Answer:
Debit Depreciation Expense, $525;
Credit Accumulated Depreciation, $525.
Explanation:
Based on the information given in a situation where the financial statements are to be prepared on December 31, which means that the company should make the following adjusting entry:
Debit Depreciation Expense, $525
Credit Accumulated Depreciation, $525
Calculated as:
Debit depreciation expense $6,300/12
Debit depreciation expense=$525
Answer:
Explicit costs - $51,000
Explicit costs are those for which a person incurs in actual spending of money. In this case, Christine had to pay $15,000 in wages, and $36,000 in rent ($3,000 x 12). These are expenses that she had to pay money for, and that had to be accounted for in the accounting books, and in the financial statements. These are in other words, explicit costs.
Implicit costs - $40,000
Implicit costs are simply the opportunity costs. An opportunity cost is the cost of the next more valuable alternative when faced with two or more options. No money is paid for this costs. The implicit costs for Christine were the $40,000 that she not receive as wages if she had continued working at a real state firm.
Answer:
Issue of 7,000 shares of no-par common stock for $15 per share
Financing Activity (FA).
Issue of 2,800 shares of $70 par, 6 percent noncumulative preferred stock at $80 per share
Financing Activity (FA)
Explanation:
Issue of 7,000 shares of no-par common stock for $15 per share
This represents capital funding and is included in the Cash Flow Statement as Cash Flow from Financing Activity.
Issue of 2,800 shares of $70 par, 6 percent noncumulative preferred stock at $80 per share
This transaction also represents capital funding and is included in the Cash Flow Statement as Cash Flow from Financing Activity.
