If a Company Purchases Equipment for Cash

Critical Thinking AICPA FN. Assets 30200 Cash 13900 Supplies 500 Prepaid Rent 1800 Equipment 5500 Truck 8500 Liabilities 200 Equity 30000.

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On the first day of the fiscal year a company issues a 980000 8 5-year bond that pays semiannual interest of 39200 980000 8 12.

. The most common liabilities are accounts payable and notes payable. C Total assets will remain the same. Total assets will increase by 70000.

Purchased 90000 of equipment by making a 37500 cash down payment and signing a note payable for the balance. On December 3 2021 Accounting Software Co. Total assets will decrease by 70000.

A cash payment journal is a journal in which any cash use View the full answer Transcribed image text. Corristan Company purchased equipment and incurred these costs. Made a 34500 cash payment on the note payable from the purchase of equipment.

A company purchases equipment for 32000 cash. A Increase in assets and decrease in assets B Decrease in liabilities and increase in assets. Total assets will increase by 70000.

The company purchases equipment with its cash available. D The companys total owners equity will decrease. During the month of February Metro Corporation earned a total of 50000 in revenue from clients who paid cash.

Total assets will decrease by 70000. Sold a piece of equipment for cash of 9000. Which of the following is correct if a company purchases equipment for 70000 cash.

The effect of this transaction on the accounting equation is. Equipment is part of an asset category called property plant and equipment or fixed assets. The purchase will also be included in the companys capital expenditures that are reported on the statement of cash flows in the section entitled cash flows from investing activities.

Assets will increase and owners equity will also increase. Assets will increase and owners equity will decrease. Which of the following is correct if a company purchases equipment for 70000 cash.

If you assume a 20 tax rate then the tax payment is reduced by 20000 and. If the purchase is on credit the company incurs a liability. Cash price 24000 Sales taxes 1200 Insurance during transit 200 Annual maintenance costs 400 Total costs 25800 What amount should be recorded as the cost of the equipment.

This transaction should be shown on the statement of cash flows under afinancing activities. Reflective Thinking AICPA BB. Cnoncash investing and financing activities.

Debit Networking equipment has been purchased by the business this is a long term asset of the business and is recorded in the networking equipment account on the balance sheet. Asked Oct 2 2016 in Business by malachi. The accounting equation reflects that one asset increases and another asset decreases.

Depreciation related to equipment used to manufacture a product will fall under Cost of Goods Sold COGS. The new accounting equation would be. If a company purchases equipment for 70000 cash.

Capital stock was issued to Bill Stern in exchange for 180000 cash. What elements of the accounting equation shall get affected by this. Assets will increase and owners equity will decrease.

Assets will increase and liabilities will decrease. Total assets will remain the same. Record the transaction If no entry is required for a transaction eventselect No journal entry required in the first account field View t Journal entry worksheet A compary purchases machinery for.

If a company purchased equipment for cash the accounting equation would show an. The companys total owners equity will decrease. Selling services for cash.

When you buy office supplies for your company the purchase affects the supplies expense account equity subaccount and the cash account asset. Spends 5000 of cash to purchase computer equipment for use in the business. Assets will increase and owners equity will remain unchanged.

Total assets will remain the same. This reduces taxable income by 100000. The company purchases equipment with its cash available in the companys bank account.

Record the purchase by increasing the supplies expense account with a debit and decreasing the cash account with a. A company purchases machinery for 15000 cash. A Total assets will increase by 70000.

Assets will increase and owners equity will also increase. If the purchase is for cash the company pays cash to the supplier in exchange for the asset. 25200 25800 24000 25400 O O.

If a company purchases equipment for cash. If a company purchases equipment on account. If a company purchases equipment on account Assets will increase OE will remain unchanged The collection of an accounts receivable is recorded by a debit to Cash and a.

Credit The business has paid out cash of 3000 as a down payment for the equipment and the asset of cash is reduced by the credit. When the equipment is placed into service the company will begin to report depreciation expense on the profit and loss statements during the years that the equipment is used. Assets will increase and owners equity will remain unchanged.

Total assets and owners equity will remain unchanged. So the first thing you will note is that COGS increases by 100000 because it includes depreciation. QUESTION 2 If a company purchases equipment for cash the transaction should be recorded in the sales journal.

B Total assets will decrease by 70000. Buy Equipment with Down Payment in Cash Explained.

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