The Analytical Framework Used to Evaluate Transactions Is Reproduced Below

question 80

Essay

The analytical framework used to evaluate transactions is reproduced below:

Using this analytical framework indicate the effect of each of the following transactions for Wisco Corporation:
1.Wisco sold merchandise for $225,000 on account which cost $170,000 to manufacture.
2.Wisco purchased for cash $110,000 of raw material inventory.
3.The company paid $25,000 in advance for an advertising campaign that would be aired next year.
4.Wisco paid its employees $15,000 for the month.
5.The company purchased $7,000 of supplies on account.
6.Wisco issued $25,000 of long-term debt.
7.The company used $10,000 of excess cash to purchase marketable securities.
8.Wisco purchased a machine for $22,000 in cash.
9.At the end of the year Wisco paid dividends of $5,000.
10.At the end of the year the marketable securities that Wisco purchased in transaction 7 were now worth $11,500.
11.Depreciation for the period was $1,500.

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Definitions:

Customer Deposits

Funds placed by customers with a company, often in the context of financial services, which may be used for further transactions or withdrawn later.

Maximize Profits

The objective of optimizing the difference between total revenues and total costs to achieve the highest possible financial gain.

Board of Governors

A leading body of a central banking system, such as the Federal Reserve in the United States, responsible for overseeing the bank's policies and operations.

Appointed

A term referring to individuals who have been selected and assigned roles or positions, often within a governmental or organizational setting, without requiring an election or competitive selection process.