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Andre45 [30]
3 years ago
13

Phoenix Agency leases office space for $7,000 per month. On January 3, Phoenix incurs $65,000 to improve the leased office space

. These improvements are expected to yield benefits for 8 years. Phoenix has 5 years remaining on its lease. Compute the amount of expense that should be recorded the first year related to the improvements.
$8,125.

$13,000.

$6,000.

$65,000.

$20,000.
Business
1 answer:
Daniel [21]3 years ago
4 0

Answer:

correct option is $13,000

Explanation:

given data

leases office = $7,000 per month

Phoenix incurs = $65,000

yield benefits = 8 years

remaining on its lease = 5 years

solution

we know that The cost of leasehold improvement is depreciate whichever is less    

(a)  Remaining Lease Term      

(b) estimated useful life of improvement

so Annual depreciation of Leasehold Improvement will be here

Annual depreciation of Leasehold Improvement = \frac{65000}{5}

Annual depreciation of Leasehold Improvement = $13,000

so correct option is $13,000

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The following is a condensed version of the comparative balance sheets for Pearl Corporation for the last two years at December
Maksim231197 [3]

Answer:

Balance Sheets    

2020          2019                Deviation  

$292,050 $128,700  $163,350        Cash

$163,350   Cash Flow Ind Method  

$264,000   Net Income  

$28,050   Depreciation  

-$49,500   Dividends  

$36,300   Investments  

$8,250           Accounts Receivable  

-$28,050   Current Liabilities  

-$95,700   Property and Equipment  

Explanation:

To prepare the statement of cashflow it's necessary to calculate the difference between the balance on each year.

First we need the value of the Net Income and Depreciation of the year as initial value of the cash flow ($264,000+$28,050),  

then we deduct the amount of dividends paid during the year (-$49,500).  

Then we begin to calculate the Assets section, everytime that the Assets are higher than the past year we have to put money  

from the cash flow to compensate the assets increase and vice versa, with exception of the Cash Accounts that we are calculating.

Per Example: Accounts Receivable +$8,250 and Investments +$36,300.

Property decreased Cash flow which means that we buy some assets (-$97,500 )

Then with the Liabilities we do the same but in this case an increase in the liabilities means we have more money to our cash flow,

per example, an increase in the accounts payable means that we paid less to our suppliers so we have the money in the cash accounts.  

Total Current Liabilities decrease $28,050 , we paid more liabilities than the past year, so we have to use cash.  

To complete the cash flow statement  it's necessary that the amount of the statement be equal to the deviation in the cash account between the past year and the current one  

6 0
3 years ago
Jerome, Sheila, Gary, and Ella agreed to purchase a tract of land and make it available for use as a free playground for neighbo
lesya [120]

Answer:

Yes

Explanation:

The damages can be recovered as Jerome and Gary hung the playground swing improperly. A child was injured due to their negligent actions. The case will be on Meadowbrook Playground and not on the individual person who has committed the mistake. According to law, the damages can be recovered as the enterprise owned the whole property, and due to their carelessness in the installation of swing, the accident took place. The child's parent has every right to recover damages from the playground owner.

7 0
3 years ago
When does a corporation record an increase in Dividends Payable?
Gnoma [55]

Answer:

B. On the declaration date

Explanation:

Dividend payable are usually advised by management but must be ratified by the shareholders (usually in the annual general meeting) for such to be come recognizable in the books. The date of ratification is the declaration date

As such a corporation record an increase in Dividends Payable on the declaration date.

The right option is B. On the declaration date

4 0
3 years ago
Decision alternatives:_______
LenaWriter [7]

Answer:

The correct answer is letter "A": should be identified before decision criteria are established.

Explanation:

Decision criteria represent the set of steps individuals take while making a decision. Before taking a decision and selecting decision criteria, the decision alternatives must be outlined. Thanks to these alternatives a problematic situation will be resolved.

3 0
2 years ago
What is break even point?
maks197457 [2]

Answer:

The break-even point in economics, business—and specifically cost accounting—is the point at which total cost and total revenue are equal, i.e. "even". There is no net loss or gain, and one has "broken even", though opportunity costs have been paid and capital has received the risk-adjusted, expected return.

Explanation:

6 0
3 years ago
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