ACC 230 - hw 7b - it might be too costly for the company to...

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Aaron New ACC 230 – Chapter 6 - Homework 7 June 15, 2010 Q6-1) Investing, Financing and Operation Q6-2)Investing activities is classified as 1) purchasing assets for use in the business, and 2) making investments in such items as stocks and bonds. Therefore, for a resale of an asset, it would fall under the category of operating activities as operating activities includes 1) selling products or services, 2) buying inventory for resale, and 3) incurring and paying for necessary expenses associated with the primary activities of a business. Q6-4)Those interpretation are most of the time hard to justify and therefore, it is also one of the most common way a company can use to manipulate their financial statements. Q6-8) The small amount is not huge enough to affect the operating expense of the company and
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Unformatted text preview: it might be too costly for the company to go after the small amount than what the company could actually receive from it. PE6-3) PE6-4) Date Description Dr Cr Jan 01 Cash 2080 Accounts Receivable 1760 Sales Revenue 3840 Jan 02 Cash 1760 Accounts Receivable 1760 PE6-5)(1) Date Description Dr Cr Jan 06 Cash 1584 Cash discount 176 Accounts receivable 1760 (2) Jan 21 Cash 1760 Accounts Receivable 1760 PE6-6) Jan 03 Sales Return and Allowance 640 Accounts Receivable 640 PE6-7) Net sales = 25000000-200000-75000-50000 = $2,175,000 PE6-21) Reconciliation of the bank statement with cash balance on the books: 33000-21300+11200-250+110= $ 22760 Error in book: 23040-22760 = $ 280 There is an error of $280 in the book. Overstated value $280....
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