Question

Consider each of the transactions below. All of the expenditures were made in cash.

Answer 1

Answer:

of the expenditures were made in cash.

a. The Edison Company spent $12,000 during the year for experimental purposes in connection with the development of a new product.

b. In April, the Marshall Company lost a patent infringement suit and paid the plaintiff $7,500.

c. In March, the Cleanway Laundromat bought equipment. Cleanway paid $6,000 down and signed a noninterest-bearing note requiring the payment of $18,000 in nine months. The cash price for this equipment was $23,000.

d. On June 1, the Jamsen Corporation installed a sprinkler system throughout the building at a cost of $28,000.

e. The Mayer Company, plaintiff, paid $12,000 in legal fees in November, in connection with a successful infringement suit on its patent.

f. The Johnson Company traded its old equipment for new equipment. The new