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Tatiana [17]
2 years ago
9

Gilbert Company made an ordinary repair to a delivery truck during 2016 at a cost of $500 and capitalized the repair cost. What

is the effect on the 2016 financial statements as a result of the incorrect capitalization?
Business
1 answer:
Leto [7]2 years ago
7 0

Answer:

The answer is:

Asset will be overstated

Net income will be overstated

Explanation:

Because of the incorrect capitalization(the process of converting or adding to a firm's asset):

1. Assets are overstated. Assets that shouldn't are added to the entire assets are added. So it's increasing the company's asset whereas it's not.

2. Net income are overstated. Because depreciation too will have to be charged for the asset that wasn't there, therefore, net asset will be overstated.

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Pharoah Company purchased $2600000 of 8%, 5-year bonds from Sheridan, Inc. on January 1, 2021, with interest payable on July 1 a
kobusy [5.1K]

Answer:

$75,260

Explanation:

Calculation for What should Pharoah Company report as other comprehensive income and as a separate component of stockholders' equity

Using this formula

Comprehensive income/separate component of stockholders' equity=Fair value-(Sales of bonds-July 1, 2021 Amortized premiums-December 31, 2021 Amortized premiums)

Let plug in the formula

Comprehensive income/separate component of stockholders' equity=$2,780,000 - ($2,724,740 - $9,820 - $10,180)

Comprehensive income/separate component of stockholders' equity=$2,780,000-$2,704,740

Comprehensive income/separate component of stockholders' equity= $75,260

Therefore What should Pharoah Company report as other comprehensive income and as a separate component of stockholders' equity is $75,260

8 0
1 year ago
Your research tells you that households earning $55,000 or more are most likely to be interested in a new shoe store. Households
olya-2409 [2.1K]

Answer:

COFFEE SHOPS would have a larger potential customer base.

NEW SHOE STORE is geared toward individuals with more disposable income.

Explanation:

The logic here is quite simple, households earning $25,000 or more are likely to be customers of the coffee shops. This also includes households earning $55,000 or more. So the consumer base of coffee shops is very large.

On the other hand, only households earning $55,000 or more are likely to be customers of the new shoe store. Since there are fewer households that earn $55,000 or more, their consumer base will be smaller and it should rather focus on people with more disposable income.

Even if 90% of the people earn above $55,000 and only 10% earn between $25,000 - $55,000, the consumer base of coffee shops will always be larger since it includes almost everyone.

8 0
1 year ago
Given a need to raise capital of $2 million and attorney costs of $150,000, with an underwriter's spread of 3%, the amount of bo
ipn [44]

Answer:

The amount of bond issuance is $2,085,500

Explanation:

The computation of the amount of bond issuance is shown below:

= Raise capital + attorney cost - underwriter spread

= $2,000,000 + $150,000 - 3% of $2,150,000

= $2,150,000 - 3% of $2,150,000

= $2,150,000 - $64,500

= $2,085,500

Hence, the amount of bond issuance is $2,085,500

We simply applied the above formula so that the correct value could come

6 0
1 year ago
"...there is quite as much trouble in the reformation of an old constitution as in the establishment of a new one, just as to un
Otrada [13]
This is an excerpt from Politics by Aristotle. It is a work of political philosophy by Aristotle. The end of the Nicomachean Ethics professed that the review into ethics essentially follows into politics, and the two works are commonly considered to be parts of a larger discourse, or perhaps connected lectures, dealing with the "philosophy of human affairs." The title of the Politics literally means "the things concerning the polis." This book is divided into eight books which are each further divided into chapters.
5 0
2 years ago
Read 2 more answers
Annie is self-employed and has $58,000 in income from her business. She also has investments that generated dividends of $3,000
8090 [49]
First, you need to know the self-employment taxes:
The self-employment tax is 92.35%
Social security tax is 12.4% and Medicare tax is 2.9% = (15.3%)

Dividends and interest are not a part of the income.

58000 * 92.35% *15.3% 
Turn the percentages into decimal form in order to multiply. You can do this by moving the decimals over twice or dividing each percentage by 100. 

58000*.9235 * .153 = $8,195.

Annie's self-employment tax for the year is $8,195. 
7 0
1 year ago
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