Answer:
c. Net income will be overstated for the current year.
Explanation:
Depreciation is defined as the reduction in the value of an asset over the period of it's useful life.
The deductions are calculated and taken out of the asset value on the balance sheet.
The adjusting entry for depreciation at the end of year is a debit to Depreciation Expense and a credit to Accumulated depreciation.
If this entry is no passed it means that Depreciation Expense is not recognised for that year.
Net income will be overstated because generally expenses will be understated.
Answer:
Worth of both the property will be same.
Explanation:
Data provided in the question:
Cap rate for the Property A which is a self storage capacity = 6%
Cap rate for the Property B which is an office building = 6%
NOI of both the buildings are equal
Now,
Mathematically,
Cap rate is given as = [ NOI ] ÷ [ Worth of the property ]
or
Worth of the property = [ NOI ] ÷ [ Cap rate ]
Since, the NOI and cap rate for both the buildings are same
Therefore,
Worth of both the property will be same.
Answer:
D) 1,200 shares held at a cost basis of $37.50 per share
Explanation:
Since the company paid a stock dividend, it increased the number of stocks held by the stockholders. The investor initially had 1,000 shares plus a 20% dividend = 1,000 x 1.2 = 1,200 shares. Since each stock should theoretically be worth less, his/her basis should decrease. The basis for each stock was $44(price) + $1(commission) = $45, after the dividend is paid it will be adjusted to $45 / 1.2 = $37.50 per stock
Thank you for the points man ;)
