Please show detialed calculations MULTIPLE CHOICE. Choose the one alternative th
ID: 2334540 • Letter: P
Question
Please show detialed calculations MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) If a company is considering the purchase of a parcel of land that was acquired by the 1 seller for $88,000, is offered for sale at $156,000, is assessed for tax purposes at $98,000, is recognized by the purchaser as easily being worth $146,000, and is purchased for $143,000, the land should be recorded in the purchaser's books at: A) $156,000. B) $98,000 C) $143,000. D) $144,500 E$146,000 2) Alpha Company has assets of $620,000, liabilities of $260,000, and equity of $360,000. 2) It buys office equipment on credit for $85,000. What would be the effects of this transaction on the accounting equation? A) Assets decrease by $85,000 and expenses decrease by $85,000. B) Assets increase by $85,000 and liabilities increase by $85,000. C) Assets increase by $85,000 and expenses increase by $85,000. D) Liabilities increase by $85,000 and expenses decrease by $85,000. E) Assets increase by $85,000 and expenses decrease by $85,000. 3) Cage Company had income of $424 million and average invested assets of $2190 3) million. Its return on assets (ROA) is: A) 5.2% B) 39%, C) 19.4%. D) 1.9%. E) 3.9%. q Flitter reported net income of $25,500 for the past year. At the beginning of the year the 4 company had $216,000 in assets and $66,000 in liabilities. By the end of the year, assets C) 9.6%. 5) Charlie's Chocolates' stockholders made investments of $50,000 and received dividends had increased to $316,000 and liabilities were $91,000. Calculate its return on assets: E) 8.1%. A) 26.8%. B) 11.8% D) 35.9%. 5) of $20,000. The company has revenues of $83,000 and expenses of $64,000. Calculate A) S64,000. BS30,000. C $19,000. D) $49,000 E)$83,000. its net income.Explanation / Answer
1) OPTION C: $143,000
The land will be recorded in the purchaser’s book at $143,000, because it is the actual amount paid by the purchaser to the seller for purchasing the asset.
2) OPTION B: Assets increase by $85,000 and liabilities increase by $85,000
Both Assets and Liabilities will be increased. Because the equipment is purchased for credit.
3) OPTION C: 19.4%
Return on assets (ROA) = Net Income/Total Assets
= 424/2190
= 19.4%
4) OPTION E: 8.1%
Return on assets (ROA) = Net Income/Total Assets
= 25500/316000
= 8.1%
5) OPTION C: $19,000
Net Income = Revenue – Expenses
= 83000 – 64000
= $19,000
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