Determine the Effect of the Following Transactions on the Identified

question 72

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 _____
Total asset turnover ratio _____
Net profit margin ratio _____
Return on assets ratio _____
Transaction 2: Cash was used to pay a current liability.
Net income _____
Total asset turnover ratio _____
Net profit margin ratio _____
Return on assets ratio _____

---

Definitions:

Periodic Payments

Regular, scheduled payments made over a period of time, such as monthly rent or quarterly insurance premiums.

Borrower

An individual or entity that takes funds from a lender under the agreement to return it with interest or equity.

Bond Issue

The process by which a company or government raises funds by selling bonds to investors.

Unamortized Premium

The portion of a bond premium that has not yet been amortized or gradually written off as an expense over the bond's life.