Answer:
Cash accounting method
Explanation:
The cash accounting method records receipts and expenses during the period in which cash changes hands. In this method, revenue will be recorded when payment from a customer is received. Expenses are not recorded unless money is paid out. In short, revenues and expenses are recognized and recorded only when cash is received or paid.
Cash accounting contrasts with the accrual accounting system, which recognizes revenues and expenses when their respective events occur.
Answer:
Common Stock $10,000 and Paid-in Capital in Excess of Par Value $2,000
Explanation:
The journal entry to record the issuance of common stock is presented below:
Cash A/c Dr $12,000 (1,000 shares × $12)
To Common Stock $10,000 ($1,000-× $10)
To Additional Paid-in Capital in excess of par - Common Stock $2,000
(Being the issuance of stock is reported and the remaining balance i.e $2,000 is credited to the additional paid-in capital account)
While issuing the stock, we debited the cash account as there is a cash inflow and credited the common stock and additional paid-in capital account as the share is issued which affect the stockholder equity
Answer:
$114,193.55
Explanation:
The calculation of value of the firm is shown below:-
Value of the firm = (((EBIT × (1 - Tax)) ÷ Cost of capital) + (Debt × Tax)
=((($17,100 × (1 - 21%)) ÷ 12.4%) + ($25,000 × 21%)
= ((($17,100 × (0.79)) ÷ 12.4%) + ($25,000 × 21%)
= ($13,509 ÷ 12.4%) + ($25,000 × 21%)
= $108,943.55 + $5,250
= $114,193.55
So, for computing the value of the firm we simply applied the above formula.