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3 years ago

Expenditure by business on capital goods is known as what

1 answer:

7 0

Answer:

Investment Spending or Capital Expenditure.

Explanation:

Capital Expenditure or Investment Spending mainly deals with business expenditure on capital goods or factor/inputs of production which are used in the production process.

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Cushenberry Corporation had the following transactions. 1. Sold land (cost $12,000) for $15,000. 2. Issued common stock at par f

Eduardwww [97]

Answer:

Entries are given

Explanation:

We will record assets and expenses on the debit as they increase during the year and will record liabilities and capital on the credit side as they increase during the year or vice versa.

Sold land (cost $12,000) for $15,000.

Dr Cash 15,000

Cr Land 12,000

Cr Gain on Sale 3,000

Increase investing cash flows by 15,000. and 3000 gain will be deducted from operating activities

Issued common stock

Dr Cash 20,000

Cr Common Stock 20,000

Increase financing cash flows by 20,000

Recorded depreciation on buildings for $17,000.

Dr Depreciation Expense 17,000

Cr Accumulated Depreciation 17,000

This will not affect cash flow.

Paid salaries of $9,000.

Dr Salaries Expense 9,000

Cr Cash 9,000

Decrease operating activities cash flow by $9,000.

Issued 1,000 shares of $1 par value common stock for equipment

Dr Equipment 8,000

Cr Additional paid-in capital Common Stock 7,000

Cr Common Stock 1,000

It doesn't involve any cash however affects the company financial position so it will be recorded in schedule of non cash financing and investing activities

Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.

Dr Cash 1,200

Dr Accumulated Depreciation 7,000

Dr Loss on Disposal 1,800

Cr Equipment 10,000

There would be an increased cash flow of $1,200 under investing activities.

3 0

3 years ago

Selected sales and operating data for three divisions of different structural engineering firms aregiven as follows: Division A

FinnZ [79.3K]

Answer and Explanation:

The computation is shown below:

Return on investment = Margin × Turnover

Now

= (Net operating income ÷Sales) × (Sales ÷ Average operating assets)

Division A = ($414,000 ÷ $6,900,000) × ($6,900,000 ÷ $1,725,000)

= 6% × 4

= 24.00%

Division B = ($1,090,000 ÷ $10,900,000) × ($10,900,000 ÷ $5,450,000)

= 10% × 2

= 20.00%

Division C = ($325,000 ÷ $10,000,000) × ($10,000,000 ÷ $2,500,000)

= 3.25 × 4

= 13.00%

Residual Income = Net operating income - (Minimum required rate of return × Average operating assets)

Division A = $414,000 - (19% × $1,725,000)

= $414,000 - $327,750

= $86,250

Division B = $1,090,000 - (20% × $5,450,000)

= $1,090,000 - $1,090,000

= $0

Division C = $325,000 - (16% × $2,500,000)

= $325,000 - $400,000

= ($75,000)

3 0

3 years ago

Double D Ranch and Esau enter into a contract on August 1 for the sale of 200 cattle. Esau cancels the contract ten days later.

ycow [4]

Answer:

Keep the cattle and recover the contract price from Esau

Explanation:

Since in the question it is given that the Double D Ranch and Esau enter into a contract on August 1 for selling of 200 cattle.

But Esau cancels the contract after 10 days. Now the Double D Ranch is not able to sell the cattle to the another buyer so in this case , the Double D Ranch should keep the cattle and get back the price of the contract from the another party i.e Esau as he cancels the contract

3 0

3 years ago

The following errors took place in journalizing and posting transactions:

yuradex [85]

Answer:

<u>Journal 1</u>

Debit : Prepaid Expense $37,600

Credit : Cash $18,800

Credit : Insurance Expense $18,800

<u>Journal 2</u>

Debit : Dividends $18,000

Credit : Wages $18,000

Explanation:

Journal 1

The first error has to be corrected by debiting the Prepaid Expenses by twice the amount paid to cancel the effect of a credit entry made to that account. Cash is credited to show the correct credit entry that was supposed to be made. Insurance expense is credited to cancel the debit entry made to this account in error.

Journal 2

The error made is called error of principle. This is were the transaction is recorded in the wrong class of accounts. Simply, Debit the Dividends and credit the Wages Account to record and reverse the error out of the Wages Account into the Dividends Account.

6 0

3 years ago

The principle of diminishing returns to capital states that if the amount of labor and other inputs employed is held constant, t

Arturiano [62]

Answer:

B) the less an additional unit of capital adds to production

Explanation:

The diminishing return state that if everything else is held constant, each additional unit will increase production by a fewer amount than previous one. That's because the same amount of resource can only use efficiently a certain amount of capital then there is a loss in this good use and therefore, the output do not increase at the same rate as we add up capital.

A person can do a good use of several type of tool for building a house but I can only use one or two at the time

Adding more tools can increase productivity but in the end there is only one person working.

4 0

3 years ago