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3 years ago

Choose the correct answer in the following statements about financial and real assets.

Business

1 answer:

lora16 [44]3 years ago

3 0

Answer: Please refer to Explanation

Explanation:

A financial asset is a non-physical asset that that gets it's value from a contract that was signed by the parties involved. Financial assets include Bonds, stocks and even cash amongst others.

Real Assets on the other hand are physical assets that can be seen and hence have an inherent value. Examples include buildings and cars.

a. Toyota creates a real asset- the factory. The loan is a financial asset that is created in the transaction.

The factory becomes a real Asset that is tangible and has an inherent value. The loan was created by an agreement between Toyota and the bank and so is a Financial Asset.

b. When the loan is repaid, the financial asset is destroyed but the real asset continues to exist.

When the loan is repaid, Toyota no longer owns that financial asset because it has gone back to the bank. However, the Real Asset which is the factory that they were able to build will remain with Toyota.

c. The cash is a financial asset that is traded in exchange for a real asset, inventory.

As already mentioned, cash is a financial asset. Inventory is a tangible substance with an inherent value not determined by a contract and so is a Physical Asset. Trading cash for Inventory is therefore trading a financial asset for a physical one.

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ABC Inc. was incorporated two years ago by issuing 5,000 shares of common stock at $400 each and borrowing $240,000 from a bank

trapecia [35]

Answer:

Total Asset = $2,598,200

Explanation:

Accounting equation : Asset = Equity + liabilities

Equity =common stock + retained earnings

= ( 5000*$400) + (40000 - 1800)

= $2,000,000 + 38200

= $2,038,200

Liabilities = $240,000 + 320000

= $560,000

Total Equity and Liabilities = 2038200 + 560000

= $2,598,200

double entry principle helps to ensure that the accounting equation is done e.g when common stock is issued contra entry is bank if cash is received.

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3 years ago

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A company purchased a computer system at a cost of $24,000. The estimated useful life is 6 years, and the estimated residual val

max2010maxim [7]

Answer:

Year 2= $3,333.33

Explanation:

Giving the following information:

A company purchased a computer system for $24,000. The estimated useful life is 6 years, and the estimated residual value is $9,000.

To calculate the depreciation expense for the second year, we need to use the following formula for year 1 and 2:

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1= 2*[(24,000 - 9,000)/6]= 5,000

Year 2= 2*[(15,000 - 5,000)/6]= 3,333.33

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3 years ago

Please select the word from the list that best fits the definition

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What's the List? Of words ofc?

Explanation: It may be "Wage Gap" Though.

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One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing

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Answer:

The key economic idea being exemplified is c) People are rational

Explanation:

The economists’ assumption is that firms and consumers utilize all available information to attain their goals and weigh all costs and benefits of each action taken. Moreover, firms and consumers only choose an action if the benefits exceeds the costs. Therefore, the action of manufacturing firms to move their operations from overseas back to the US due to the increased preference for US manufactured goods exemplifies that consumers and firms rely on all available information when pursuing their goals.

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3 years ago

The balance in accounts receivable at the beginning of 2016 was $600. During 2016, $3,200 of credit sales were recorded. If the

andreyandreev [35.5K]

Answer:

$3,100

Explanation:

Step 1: Draw up the Accounts Receivable Account

Opening Balance $600 Allowance for Doubtful debt $200

Sales $3,200 Cash Collected $3,100

Closing Balance $500

$3,800 $3,800

To calculate the cash collected from customers

first, add the debit side of the accounts receivable which is a sum of the opening balance and sales= 3,800

Secondly, add the figures in the credit side including allowance for doubtful debt and closing balance= $700

Thirdly, Subtract the lesser side from the greater, $3,800 - $700 = $3,100

$3,100 was cash collected from the customers in 2016

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3 years ago