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3 years ago

If a company purchases equipment costing $5,100 on credit, the effect on the accounting equation would be:

Business

1 answer:

alex41 [277]3 years ago

4 0

Answer:

assets increase $5,100 and liabilities increase $5,100

Explanation:

Assets are the items that a company owns which can provide future economic benefit.

Liabilities are future sacrifices of economic benefits that an entity is obliged to make to other entities as a result of past transactions or other past events, hence Liabilities are what a person or company owe other parties.

If a company purchases equipment costing $5,100 on credit, the assets of the company will increase by $5100 as a result of acquiring an equipment. Also, the liability will increase by $5100 as a result of debt owed.

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Lexington Company engaged in the following transactions during Year 1, its first year in operation: (Assume all transactions are

worty [1.4K]

Answer:

Retained Earnings Balance at end of Year 1 = $360

Explanation:

First we need to determine the profit/loss for the year as part of the retained earnings calculation.

Lexington Company

Income Statement for the year ended - Year 1

Revenue Earned $3,200

Less Expenses ($2,420)

Net Income / (Loss) $780

Then we calculate the Retained Earnings Balance

Retained Earnings Statement

Beginning Retained Earnings Balance $ 0

Add Profit earned during the year $780

Less Dividends ($420)

Ending Retained Earnings Balance $360

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3 years ago

How does microfinance benefit an economy?

JulsSmile [24]

Answer:

it enables people to use money wisely

Explanation:

this is because a specific amount of money will be provided for a specific reason

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3 years ago

The difference between money coming into a country from exports and money leaving a country due to imports, plus money flows fro

Sophie [7]

Answer:

Balance of payments (BOP)

Explanation:

The balance of payments is referred to details of the transaction that held between two entities either in the same country or outside the country of a particular time period.

when the transaction was done for another country, there is a deduction of credit from the balance of payment and when transaction was done for the same country then credit is added to the BOP

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3 years ago

"why would a producer decide to produce in a competitive market in which she will earn zero profit in the long run?"

notka56 [123]

Money is not the only measure of success and not everything is transactional. A producer may choose to produce for many reasons. Among them, working with exceptional talent as well as gaining experience and getting street creds.

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3 years ago

Read 2 more answers

Valley Technology Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 9,700 Accounts Payable 1,500 Accounts Receivabl

ollegr [7]

Answer:

total liabilities = accounts payable $11,500 + unearned revenue $7,500 + debt $65,900 + other liabilities $800 = $85,700

Explanation:

Cash 9,700 Accounts Payable 1,500 Accounts Receivable 4,500 Debt 2,900 Inventory 3,800 Other Liabilities 800 Property Plant & Equipment 16,400 Total Liabilities 5,200 Other Assets 1,700 Paid-In Capital 7,300 Retained Earnings 23,600 Total Equity 30,900 Total Assets 36,100 Total Liabilities & Equity 36,100

1. Buy $15,000 worth of manufacturing supplies on credit

Supplies Accounts payable

debit credit debit credit

15,000 1,500

15,000

16,500

2. Issue $85,000 in stock

Cash Paid-In Capital

debit credit debit credit

9,700 7,300

85,000 85,000

94,700 92,300

3. Borrow $63,000 from a bank

Cash Debt

debit credit debit credit

94,700 2,900

63,000 63,000

157,700 65,900

4. Pay $5,000 owed to a supplier

Cash Accounts payable

debit credit debit credit

157,700 16,500

5,000 5,000

152,700 11,500

5. Receive payment of $12,000 owed by a customer

Cash Accounts receivable

debit credit debit credit

152,700 4,500

12,000 12,000

164,700 7,500

Due to some strange reason, accounts receivable has a debit balance (= $4,500 - $12,000). Since that is not possible, the remaining part $7,500 must be included under unearned revenue:

Accounts receivable Unearned revenue

debit credit debit credit

7,500 0

7,500 7,500

0 0 7,500

7 0

3 years ago