Alpha Company has assets of $638,000, liabilities of $269,000, and equity of $369,000. It buys office equipment on credit for $94,000. What would be the effects of this transaction on the accounting equation? Multiple Choice Assets increase by $94,000 and expenses increase by $94,000. Assets increase by $94,000 and expenses decrease by $94,000. Liabilities increase by $94,000 and expenses decrease by $94,000. Assets decrease by $94,000 and expenses decrease by $94,000. Assets increase by $94,000 and liabilities increase by $94,000.
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- You are considering two possible companies for investment purposes. The following data is available for each company. Additional Information: Company A: Bad debt estimation percentage using the income statement method is 6%, and the balance sheet method is 10%. The $230,000 in Other Expenses includes all company expenses except Bad Debt Expense. Company B: Bad debt estimation percentage using the income statement method is 6.5%, and the balance sheet method is 8%. The $140,000 in Other Expenses includes all company expenses except Bad Debt Expense. A. Compute the number of days sales in receivables ratio for each company for 2019 and interpret the results (round answers to nearest whole number). B. If Company A changed from the income statement method to the balance sheet method for recognizing bad debt estimation, how would that change net income in 2019? Explain (show calculations). C. If Company B changed from the balance sheet method to the income statement method for recognizing bad debt estimation, how would that change net income in 2019? Explain (show calculations). D. What benefits do each company gain by changing their method of bad debt estimation? E. Which company would you invest in and why? Provide supporting details.Alpha Company has assets of $634,000, llabilities of $267,000, and equity of $367,000. It buys office equipment on credit for $92,000. What would be the effects of this transaction on the accounting equation? O Multiple Choice Assets increase by $92,000 and expenses decrease by $92,000. Liabilities increase by $92,000 and expenses decrease by $92,000. Assets increase by $92,000 and expenses increase by $92,000. Assets increase by $92,000 and liabilities increase by $92,000. Assets decrease by $92,000 and expenses decrease by $92,000.Alpha Company has assets of $638,000, liabilities of $269,000, and equity of $369,000. It buys office equipment on credit for $94,000. What would be the effects of this transaction on the accounting equation? Multiple Choice Assets increase by $94,000 and expenses increase by $94,000. Assets increase by $94,000 and expenses decrease by $94,000. Liabilities increase by $94,000 and expenses decrease by $94,000. Assets decrease by $94,000 and expenses decrease by $94,000. Assets increase by $94,000 and liabilities increase by $94,000. MarRook Air
- If a company purchases equipment costing $6,100 on credit, the effect on the accounting equation would be: Multiple Choice Assets increase $6,100 and liabilities increase $6,100. Equity decreases $6,100 and liabilities increase $6,100. One asset increases $6,100 and another asset decreases $6,100. Assets increase $6,100 and liabilities decrease $6,100. Equity increases $6,100 and liabilities decrease $6,100.When a company buys equipment for $156,000 and pays for one third in cash and the other two thirds is financed by a note payable, which of the following are the effects on the accounting equation? Multiple Choice Total assets increase $104,000. Total liabilities increase $156,000. Total liabilities decrease $52,000. Total assets increase $156,000.DTO, Inc., has sales of $18 million, total assets of $16.5 million, and total debt of $9.4 million. Assume the profit margin is 8 percent. a. What is the company's net income? (Do not round intermediate calculations. Enter your answer in dollars not in millions, e.g., 1,234,567.) b. What is the company's ROA? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the company's ROE? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. b. C. % %
- Zion Company has assets of $600,000, liabilities of $250,000, and equity of $350,000. It buys office equipment on credit for $75,000. What would be the effects of this transaction on the accounting equation? Group of answer choices Assets decrease by $75,000 and expenses decrease by $75,000. Liabilities increase by $75,000 and expenses decrease by $75,000. Assets increase by $75,000 and expenses decrease by $75,000. Assets increase by $75,000 and liabilities increase by $75,000.Rick’s Travel Service has asked you to help piece together financial information on the firm for the most current year. Managers give you the following information: sales are $7.5 million, total debt is $3.00 million, debt ratio is 55 percent, and ROE is 17.2 percent. Using the above information, calculate Rick’s ROA. (Round your answer to 2 decimal places.) ROA _________ %Denver, Incorporated, has sales of $13 million, total assets of $11 million, and total debt of $6.4 million. Assume the profit margin is 6 percent. a. What is the company's net income? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.) b. What is the company's ROA? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the company's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Net income b. ROA % c. ROE %
- Calculate Zumwalt’s net profit margin and debt ratio. Earth’s Best Company has sales of $200,000, a net income of $15,000, and the following balance sheet: Cash $ 10,000 Receivables 50,000 Inventories 150,000 Net fixed assets 90,000 Total assets $300,000 ____________________________ Accounts payable 30,000 Other current liabilities 20,000 Long-term debt 50,000 Common equity 200,000 Total liabilities and equity $300,000 The company’s new owner thinks that inventories are excessive and can be lowered to the point where the current ratio is equal to the industry average, 2.5, without affecting either sales or net income. If inventories are sold off and not replaced so as to reduce the current ratio to 2.5, if the funds generated are used to reduce common equity (stock can be repurchased at book value), and if no other changes occur, by how much will the ROE change? Now suppose we wanted to take this problem and modify it for use on an exam—that is, to create a new…The company made a sale of goods for RO. 15000 (cost RO 10000) and received 30% in cash and balance on the account. Which of the following is the correct presentation on the accounting equation? Select one: a. Assets = Liabilities + Owners' Equity -10000 (stock of goods) +12000 (Cash ) = 0 + + 2000 (Profit) b. Assets = Liabilities + Owners' Equity -10000 (stock of goods) +4500 (Cash) + 10500 (Receivables) = 0 + + 5000 (Profit) c. Assets = Liabilities + Owners' Equity -10000 (stock of goods) +12000 (Cash ) = 0 + + 2000 (Profit) d. Assets = Liabilities + Owners' Equity -10000 (stock of goods) +4500 (Cash) = + 11500 (Receivables) + + 3000 (Profit)If a company purchases equipment costing $4,500 on credit, the effect on the accounting equation would be: Multiple Choice One asset increases $4,500 and another asset decreases $4,500. Assets increase $4,500 and liabilities increase $4,500. Equity increases $4,500 and liabilities decrease $4,500. Equity decreases $4,500 and liabilities increase $4,500. Assets increase $4,500 and liabilities decrease $4,500.