Introduction to Economics

D’Lite Dry Cleaners is owned and operated by Joel Palk. A building and equipment are currently being rented, pending expansion to new facilities. The actual work of dry cleaning is done by another company at wholesale rates. The assets and the liabilities of the business on July 1, 2014, are as follows: Cash, $45,000; Accounts Receivable, $93,000; Supplies, $7,000; Land, $75,000; Accounts Payable, $40,000. Business transactions during July are summarized as follows: a. Joel Palk invested addi...

Kendra Gorman is the owner and operator of Mega Concepts, a motivational consulting business. At the end of its accounting period, December 31, 2013, Mega Concepts has assets of $1,250,000 and liabilities of $475,000. Using the accounting equation and considering each case independently, determine the following amounts: a. Kendra Gorman, capital, as of December 31, 2013. b. Kendra Gorman, capital, as of December 31, 2014, assuming that assets increased by $225,000 and liabilities increased by...

a. Arrowhead Delivery Service is owned and operated by Gates Deeter. The following selected transactions were completed by Arrowhead Delivery Service during August: 1. Received cash from owner as additional investment, $25,000. 2. Paid creditors on account, $3,750. 3. Billed customers for delivery services on account, $22,400. 4. Received cash from customers on account, $11,300. 5. Paid cash to owner for personal use, $6,000. Indicate the effect of each transaction on the accounting equat...

Josh Reilly is the owner of Dispatch Delivery Service. Recently Josh paid interest of $4,500 on a personal loan of $75,000 that he used to begin the business. Should Dispatch Delivery Service record the interest payment? Explain.

A business had revenues of $640,000 and operating expenses of $715,000. Did the business (a) incur a net loss or (b) realize net income?

1. Twenty percent of all businesses in the United States are corporations and they account for 80% of the total business dollars generated. True False 2. A corporation is a separate entity for accounting purposes but not for legal purposes. True False 3. The financial loss that each stockholder in a corporation can incur is usually limited to the amount invested by the stockholder. True False 4. Under the Internal Revenue Code, corporations are required to pay federal ...

U.S. GAAP Term IFRS International Term Statement of comprehensive income* Statement of comprehensive income Balance sheet Statement of financial position Interest expense Finance costs Net income Profit for the year Trading investments Financial assets at fair value through profit or loss Excess of issue price over par Share premium Examples: Accumulated other comprehensive income, treasury stock, unrealized gain (loss) on available-for-sale investments Reserves Notes payable Lo...

1. Horizontal analysis is the percentage analysis of increases and decreases in corresponding statements. The percent change in the cash balances at the end of the preceding year from the end of the current year is an example. Vertical analysis is the percentage analysis showing the relationship of the component parts to the total in a single statement. The percent of cash as a portion of total assets at the end of the current year is an example. 2. Comparative statements provide informatio...

1. A company may temporarily have excess cash that is not needed for use in its current operations. Instead of letting excess cash remain idle in a checking account, most companies invest their excess cash in temporary investments. The primary objective of investing in temporary investments is to: a. earn interest revenue. b. receive dividends. c. realize gains from increases in the market price of the securities. 2. A gain or loss can occur when the selling price of the bond differs ...

1. (1) To pay the face (maturity) amount of the bonds at a specified date. (2) To pay periodic interest at a specified percentage of the face amount. 2. a. Bonds that may be exchanged for other securities under specified conditions. b. The issuing corporation reserves the right to redeem the bonds before the maturity date. c. Bonds issued on the basis of the general credit of the corporation. 3. More than face amount. Because comparable bonds provide a market interest rate (11%...