Answer:
The correct option is A,A. 7,000 = NA + 2,000 - (5,000) NA - NA = NA 7.000 FA
Explanation:
By issuing the treasury stock ,asset,cash to be precise increases by $7000($35*200) which implies a debit to the asset ,hence the $7000 seen on the left hand-side of the equation.
This transaction has no liability impact,as a result liabilities is denoted NA,not applicable.
The par value of the treasury is to be credited to treasury stock with $5,000($25*200).
Lastly the difference between the par value and the issue is credited to paid-in capital from treasury stock i.e($35-$25)*200))=$2000,this is depicted by $2000 in the equation
Answer:
C. NPV is the discounted present value of a project's expected future accounting net income at the required return, subtracting the initial investment.
Explanation:
NPV means Net Present Value, this is calculated by computing the present value of cash returns and not the accounting income, as accounting income takes in account non cash items also, although while computing returns the non cash transactions are not considered.
Therefore the chosen statement which states about accounting income less initial investment is false as even in case the project requires additional mid term investment then that is also considered.
Thus, false statement is
Statement C
Answer:
$60,500
Explanation:
With regards to the above, the write off does not affect the realizable value of accounts receivables. Also, the total asset or net income is not affected by the write off or specific account. Instead, both assets and net income are affected in the period when bad debt expense is predicted and then recorded with an adjusting entry.
Accounts receivables
$550,000
Less:
Allowance for doubtful account
($550,00 × 2.5%)
($13,750)
Estimated realizable accounts receivables
$536,250
If the amount of bad debt decreases or increases as given below, then the income is also increased or decreased by the amount given.
Bad debts = $13,750
Uncollectible previously written off = $8,800
Difference
$4,950
Net income
$60,500
Less:
Difference
($4,950)
Reported income
$55,550
