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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Mrs. Wallace is going to open a music store with CDs. She has got USD 220 000 from her savings, which she wants to invest into her business and she has also received a bank loan in the amount of USD 40 000. She bought the equipment (USD 80 000), USD 160 000 she spent on the CDs. The space for the shop will be rented and she will pay the rent immediately in the month she uses the space i.e. June rent will be paid in June etc.
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- Part ALinda started the business of buying and selling toys in Oxford on the 1st of October 2020. Sheis preparing accounts to 31st October 2020. She contributed to the business with £8,000 inthe Bank, £5200 cash, and 3,000 Van. The transactions during the month are as follows:2/10 Bought a new Laptop £1000 from a local shop in Oxford and paid by cheque4/10 Purchased toys (goods) £2450 on credit from Toys Ltd5/10 Sold goods for £ 1500 and received the money in Bank12/10 Paid in Cash £80 for repairing laptop18/10 Goods returned to Toys Ltd £10021/10 Received rent for part of the premises by cheque £50023/10 Sold goods to Fred £1900; from this amount £1500 cash received immediately and therest remains on credit.23/10 Sold goods of £500 to David and received cash24/10 Bought a second-hand car from Oxford motor vehicle auction for business use byissuing a cheque £250026/10 Paid the month’s wages to the part-time shopkeeper by cheque £82030/10 Paid rent by cheque £100031/10 Linda has also…arrow_forwardRecord the following transaction in the transaction analysis chart: Shawna Portia bought a new piece of computer equipment for $25,000, paying $6,000 down and charging the rest.arrow_forwardSantana Rey has consulted with her local banker and is considering financing an expansion of her business by obtaining a long-term bank loan. Selected account balances at March 31, 2022, for Business Solutions follow. Total assets $121,568 Total liabilities $862 Total equity $120,706 Required:1. The bank has offered a long-term secured note to Business Solutions. The bank’s loan procedures require that a client’s debt-to-equity ratio not exceed 0.77. As of March 31, 2022, what is the maximum amount that Business Solutions could borrow from this bank? (Round your intermediate calculations to the nearest dollar amount.)2. Assume Business Solutions borrows the maximum amount allowed from the bank. (Round your intermediate dollar values to the nearest whole number and final answers to 1 decimal place.)(a) What percentage of assets would be financed by debt?(b) What percentage of assets would be financed by equity?arrow_forward
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