ESSENTIALS OF INVESTMENTS - CONNECT ACCE
11th Edition
ISBN: 9781266077951
Author: Bodie
Publisher: INTER MCG
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 1, Problem 7PS
For each transaction, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction? (LO 1-2)
a. Toyota takes out a bank loan to finance the construction of a new factory.
b. Toyota pays off its loan.
c. 'Toyota uses $10 million of cash on hand to purchase addiiona1 inventory of spare auto parts.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years.b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,500 shares of Microsoft stock.d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.
25 )
- Classify the following list of items as: revenue/expense/current asset/non-current asset/current liability/non-current liability/capital
a machine for manufacturing widgets
bill of air conditioning used in a factory
sales of 1,000 widgets for cash to Mr. Mohammad, a customer
£3,000 borrowed from the bank
a heap of metal on the yard, to be used for manufacturing widgets
£4,000 owed to Pyron Ltd for the metal in item 5
a Toyota Lexus car, used by an employee but owned by his/her employer, Yen Ltd
£10,000 of personal savings used by someone starting up a business.
Chapter 1 Solutions
ESSENTIALS OF INVESTMENTS - CONNECT ACCE
Ch. 1 - Prob. 1PSCh. 1 - Prob. 2PSCh. 1 - Prob. 3PSCh. 1 - Prob. 4PSCh. 1 - Prob. 5PSCh. 1 - Prob. 6PSCh. 1 - For each transaction, identify the real and/or...Ch. 1 - Prob. 8PSCh. 1 - Lanni Products is u start-.up computer software...Ch. 1 - Reconsider Lanni Products from Problem 9. (LO 1-2)...
Ch. 1 - Prob. 11PSCh. 1 - Examine the balance sheet of commercial banks in...Ch. 1 - Prob. 13PSCh. 1 - Prob. 14PSCh. 1 - Prob. 15PSCh. 1 - Prob. 16PSCh. 1 - Why would you expect securitization o take place...Ch. 1 - Prob. 18PSCh. 1 - Give an examp1e of three financial intermediaries,...Ch. 1 - Firms raise capital from investors by issuing...Ch. 1 - The average rate of return on investments in large...Ch. 1 - Prob. 22PSCh. 1 - Prob. 1WMCh. 1 - Prob. 2WMCh. 1 - Prob. 3WMCh. 1 - Prob. 4WM
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- - Classify the following list of items as: revenue/expense/current asset/non-current asset/current liability/non-current liability/capital1. a machine for manufacturing widgets2. bill of air conditioning used in a factory3. sales of 1,000 widgets for cash to Mr Mohammad, a customer4. £3,000 borrowed from the bank5. a heap of metal on the yard, to be used for manufacturing widgets6. £4,000 owed to Pyron Ltd for the metal in item 57. a Toyota Lexus car, used by an employee, but owned by his/her employer, Yen Ltd8. £10,000 of personal savings used by someone starting up a business.arrow_forwardQ2) Pls, answer it with clear and simple steps by steps.arrow_forwardFarmCo sold a tractor for $40,000 that they initially purchased for $30,000 cash from John Deere. How is the $30,000 journalized? Select an answer: as a credit to Assetsas a liabilityas revenueas cost of goods soldarrow_forward
- ns are landatory Question (2) Jerry has purchased $5,000 of new computer equipment for his company. He is able to pay $1,000 in cash; the balance is financed over a period of 36 months. How will this transaction be recorded on the balance sheet of the company? 0 O Subtract $1,000 from cash; add $5,000 to net assets; add $5,000 to long-term liabilities. O Subtract $1,000 from cash; add $5,000 in fixed assets; add $4,000 in long-term liabilities. O Subtract $1,000 from cash; add $4,000 in fixed assets; add $4,000 in long-term liabilities. O Add $5,000 in fixed assets; add $4,000 in long-term liabilities and add $1,000 in current liabilities. Bookmark for reviewarrow_forwardRequired: Prepare the entries to record the above transactions. 