Determine the Effect of the Following Transactions on the Identified

question 74

Essay

Determine the effect of the following transactions on the identified financial statement components and ratios. Code your answers as follows:
A: If the transaction results in an increase in the financial statement component or ratio.
B: If the transaction results in a decrease in the financial statement component or ratio.
C. If the transaction does not affect the financial statement component or ratio.
Transaction 1: A company acquired land by signing a long-term note payable.
Property, plant, and equipment_____
Asset turnover ratio_____
Net profit margin ratio_____
Return on assets ratio_____
Transaction 2: Cash was used to pay a current liability.
Net income_____
Asset turnover ratio_____
Net profit margin ratio_____
Return on assets ratio_____

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Definitions:

The National Post

A Canadian English-language national newspaper based in Toronto, covering a wide range of topics including news, current affairs, and editorial content.

Spot Trade

A financial transaction for immediate delivery of the traded asset.

Exchange Rate

The value of one currency for the purpose of conversion to another, facilitating international trade and finance by determining how much one currency is worth in terms of the other.

Forward Rate

An agreed upon rate for a financial transaction that will occur at a future date.