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The opening balance in the computer account for Adara Corp for fiscal 2017 was $100,000; t

The opening balance in the computer account for Adara Corp for fiscal 2017 was $100,000; the closing balance was $107,000. The corresponding balances in the accumulated depreciation accounts were $63,000 and $67,500. During the year Adara scrapped a computer originally costing $13,000 having a remaining net book value of $3,500 and purchased a replacement machine for cash.

 

Requirements:

a. Prepare the underlying journal entries to record the foregoing transactions and record events stemming from the transactions (e.g., the accrual of interest at year-end).

b. For each entry identify the cash flow effects, if any, under both the direct and indirect methods of presentation and classify the cash flow according to its nature.

17) On January 1, 2017, Adara acquired equipment under a finance lease. The lease calls for fifteen annual payments of $10,000 due at the beginning of the year. Adara must return the equipment to the lessor at the end of the lease. The January 1, 2017 payment was made as agreed. The implicit rate in the lease is 7%; the present value of the lease payments is $97,455.

 

Requirements:

a. Prepare the underlying journal entries to record the foregoing transactions and record events stemming from the transactions (e.g., the accrual of interest at year-end).

b. For each entry identify the cash flow effects, if any, under both the direct and indirect methods of presentation and classify the cash flow according to its nature.

 

 

18) What is an investing activity?

A) Activities that do not involve cash.

B) Activities involving the acquisition of investments not included in cash equivalents.

C) Activities involving the principal revenue-producing activities of the entity.

D) Activities involving changes in the size and composition of the equity's borrowings.

19) What is a financing activity?

A) Activities involving the acquisition and disposal of long-term assets.

B) Activities involving redemption of the contributed equity of an entity.

C) Activities involving the principal revenue-producing activities of the entity.

D) Activities that do not involve cash.

 

20) What is an operating activity?

A) Activities involving the acquisition and disposal of long-term assets.

B) Activities involving changes in the size and composition of the contributed equity.

C) Activities involving the principal revenue-producing activities of the entity.

D) Activities that do not involve cash.

 

21) What is not a "non-cash" transaction?

A) Exchange of land with another company.

B) Conversion of preferred shares.

C) Payment of cash dividends.

D) Payment of stock dividends.

Dec 14 2019 Read more Less More

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