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3 years ago

For each of the following accounts, indicate the effect of a debit or credit on the account and the normal balance.

Business

1 answer:

Hunter-Best [27]3 years ago

6 0

Answer:

Debit effect Credit effect Normal balance

a. Bonds payable Decrease Increase Credit

b. Unearned service revenue Decrease Increase Credit

c. Depreciation expense Increase Decrease Debit

d. Common stock Decrease Increase Credit

e. Building Increase Decrease Debit

f. Rent revenue Decrease Increase Credit

All assets, expenses increase with debits and decreases with credit and have a debit normal balance. All liabilities, revenue accounts and equity accounts (except dividends) have credit.

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Pitney Co. purchased an office building, land, and furniture for $639,300 cash. The appraised value of the assets was as follows

serg [7]

Solution :

a). Amount to be recorded on the books for each of the assets.

Working Allocated cost($)

Land (639,300 / 716,016 )x 136,043 121467

Building (639,300 / 716,016 )x 179,004 159825

Furniture (639,300 / 716,016 )x 400,969 358008

Total 639,300

b). Statement model

Assets : Cash + Land + Building + Furniture

639,300 + 121,467 + 159825 + 358008

Cash flow = 639,300

c). Journal entry

General journal Debit($) Credit($)

Land 121,467

Building 159,825

Furniture 358,008

Cash 639,300

5 0

2 years ago

Franklin Aerospace has a quick ratio of 2.00x, $36,225 in cash, $20,125 in accounts receivable, some inventory, total current as

MrRissso [65]

Answer:

8.28 times

Explanation:

The number of times that Franklin Aerospace sell and replaces its inventory shall be determined through following mentioned formula:

Inventory turnover=sales/inventory balance

First we have to calculate the inventory balance which shall be determined as follows:

Quick ratio=current assets-inventory/current liabilities

2= $80,500-inventory/ $28,175

$56,350=$80,500-inventory

Inventory=$80,500-$56,350=$24,150

Now we will the number of times that Franklin Aerospace sell and replaces its inventory:

Inventory turnover=$200,000/$24,150=8.28 times

8 0

3 years ago

Knightmare, Inc., will pay a dividend of $6.15, $9.05, and $12.25 per share for each of the next three years, respectively. The

iVinArrow [24]

Answer:

The current stock price is $21.54

Explanation:

The current price of the share of Knightmare Inc is the present value of all future cash flows receivable from owning stake in the company.

The future cash flows in this sense are the dividends payable by the company in years 1,2 and 3 which are $6.15,$9.05 and $12.25 per share respectively.

The discount factor in this case is given as 1/(1+r)^N where r is the required rate of return of 11.7% and the relevant year of dividend receipt,hence the share price is computed thus:

Year cash flow discount factor PV

1 $6.15 1/(1+11.7%)^1=0.89525 $5.5

2 $9.05 1/(1+11.7%)^2=0.80148 $7,25

3 $12.25 1/(1+11.7%)^3=0.71753 $8.79

Total present value $21.54

4 0

3 years ago

Read 2 more answers

Chipper Corporation realized $1,000,000 apportionable taxable income from the sales of its products in States X and Z. Both stat

SIZIF [17.4K]

Answer:

a. $0

Explanation:

The business would not be subject to taxation in a state until nexus is established; thus the Chipper’s Apportionable income (which means income of any class or type or any activity, that fulfils the connection or criteria described either in the "functional test" or "transactional test,”.) that is taxed by X equals $0

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3 years ago

Describe an example of a company that manufactures a product.

dexar [7]

General Motor Company(GMC) is a manufacturing company that manufactures automobiles in U.S.A.

3 0

3 years ago