Activity 4-2. Natural Form vS. Functional FormMercedita's business is had just opened last year. She buys products online andalso sells them online. Her business had been earning a profit since then. Toobtain how much she earned, Mercedita just deducts all her costs and expensesfrom her total sales. She wants to know if the method she is using will benefit thebusiness the most.1. What method is she applying for the business?2. What would you recommend to Mercedita. Support your answer. (Threesentences)

Answer: Natural form of income statement is booking of expenses on the basis of nature. Functional…

Answered: Activity 4-2. Natural Form VS.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] While completing undergraduate school work in information systems, Dallin Bourne and Michael Banks decided to start a technology support company called eSys Answers. During year 1, they bought the following assets and incurred the following start-up fees: Year 1 Assets Purchase Date Basis Computers (5-year) October 30, Year 1 $ 16,400 Office equipment (7-year) October 30, Year 1 10,000 Furniture (7-year) October 30, Year 1 5,800 Start-up costs October 30, Year 1 19,520 In April of year 2, they decided to purchase a customer list from a company providing virtually the same services, started by fellow information systems students preparing to graduate. The customer list cost $12,520, and the sale was completed on April 30. During their summer break, Dallin and Michael passed on internship opportunities in an attempt to really grow their business into something they could do full time after graduation.…
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