Operating losses incurred during the start-up years of a new business should be
a. accounted for and reported like the operating losses of any other business.
b. written off directly against retained earnings.
c. capitalized as a deferred charge and amortized over five years.
d. capitalized as an intangible asset and amortized over a period not to exceed 20 years.
Answer: a. accounted for and reported like the operating losses of any other business.
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Mr. T invested $20,000 in cash into his business. This transaction would
a. increase assets and decrease owner's equity; b. decrease assets and increase owner's equity; c. decrease assets and decrease liabilities; d. increase assets and increase owner's equity; e. none of these
______ advantage exists when an entrepreneur is able to offer a product or service with unique customer value before competitors do so.
a. First to market b. First-mover c. Market-leader d. Innovator
On April 1, Year 1, Raines Co. purchased and placed a plant asset in service. The following information is available regarding the plant asset: Acquisition cost $130,000Estimated salvage value$15,000Estimated useful life 5 yearsMake the necessary adjusting journal entries at December 31, Year 1, and December 31, Year 2 to record depreciation for each year under the double-declining balance depreciation method:
What will be an ideal response?
[The following information applies to the questions displayed below.]On January 1, Year 1, Jing Company purchased office equipment that cost $34,000 cash. The equipment was delivered under terms FOB shipping point, and transportation cost was $2,000. The equipment had a five-year useful life and a $12,000 expected salvage value.Assume that Jing Company earned $30,000 cash revenue and incurred $19,000 in cash expenses in Year 3. The company uses the straight-line method. The office equipment was sold on December 31, Year 3 for $16,000. What is the company's net income (loss) for Year 3?
A. $6,600 B. $600 C. $5,400 D. ($6,600)