Indicate How Each Event Affects the Elements of Financial Statements

question 41

Essay

Indicate how each event affects the elements of financial statements.Use the following letters to record your answer in the box shown below each element.Use only one letter for each element.You do not need to enter amounts.

-On December 31,2016,Kirkland Co.paid cash for interest on bonds it had issued on January 1,2016 at 101 ½,and amortized part of the premium on bonds.Indicate the effects of the payment of interest and amortization of the premium.

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Definitions:

Segment Margin

The amount of profit or loss generated by a particular segment of a business, considering only the revenues and costs directly attributable to the segment.

Absorption Costing

A financial recording technique that incorporates all expenses related to production, such as direct materials, direct labor, and variable as well as fixed manufacturing overhead costs, into the product's cost.

Unit Product Cost

The total cost (direct materials, direct labor, and overhead) assigned to a single unit of product.

Segment CM Ratio

The ratio of a business segment's contribution margin to its sales, indicating the profitability and efficiency of that segment.