
1.
Investment: The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.
Journal: Journal is the method of recording monetary business transactions in chronological order. It records the debit and credit aspects of each transaction to abide by the double-entry system.
Rules of Debit and Credit:
Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
To Journalize: The investment made by Company FM on January 1, 2018.
2.
To Journalize: The semiannual interest received by Company FM on June 30, 2018.
3.
To Journalize: The semiannual interest received by Company FM on December 31, 2018.
4.
To Calculate: The amount of investment to be recorded in the
5.
To Explain: The effect of investment by Company FM on December 31, 2018, in the statement of

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Chapter 12 Solutions
Intermediate Accounting
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- The KLM Medical Clinic has two auxiliary departments: the Building Maintenance Department and the Energy Production Department as well as three main production departments: the Department of Paediatrics, the Department of Internal Medicine and the Department of Surgery. The CLM allocates the cost of the building maintenance department based on the area occupied by the departments in square meters and the cost of the energy department based on the days of hospitalization of patients. No distinction is made between variable and fixed cost elements. The budgeted operating figures for the previous year were as follows: Auxiliary sections Main production departments Building maintenance Energy production Pediatrics Department of Internal Medicine Surgical Estimated cost before allocation 18.000,00 8.000,00 80.000,00 50.000,00 90.000,00 Area (in sq.m) 1.000,00 4.000,00 6.000,00 18.000,00 12.000,00 Patient Hospitalization…arrow_forwardwhat is financial accounting? explain its parts and all things.arrow_forwardSystematic relationship quarrow_forward
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