All categories

2 days ago

The accounting records of Nettle Distribution show the following assets and liabilities as of December 31, 2014 and 2015. Decemb

er 3120142015 Cash$ 64,300$ 15,640 Accounts receivable26,240 19,390 Office supplies3,160 1,960 Office equipment44,000 44,000 Trucks148,000 157,000 Building0 80,000 Land0 60,000 Accounts payable3,500 33,500 Note payable0 40,000 Late in December 2015, the business purchased a small office building and land for $140,000. It paid $100,000 cash toward the purchase and a $40,000 note payable was signed for the balance. Mr. Nettle had to invest $35,000 cash in the business to enable it to pay the $100,000 cash. Mr. Nettle withdraws $3,000 cash per month for personal use.Required:1.Prepare balance sheets for the business as of December 31, 2014 and 2015. (Hint: Report only total equity on the balance sheet and remember that total equity equals the difference between assets and liabilities.)NETTLE DISTRIBUTIONBalance SheetDecember 31, 2014AssetsLiabilitiesCash$64,300Accounts payable$3,500Accounts receivable26,240Office equipment44,000Trucks148,000EquityTotal equity282,200Total assets$282,540Total liabilities and equity$285,700NETTLE DISTRIBUTIONBalance SheetDecember 31, 2015AssetsLiabilitiesCash$15,640Accounts payable$33,500Accounts receivable19,390Note payable40,000Office supplies1,960Office equipment44,000Trucks157,000Total liabilities73,500Building80,000EquityLand60,000Total equity304,490Total assets$377,990Total liabilities and equity$377,990Please show how you calculate this so I can have a clear understanding of how to arrive at the answers.Equity, December 31, 2014Add: Owner's investment35,000Add: Net income35,000Less: Owner WithdrawalsEquity, December 31, 2015$35,000

Business

You might be interested in

In three to four sentences, explain how taxes influence consumer decisions and buying power.

marusya05 [3725]

The market supply curve is influenced by factors like price and production expenses.
Many states impose sales tax on certain products and services to enhance revenue. However, such taxes also affect how consumers behave. These effects, along with the overall financial impact of sales tax, become apparent in the supply and demand curves when sales tax rates increase or when a new sales tax is instituted by a state.

8 0

2 months ago

Read 2 more answers

A manufacturing firm is considering two locations for a plant to produce a new product. The two locations have fixed and variabl

soldi70 [3635]

The cost advantage of different locations is $20,000. Phoenix appears to have a cost benefit over Atlanta and should be selected for the new facility instead of other options.

4 0

1 month ago

On April 1, Otisco, Inc. paid Garcia Publishing Company $1,548 for 36-month subscriptions to several different magazines. Otisco

marusya05 [3725]

Response:

advertising expense 387 debit

prepaid expense 387 credit

--to document expired advertising at the year's end ---

Details:

1,548 represents the value over 36 months

From April to December 31, 9 months have elapsed thus:

1,548 x 9/36 = 387 expired advertising

We will reduce our prepaid account and record the advertising expense for the expired amount

The prepaid expense is classified as an asset since it grants us the right to receive advertising for our product and brand during the contract period. Therefore, we credit it to decrease it

while the expense will debit our equity

4 0

2 months ago

Hillsong Inc. manufactures snowsuits. Hillsong is considering purchasing a new sewing machine at a cost of $2.45 million. Its ex

Mariulka [3825]

Answer:

NPV = negative 37,599

Explanation:

To determine the NPV of the new sewing machine, we subtract the investment from the present value of anticipated cash inflows.

Initial investment = Cost of machine + Training expenses - Salvage value

Initial investment = 2,450,000 + 85,000 - 250,000

Initial investment = 2,285,000

Year DF(9%) Present Value

1 Cash inflow 390,000 x 0.917 $357,798

2 Cash inflow 400,000 x 0.842 $336,672

3 Cash inflow 411,000 x 0.772 $317,367

4 Cash inflow 426,000 x 0.708 $301,789

5 Cash inflow 334,100 x 0.650 $217,077 (434,100 - 100,000)

6 Cash inflow 435,000 x 0.596 $259,376

7 Cash inflow 436,000 x 0.547 $238,507

7 Salvage value 400,000 x 0.547 $218,814

Present Value of cash inflow $2,247,401

Initial investment $2,285,000

NPV ($2,247,401 - $2,285,000) (37,599)

Conclusion: Hillsong should refrain from acquiring the new machine since the NPV is negative.

4 0

2 months ago