Cole exchanges an asset (adjusted basis of $15,000; fair market value of $25,000) for another asset (fair market value of $19,000). In addition, he receives cash of $6,000 . If the exchange qualifies as a like-kind exchange, his recognized gain is $6,000 and his adjusted basis for the property received is $21,000 ($15,000 + $6,000 recognized gain)
a. True
b. False
Indicate whether the statement is true or false
False
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For Starbucks and other companies whose business models include a service component, it is not recommended that they use one of the following methods for going global
A) joint ventures B) licensing C) 100-percent ownership D) exporting E) franchising
To ensure that the Allowance for Doubtful Accounts account does not become materially misstated over time, companies revise overestimates of prior periods by:
A. recording a retroactive correcting entry. B. increasing estimates in the current period. C. lowering estimates in the current period. D. notifying the users of its financial statements of the error.
Dorothy borrows $10,000 from the bank. For a four-year loan, the bank requires annual end-of-year payments of $3,223.73. The annual interest rate on the loan is ________.
A) 9 percent B) 10 percent C) 11 percent D) 12 percent
On October 1, 2018, Teton Industries negotiates with its bank to borrow $20,000 cash on a one-year note. The bank charges 5% interest. Interest payments are to be made in two installments, on March 31 and September 30. The principal is to be repaid on September 30, 2019, the maturity date. What journal entry needs to be recorded as of March 31, 2019?
A. Debit Interest Payable $250, debit Interest Expense $250, and credit Cash $500. B. Debit Interest Expense $500 and credit Interest Payable for $500. C. Debit Interest Expense $500 and credit Cash $500. D. Debit Interest Expense $250 and credit Cash for $250.