Choose the correct answer in the following statements about financial and real assets.Required:a. Toyota takes out a bank loan to finance the construction of a new factory.Toyota (Click to select) ✓a (Click to select)transaction.asset-the factory. The loan is a [(Click to select) asset that is (Click to select) in theb. Toyota pays off its loan.When the loan is repaid, the (Click to select) asset is (Click to select) but the (Click to select) asset continues to exist.c. Toyota uses $10 million of cash on hand to purchase additional inventory of spare auto parts.The cash is a (Click to select) ✓ asset that is traded in exchange for a [(Click to select) asset, inventory.

The objective of the question is to understand the nature of financial and real assets in the…

Answered: Choose the correct answer in the…

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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PRACTICE EXERCISE 3: EVALUATION: Decide whether long-term or short-term financing is needed Need/Activity Answer 1. Acquisition of equipment 2. Franchise of a fast-food outlet 3. Purchase of inventory for a clothing shop 4. Loan for agricultural needs (i.e. palay production, mango, etc.) 5. Loan for purchase of a commercial space 6. Development of a subdivision 7. Auto-loan 8. Loan for sari-sari store supplies 9. Housing Loan 10. Emergency loans (advances)
4. Classify each of the following as a current asset, a fixed asset, a current liability, or a long-term liability: (a) Accounts Receivable (b) Land (c) Bank Loan (6 months) (d) Office Supplies (e) Delivery Truck (f) Prepaid Rent (8) Automobile (h) Mortgage Payable (i) Taxes Owing (i) Government Bonds (k) Accounts Payable (1
Explain why the value of the leased asset is not recorded at $5,176 ($1,294 x 4). The leased asset should be reported at the of the payments, which is $, and not at $ Identify and analyze the transaction by using the following steps:1. Determine activity – operating, investing or financing.2. Determine accounts affected and the amount of increases/decreases.3. Determine the financial statements affected – balance sheet, income statement.The accounting equation must balance for each transaction.Determine amortization using the effective interest method (see Exhibit 10-7 below for an example). Date Column 1LeasePayment Column 2InterestExpense Column 3Reduction ofObligation Column 4LeaseObligation 8% Col. 1 - Col. 2 1/1/2017 - - - $15,972 12/31/2017 $4,000 $1,278 $2,722 13,250 12/31/2018 4,000 1,060 2,940 10,310 12/31/2019 4,000 825 3,175 7,135 12/31/2020 4,000 571 3,429 3,706 12/31/2021 4,000 294 3,706 0 Column 1 is the total amount of the payment. To…
1. WorldCom capitalized routine monthly fees that should have been expensed (treating its service provider as a rollover plan, when it did not rollover). The result was to inflate .... and reduce ....? a. Assets, Expenses b. Assets, Revenue c. Liabilities, Expenses d. Liabilities, Revenue 2. If an exchange lacks commercial substance, and no cash is received, a company should: a. Defer Gain b. Recognize Loss c. Both d. Neither
1. An asset that is purchased with the expectation that it will produce income or appreciate at some point in the future. A. Bond C. Deposit D. Investment B. Stock 2. It is a firm or an organization that brings together money from various people and invests it in stocks, bonds, or other assets. A. Insurance Company C. Real Estate D. Mutual Fund B. Deposit 3. The largest market in the world in terms of trading volume, so much liquidity. A. Currency C. Commodities B. Stock D. Investment 4. It is a form of security that indicates the holder has proportionate ownership in the issuing corporation. A. Bond C. Deposit D. Investment B. Stock 5. An income based on the outstanding principal and current interest rate. A. Active income C. Passive income B. Interest income D. Dividend income 6. It is a fixed-income instrument that signifies a loan made by an investor to a borrower (typically corporate or government). A. Bond B. Stock C. Deposit D. Investment 7. These investments are impractical to…
A bank loan approved for the business that has been paid into the bank account will have the following impact on the accounting equation. Group of answer choices Increase equity and increase asset Decrease an asset and decrease a liability Decrease an asset and decrease stockholders’ equity Increase an asset and increase a liability
Multiple choice: 1. To be repaid less than 1 year A. Unsecured loans B. Debt capital C. Intermediate loans D. Short term loans 2. Money obtained from income of the business is one basic source of capital A. Secured loans B. Machinery C. Internal funds D. Equity
Are the following assets real or financial? 1. Patents 2. Lease obligations 3. Customer goodwill 4. A college education 5. A $5 bill 6. Machinery 7. Preferred Stocks 8. Call option 9. Real estate 10. Certificate of Deposits
Group Case Study: As a loan officer in a bank, you received an application for a real estate loan from a borrower to buy an apartment in Dubai. The apartment is an unfurnished one bedroom flat situated in Park Island building (Sanibel) in Dubai Marina. Details about the property (and a comparable one sold in the same building) are presented in the following table: Property to be valued (A) Comparable Property (B) in March 2022 Sale date Selling price/value (AED) Gross annual rent (AED) January 2022 1,550,000 Annual Maintenance fees 20 20 (AED/square feet) Vacancy rate (%) Area (square feet) Price (AED/square feet) Gross annual rent (AED/square feet) Proximity to A Parking available Floor level Exterior (Building) 10 10 922 937 Same building 1. 1. high Floor to Ceiling Glass Full Marina View high Floor to Ceiling Glass Full Marina View View a. Using the market value approach, find the value of the property (A) (Suppose that the price listed is the selling price). b. Using the income…
Complete the problem below using these accounts as needed: Cash Accumulated Depreciation Party Bus Loss on Sale of Party Bus Depreciation Expense Gain on Sale of Party Bus PLEASE NOTE: You must enter the account names exactly as written above and all whole dollar amounts will be with "$" and commas as needed (i.e. $12,345). If no account name or DR/CR is needed, please use "None" and if no dollar amount is needed, please use "$0" - no quotation marks for either. You are to refer to the examples in the text for the proper order of the accounts. Party Hearty Co. owns a party bus that, all tricked out, costs $247,500, with accumulated depreciation of $123,450. Party Hearty Co. sells the party bus for cash. Record the journal entry for the sale of the party bus if Party Hearty Co. were to sell the party bus for the following amounts: Sold party bus for $118,635 cash: DR DR / CR? DR / CR? CR Sold party bus for $124,050 cash: DR DR…
===: Test I: Identification: Identify the correct and complete answer on the question provided. 1. Assets meeting the definition of an asset but without physical substance. 2. Known living plants or animals held by the business for resale or for breeding. 3. Resources owned by the company. 4. Owner's residual interest; includes capital contributions, revenues, expenses and drawings. 5. Obligation against the company. 6. Account represents bank loans as a source of financing for the entity; can span from 5 to almost 25 years. 7. A very vital resource owned and controlled by the business. 8. The right-hand side of the account. 9. Pertains to any capital infusion made by the owner for the year. 10. The quotient of current assets divided by the current liabilities of the company.
Listed below are balance sheet accounts for Elf’s Gift Shop. Mark currentaccounts with “C” and noncurrent accounts with “NC”_____ (a) Long-term debt._____ (b) Inventories._____ (c) Accounts payable._____ (d) Prepaid expenses._____ (e) Equipment._____ (f) Accrued liabilities._____ (g) Accounts receivable._____ (h) Cash._____ (i) Bonds payable._____ (j) Patents.

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