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OverLord2011 [107]
3 years ago
6

The following events occurred for Favata Company: Received $16,000 cash from owners and issued stock to them. Borrowed $13,000 c

ash from a bank and signed a note due later this year. Bought and received $1,400 of equipment on account. Purchased land for $24,000; paid $2,200 in cash and signed a long-term note for $21,800. Purchased $9,000 of equipment; paid $2,200 in cash and charged the rest on account. Required: For each of the events (a) through (e), perform transaction analysis and indicate the account, amount, and direction of the effect on the accounting equation. (Enter any decreases to account balances with a minus sign.)
Business
1 answer:
Rama09 [41]3 years ago
6 0

Answer:

(a) + Cash Increase in Assets $16,000 = Liabilities No effect + Stockholders Equity $16,000

(b) + Bank Account Increase in Assets $13,000 = + Borrowings Increase in Liabilities $13,000, No effect on Stockholder's Equity

(c) + Equipment Increase in Asset $1,400 = + Accounts Payable Increase in Liability $1,400, No effect on Stockholder's Equity.

(d) Increase in Assets $21,800 = Increase in Liability $21,800

(e) Increase in Assets $6,800 = Increase in Liability $6,800

Explanation:

(a) Received $16,000 cash from owners and issued stock to them.

Cash received shall increase the cash account in assets by the same i.e. $16,000.

At the same time stock is issued thus, common equity will increase, i.e. Increase in Stockholder's Equity by $16,000

(b) Borrowed $13,000 cash from a bank and signed a note due later this year.

This will increase funds in form of cash and bank balance, basically bank account, i.e. Increase in Asset by $13,000.

This will equally increase as a current liability in the form of notes payable, i.e. increase in liabilities by $13,000.

(c) Bought and received $1,400 of equipment on account.

Since equipment is bought it will increase equipment by $1,400, i.e. an increase in asset.

Also it is bought on account. Thus, liability in accounts payable shall increase by the same $1,400.

(d) Purchased land for $24,000; paid $2,200 in cash and signed a long-term note for $21,800.

This will increase land by $24,000, and decrease cash by $2,200. This will have net impact of increase in assets of $21,800.

Further there is increase in liability of $21,800 which is long term in nature.

(e) Purchased $9,000 of equipment; paid $2,200 in cash and charged the rest on account.

Since equipment is purchased, it will increase equipment account and will decrease cash, on a net effect assets will increase by $9,000 - $2,200 = $6,800.

further liabilities in the form of account payable will increase, by $6,800.

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The condensed product-line income statement for Rhinebeck Company for the month of October is as follows:
Sonja [21]

Answer:

Mufflers should be continued (Alternative 1)

Explanation:

Preparation of a differential analysis dated to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2).

DIFFERENTIAL ANALYSIS

Continued (Alternative 1); Discontinued (Alternative 2); Differential effect on income Alternative 2)

October 31

Revenue $45,000 $0 ($45,000)

Costs:

Variable cost of goods sold ($21,600) $0 $21,600

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7 0
3 years ago
After its success in Japan, Starbucks worked with local operators, collecting initial fees and then royalties on store revenues
kotykmax [81]

Answer:

Franchising.

Explanation:

Franchise is a license consisting of a contractual arrangement between a parent company (franchiser or franchisor) and another (franchisee), that allows individuals or an organization access to its knowledge, processes, trademarks in order to provide a service.

One of the main advantages of a franchise is that, franchisers such as Starbucks do not require additional capital and development expenses to have their businesses being situated in a foreign market or country, as they only required to issue licenses to franchisors who are interested in being part of their business by paying a fee. For instance, Starbucks could give the authority to an individual or group of people which would enable them to do the same business in another geographical location.

Hence, this type of relationship best describes franchising because Starbucks worked with local operators while collecting initial setup fees and then royalties on store revenues generated by the franchisees as it entered other Asian countries.

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Answer:

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3 years ago
TopChop sells hairstyling franchises. TopChop receives $62,000 from a new franchisee for providing initial training, equipment,
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Answer:

$65,332

Explanation:

The computation of revenue in 2021 is shown below:-

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