Answer: A cash sale
Explanation: In simple words, liquidity refers to the ability of an organisation to bear its short term expenses. For that a company must have cash or some assets that can be readily converted into cash in case of need.
Hence Sally should sell her company in cash sale as it will result in inflow of cash which will create liquidity and also the consideration will be certain with short timely payments.
Other option such as IPO or stock for stock might result in increase in value but certainly won't give her liquidity.
Answer:
A and B
Explanation:
A) income statement
insurance expense-understand net income-overstated
B) balance sheet
prepaid insurance -overstated stockholders equity -overstated
Answer:
$2,000
Explanation:
The computation of the amount pay to the tax authorities during the year is shown below;
Let us assume the accrued payment be $6,000
Let us assume the amount pay to the tax authorities be X
Beginning Taxes payable account balance + Accrued payment - X = Ending taxes payable account balance
$3,000 + $6,000 - X = $7,000
$9,000 - X = $7,000
So, the X is
= $9,000 - $7,000
= $2,000
hence, the amount pay to the tax authorities is $2,000
Answer:
a. Michael's personal assets are not recorded on the company's balance sheet:
Explanation:
the question in incomplete, so I looked it up:
Michael McNamee is the proprietor of a property management company, Apartment Exchange, near the campus of Penscola State College. The business has cash of $8,000 and furniture that cost $9,000 and has a market value of $13,000. The business debts include accounts payable of $6,000. Michael's personal home is valued at $400,000, and his personal bank account has a balance of $1,200. Identify the principle or assumption that best matches the situation:
In accounting, the economic entity principle states that a company's financial records are separate and distinct from the financial records of its owners. Even though Michael is the owner of company, his personal assets should not be included in the company's financial statements.
