditures relating to plant assets were made by Watkens Company during the first 2 months of 2014.Paid $7,000 o

f accrued taxes at the time the plant site was acquired.Paid $200 insurance to cover a possible accident loss on new factory machinery while the machinery was in transit.Paid $850 sales taxes on a new delivery truck.Paid $21,000 for parking lots and driveways on the new plant site.Paid $250 to have the company name and slogan painted on the new delivery truck.Paid $8,000 for installation of new factory machinery.Paid $900 for a 1-year accident insurance policy on the new delivery truck.Paid $75 motor vehicle license fee on the new truck.Instructions:Explain the application of the historical cost principle in determining the acquisition cost of plant assets.List the numbers of the transactions, and opposite each indicate the account title to which each expenditure should be debited.
Business
1 answer:
Zina [86]4 years ago
8 0

Answer:

(a) The following points explain the application of the cost principle to plant assets.

1.Under the cost principle, the acquisition cost for a plant asset includes all expenditures necessary to acquire the asset and make it ready for its intended use.

2.Cost is measured by the cash paid in a cash transaction or by the cash equivalent price paid when non cash assets are used in payment.

3.The cash equivalent price is equal to the fair market value of the asset given up or the fair market value of the asset received, whichever is more clearly determinable.

(b) Following is the list of transactions and items to be debited.

1. Land

2. Factory Machine

3. Delivery Truck

4. Land Improvements

5. Delivery Truck

6. Factory Machine

7. Prepaid Insurance

8. License Expense

Explanation:

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5 0
3 years ago
in the imc communication process, the ________blank is the person who reads, hears, or sees and processes the message being comm
Bingel [31]

In the IMC communication process, the receiver is the person who reads, hears, or sees and processes the message being communicated.

<h3>What is the IMC planning process?</h3>

In the IMC communication process, the receiver is the person who reads, hears, or sees and processes the message being communicated. In order to make a brand's messaging consistent across all of the media that it utilizes to reach its target audience, a method known as integrated marketing communications (IMC) is used.

IMC is a tactical technique that serves as a strategic framework for all marketing channels' communication. IMC offers a business an advantage over rivals and increases sales. When a company communicates with its customers, it develops a relationship with them and provides a frictionless purchasing experience, which eventually results in a foundation of devoted, lifelong customers.

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7 0
2 years ago
Determine if the following statements better describe optimization in levels or optimization in differences.
Leni [432]

Answer:

A:  Optimization in differences

B: Optimization in levels

C: Optimization in differences

D: Optimization in levels

Explanation:

Optimization in levels <em>Vs.</em> Optimization in differences

Optimization in levels is a method of selecting different alternatives on the basis of calculating net benefits( net benefits = benefits - costs) a person realizes from those alternatives.

Optimization in differences, on the other hand, is a method of selecting different alternatives on the basis of calculating change in levels of costs and change in levels of benefits to derive net change in benefits.

How to choose?

<u>Optimization in levels</u>: (net benefit)  look at total benefit – total cost

<u>Optimization in differences</u>: look at the change in the net benefit of one option compared to another

3 0
3 years ago
social media company needs money to expand, so it decides to issue stock. the first-time sale of the company's stock directly to
S_A_V [24]

When a social media firm needs funds to expand, it decides to sell stock. An initial public offering is the first time a company's shares are sold directly to the public (IPO). Hence, the correct answer is IPO.

<h3>What is an initial public offering?</h3>

An initial public offering (IPO) or stock launch is a public sale in which a company's shares are offered to institutional and, in most cases, individual investors. One or more investment banks often underwrite an IPO, as well as arrange for the shares to be listed on one or more stock exchanges. A privately owned corporation becomes a public company through this procedure, referred to colloquially as floating or going public. Initial public offerings (IPOs) can be used to raise additional equity capital for firms, to monetize the assets of private shareholders such as company founders or private equity investors, and to make current holdings or future capital raising easier to trade by becoming publicly traded.

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4 0
1 year ago
Mullineaux Corporation has a target capital structure of 70 percent common stock and 30 percent debt. Its cost of equity is 16 p
alexira [117]

Answer:

The company WACC is 13.30%

Explanation:

For computing the WACC, first we have to find the weight-age of both debt and equity.

Since in the question, the weightage of debt and equity is given which is equals to

Debt = 30%

And, Equity or common stock = 70%

So, we can easily compute the WACC. The formula is shown below

= Weighted of debt × cost of debt × (1- tax rate) + Weighted of equity × cost of equity

= 0.30 × 0.10 × (1 - 0.30) + 0.70 × 0.16

= 0.021 + 0.112

= 13.30%

Hence, the company WACC is 13.30%

6 0
3 years ago
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