Answer:
A. $ 24,000
Explanation:
Given that Jerry received $24,000 for the first year’s rent and $24,000 for the last year’s rent, the amount received for the first year's rent is the amount earned by Jerry in the first year and as such is recognized as the income for the year.
The $24,000 received as rent for the last year is not an earned income but a deferred income. It may also be called unearned revenue and is accounted for as a liability until it is earned (in the last year).
As such, only $24,000 of the $48,000 received is included in Jerry’s current-year income.
Answer:
increase assets by $13,000, increase liabilities by $13,000 and have no effect on equity.
Explanation:
Given that
The total cost of purchase of delivery truck = $15,000
Cash paid = $2,000
The accounting equation equals to
Total assets = Total liabilities + owners equity
The remaining amount left would be equal to
= $15,000 - $2,000
= $13,000
So it would increase the assets for $13,000 as the delivery truck is purchased plus there is also an increase in liabilities for $13,000 as it signed a note payable and there is no effect on equity
Answer: The value of the property is $156000.
Explanation: The value according to the cost approach is given by
(The estimated value of the land + The replacement cost of the house + additional improvements) - (Depreciation).
Therefore the calculation is:
<u>(33000 + 110000 + 20000) - (7000) = $ 156000.</u>
Answer:
C. Purchase of treasury stock
Explanation:
The purchase of treasury stock results in a change in the stockholder's equity and as such is recognized as a financing activity in the statement of cash flows.
For the other options, amortization expense is a non-cash item and is adjusted for in the net cash flows from operating activities.
Collection of notes receivable is a change in current assets hence it is reported under net cash flows from operating activities.
Sale of equipment is reported under net cash flows from investing activities.
Hence the right option is C. Purchase of treasury stock.
