Indicate How Each Event Affects the Elements of Financial Statements

question 69

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.You do not need to enter amounts.Enter only one letter for each element.

-On December 31,2016,Bates Co.paid $60,000 to the Municipal Bank to pay off the face value of a discount note that Bates had issued a year before.Show the effects of the payment and recognition of 2016 interest on the note.

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Definitions:

Selling and Administrative Expenses

Overhead costs associated with the general operation of a company and the selling of goods or services, not directly tied to production.

Standard Cost

A predetermined cost of manufacturing, servicing, or marketing an item, which is often used for budgeting and performance evaluation.

Income Statement

A financial statement showing a company's revenue and expenses, indicating the net profit or loss over a specific period.

Fixed Manufacturing Overhead

Costs associated with manufacturing that do not vary with the level of production, such as salaries of managers and depreciation of equipment.