2. Lileth Adriano, who plans to go abroad, is selling her mini-donut business. Her friend, Benita Solido is interested to buy it but can only afford to pay P350,000. The following are the assets of Adriano's business: Book Value Market Value Equipment (net of accumulated depreciation of P25,000) Furniture and Fixtures (net of accumulated depreciation of P5,000) Raw Materials Franchise Right P350,000 P300,000 75,000 50,000 35,000 25,000 150,000 100,000 Total P610,000 P475,000 a. How much is the net worth assuming there is a mortgage note of P150,000 attached to the equipment? b. Will Benita Solido be able to afford to buy the business? Make the entry in the books of Benita. C. Page 1 -arrow_forwardMr. Steve Persian hired Elizabeth to prepare the Statement of Financial Position of his business. To prepare the statement, Elizabeth identified the following assets and liabilities of Mr. Persian: a. Cash deposited in YKY Bank amounting to P100, 000 b. He has uncollected sales from customers amounting to P50, 000 c. The total amount of merchandise left inside the warehouse is P35, 000 d. Steve paid in advance the rent amounting to P15, 000 for one year. e. The machineries and equipment amounted to P150, 000 f. He bought the materials from his suppliers amounting to P30, 000 and promised to pay the said amount one month after the end of the year. g. He paid the contributions of his employees such as SSS, Philhealth and Pag ibig amounting to P6, 500 h. Outstanding balance to Meralco is amounting to P3, 500 i. He acquired a 2 year loan from YKY Bank amounting to P45, 000.arrow_forward
- Complete the columns to show the effect of the following transactions: Transaction Asset Liability Capital (a) Bought a motor Van on credit $500 (b) Repaid by cash a loan owed to P Smith $1,000 (c) Bought goods for $150 paying by cheque (d) The owner puts a further $5,000 cash into the business (e) A debtor returns to us $80 goods. we agree to make an allowance for them (f) Bought goods on credit $220 (g) The owner takes out $100 cash for his personal use.arrow_forwardA business, Sandy's Traders, was opened on 1 January 2020 when the owner invested R25 000 and R100 000 was borrowed from the local bank. Assets in the business included: R6 000 R30 000 R77 000 Computer Inventory Motor car Cash in the bank 7 What was the amount of cash left in the bank account? Answer: Iarrow_forwardChoose the best explanation of the missing amount (?) in the T account below: Note Payable $ 10,000 1-Jan $ 10,000 ? $ 5,000 31-Dec O The company paid $5,000 for interest expense and the loan. O The company paid the bank $5,000 to reduce the loan. O The company sold equipment costing $5,000. O The company sold a long-term asset to a customer receiving a note in exchange for the item sold. O The company purchased equipment costing $5,000 with a bank loan.arrow_forward
- 1) Sampaguita Company has incurred the following transaction during the month July, 2020: a. Purchase of goods on cash, P150,000 b. Sale of goods on cash, P330,000 c. Paid utilities, P30,000 d. Borrowed P100,000 from Banco de Oro e. Paid rent P10,000 f. Sold equipment for cash P100,000 g. Owner withdraws investment P10,000 h. Paid suppliers, P10,000 Assuming that the cash balance at the beginning of July is P188,000, prepare a Statement of Cash flow for the month. Using DIRECT METHOD.arrow_forwardThe following cases relate to the valuation of assets. Consider each case independently.a. World-Wide Travel Agency has office supplies costing $1,700 on hand at the balance sheet date. These supplies were purchased from a supplier that does not give cash refunds. World-Wide’s management believes that the company could sell these supplies for no more than $500 if it were to advertise them for sale. However, the company expects to use these supplies and topurchase more when they are gone. In its balance sheet, the supplies were presented at $500.b. Perez Corporation purchased land in 1957 for $20,000. In 2011, it purchased a similar parcelof land for $300,000. In its 2011 balance sheet, the company presented these two parcels ofland at a combined amount of $320,000. c. At December 30, 2011, Lenier, Inc., purchased a computer system from a mail-order sup-plier for $14,000. The retail value of the system—according to the mail-order supplier—was $20,000. On January 7, however, the system…arrow_forward1arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning
Managerial Accounting: The Cornerstone of Busines...
Accounting
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Cengage Learning
7.2 Ch 7: Notes Payable and Interest, Revenue recognition explained; Author: Accounting Prof - making it easy, The finance storyteller;https://www.youtube.com/watch?v=wMC3wCdPnRg;License: Standard YouTube License, CC-BY