contestada

Indicate whether the following property, plant, and equipment related transactions increased (I), decreased (D), or had no effect (NE) on the financial statement elements below.
Transaction Cash Noncash Assets Liabilities Revenues / Gains Expenses / Losses
a. Acquired a machine by issuing a 5%, 5-year, $100,000 note with no down payment.
b. Incurred and paid annual interest cost of $40,000, including $8,000 of capitalized interest.
c. Spent $40,000 to upgrade an existing building. The upgrades increased the original useful life of the building.
d. Spent $5,000 for routine maintenance on existing manufacturing equipment.
e. Sold a piece of land for $125,000. The original cost of the land was $105,000.

Respuesta :

Answer:

Question answered and explained in the Explanation section. Thank you.

Explanation:

A) Acquired a machine by issuing a 5%, 5-year, $100,000 note with no down payment.

Cash (No Effect) Note was issued, no down payment

None Cash (Increased)

Assets (Increased) - Asset acquired

Liabilities (Increased) - Payment must be made

Gains (No Effect)

Expenses (No Effect)

b. Incurred and paid annual interest cost of $40,000, including $8,000 of capitalized interest.

Cash (Decreased) Interest cost paid out of cash

None Cash (No Effect)

Assets (No Effect)

Liabilities (Decreased) - Payment was made for interest

Gains (No Effect)

Expenses (Decreased)

c. Spent $40,000 to upgrade an existing building. The upgrades increased the original useful life of the building.

Cash (Decreased) Cash was paid for the upgrade

None Cash (No Effect)

Assets (Increased) Upgraded existing building increases in value

Liabilities (No Effect)

Gains (No Effect)

Expenses (Increased)

d. Spent $5,000 for routine maintenance on existing manufacturing equipment.

Cash (Decreased) Cash was paid for the maintenance

None Cash (No Effect)

Assets (No Effect)

Liabilities (No Effect)

Gains (No Effect)

Expenses (Decreased)- Maintenance amount already paid

e. Sold a piece of land for $125,000. The original cost of the land was $105,000.

Cash (Increased) Cash made from sale of land

None Cash (No Effect)

Assets (Decreased) - The land sold was an asset

Liabilities (No Effect)

Gains (Increased)

Expenses (No Effect)

Otras preguntas