The cost of the land & building is split among the assets purchased in proportion to the market value of the assets as a whole in the case of a basket purchase
<h3>What is a
basket purchase?</h3>
It is called a lump sum acquisition because its involves the purchase of many assets as a group.
In this purchase, when an investor purchases an assets, it means the the investor is able to buy many assets as one group in a single transaction,
Read more about basket purchase
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Answer:
August 1
Dr Legal Expense $9,600
Cr Common stock $8,000
Cr Paid Capital $1,600
August 15
Dr Cash $78,000
Cr Common stock $50,000
Cr Paid in Capital $28,000
October 15
Dr Land $51,000
Cr Common stock $30,000
Cr Paid in Capital $21,000
Explanation:
Preparation of the journal entries to record the stock issuances on August 1, August 15, and October 15.
August 1
Dr Legal Expense $9,600
Cr Common stock $8,000
(800 shares*$10 par value)
Cr Paid Capital $1,600
($9,600-$8,000)
(To record stock issuances)
August 15
Dr Cash $78,000
Cr Common stock $50,000
(5,000shares*$10 par value)
Cr Paid in Capital $28,000
($78,000-$50,000)
(To record stock issuances)
October 15
Dr Land $51,000
Cr Common stock $30,000
(3,000shares*$10 par value)
Cr Paid in Capital $21,000
($51,000-$30,000)
(To record stock issuances)
In the context of managerial accounting, wages, material costs, and taxes are examples of operating expenses. Operating costs are the costs associated with <span>incurred in carrying out an organization's day-to-day activities. They are not directly connected with the production process and the product itself.</span>
Given:
Purchase Price: 950
Sales tax: 5% of 950 = 47.50
Total amount applied for credit: 950 + 47.50 = 997.50
APR = 12.5%
Monthly interest rate: 12.5% / 12 = 1.0417%
Interest = 997.50 x 1.0417% = 10.3910 or 10.39
*I assumed that the sales tax paid was included in the credit card payment. Thus, interest for said tax was also computed. The late fee charged was not part of my computation because it is not a part of the original amount.