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2 years ago

Mr. Decker invested $20,000 in cash in his new business. How does the company record the investment?

Business

1 answer:

Rudiy272 years ago

8 0

Answer:

The company records the investment by the entry:

(D) debit Cash and credit Owner's Equity

Explanation:

Mr. Decker invested $20,000 in cash in his new business. He is the Owner of the company.

In the case, the company that he invested received cash from Mr. Decker.

The company will record the increasing in cash and increasing in Owner's Equity account by the journal entry:

Debit Cash $20,000

Credit Owner's Equity $20,000

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Griffin and Rhodes formed a partnership on January 1, 2009. Griffin contributed cash of $120,000 and Rhodes contributed land wit

Tresset [83]

Answer:

correct option is B. $15,000

Explanation:

given data

contributed cash = $120,000

Fair Value of land = $160,000

originally paid = $90,000

Sale value of land = $190,000

to find out

how much of the gain from sale of land should be credited to Griffin for financial accounting purposes

solution

gain on sale is here as

gain on sale = Sale value of land - Fair Value of land -

Gain on sale of land = $190,000 - $160,000

Gain on sale of land = $30000

split the $30000 between the equal partners for a total gain credited to Griffin

total gain credited to Griffin = $15000

so correct option is B. $15,000

6 0

1 year ago

A proposed project has fixed costs of $83,000 per year. The operating cash flow at 9,100 units is $ 102,900. Ignoring the effect

natta225 [31]

Answer:

Ignoring the effect of taxes, what is the degree of operating leverage?

1.81

If units sold rise from 9,100 to 9,500, what will be the increase in operating cash flow?

$8,171.43 or 7.94%

what is the new degree of operating leverage?

1.75

Explanation:

degree of operating leverage = (units sold x contribution margin) / [(units sold x contribution margin) - fixed costs]

(units sold x contribution margin) - fixed costs] = $102,900

units sold x contribution margin = $102,900 + $83,000 = $185,900

degree of operating leverage = $185,900 / $102,900 = 1.81

contribution margin = $185,900 / 9,100 = $20.4286

operating cash flow (at 9,500 units) = (9,500 x $20.4286) - $83,000 = $111,071.43

operating cash flow will increase by $8,171.43 or 7.94%

new degree of operating leverage = $194,071.43 / $111,071.43 = 1.75

8 0

2 years ago

Today, you are purchasing a 15-year, 6.5 percent annuity at a cost of $36,500. The annuity will pay annual payments starting one

Licemer1 [7]

Answer:

Periodic payment = $3,881.88 (Approx).

Explanation:

Given:

Present value of annuity = $36,500

Rate = 6.5% = 0.065

Number of payment = 15

Computation:

$Present\ value\ of\ annuity = periodic\ payment[\frac{1-(1+r)^{-n}}{r} ]$

$36,500 = periodic\ payment[\frac{1-(1+0.065)^{-15}}{0.065} ]\\\\36,500 = periodic\ payment[\frac{1-(1.065)^{-15}}{0.065} ]\\\\36,500 = periodic\ payment[\frac{1-0.388826524}{0.065} ]\\\\36,500 = periodic\ payment[\frac{0.611173476}{0.065} ]\\\\36,500 = periodic\ payment[9.40266886 ]\\\\periodic\ payment = 3,881.87658$

Periodic payment = $3,881.88 (Approx).

4 0

1 year ago

On January 1, Year 1, Bacco Company had a balance of $72,350 in its Delivery Equipment account. During Year 1, Bacco purchased d

Maksim231197 [3]

Answer:

Jan 1 balance 72,350

Add year 1 purchases $22,100

Total $94,450

Deduct the closing balance $69,400

Difference = sold equipment at Net Book Value = $25,050

Add accumulated depreciation to date = $22,000

Cost of equipment sold = $47,050.

Cash flow from investing activities.

Cash received from sale of equipment (the Net book value + Gain in sales) = $30,050

Cash invested in purchase of new equipment -$22,100

Net cash flow from investing activities $7,950

5 0

2 years ago

Joliet Company is planning to issue $1,000 par value bonds that have a coupon rate of 9.6%. The bonds will be sold at a market p

11111nata11111 [884]

Answer:

Pre-tax cost of debt is 8.7%

After-tax cost of debt is 5.66%

Explanation:

the cost of debt financing before tax is the yield to maturity on the bond, which can be computed using the rate formula in excel.

=rate(nper,pmt,-pv,fv)

nper is the number of times the bonds pay s interest which is 15*2=30

pmt is the semi-annual interest of the bond:9.6%/2*$1000=$48

pv is the current market price of $1,120 minus 4% flotation cost i.e 1120*96%=$1075.2

Fv is the face of the bond at $1000

=rate(30,48,-1075.2 ,1000)

rate=4.35% on semi-annual basis

rate =4.35%*2=8.7% on annual basis

after tax cost of debt =8.7%*(1-0.35)

=5.66%

4 0

2 years ago