Analyze the Effect of the Following Transactions Using the Basic

question 60

Essay

Analyze the effect of the following transactions using the basic accounting equation and the format provided below.
i. Bought land with an estimated fair value of $150,000 by issuing 100,000 shares.
ii. Issued 10,000 common shares for $15,000 cash
iii. Purchased a 2-year insurance policy for $4,800 .
iv. Paid rent of $3,000
v. Bought equipment for $50 ,000. Paid 20% down in cash and the balance on a 5-year, 6% note
payable.
vi. Purchased $9 ,000 of merchandise inventory on credit.
vii. Paid utilities bill for $750.
viii. Sold $8,000 of merchandise inventory for $16, 000 cash.
ix. Paid $2,500 on merchandise inventory previously purchased.
x. Declared a $1,000 dividend.
xi. Recognized that 1 month of the insurance coverage had expired.

FORMAT:

Analyze the impact of technological advances on a firm's production costs and market prices.

Explain the significance of price-taking firms not minimizing costs in their production decisions.

Understand the economic implications of firms exiting an industry due to decreased demand.

Explain how and why the marginal cost curve is relevant to production decisions.

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Definitions:

Clean Up Your Room

Typically advice or a directive aimed at organizing and tidying one's living space, emphasizing cleanliness and order.

Parental Divorce

The legal dissolution of marriage between two parents, which can significantly impact the emotional, social, and financial stability of children.

Emotional Support

Psychological and emotional assistance provided to someone to help them cope with stress, problems, or difficulties in their life, emphasizing understanding, empathy, and care.

Noncustodial Parent

The parent who does not have primary physical custody of a child but may have rights to visitation and involvement in the child's life.