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Question: Describe all of the effects for the current fiscal year Three months after the beginning of the year, the firm purchased a building for...
Describe all of the effects for the current fiscal year
Three months after the beginning of the year, the firm purchased a building for $600 in
cash. The building is going to be the new corporate headquarters. The building has an
estimated useful life of 10 years, and a salvage value of zero. The firm uses the straight-line
method for depreciation.
balance sheet: PP&E 555 depreciation expense 45 accumulated depreciation 45
income statement:
retained earnings portion of the statement of shareholders' equity: NI down 555
CF statement: CF investing activities down 600 CF operating activities depreciation up 45
Five months after the beginning of the year, the firm, which is an insurance company,
collected $120 from its customers for one year worth of insurance premiums. Coverage is
effective immediately.
balance sheet: cash up 120
income statement: revenue up 120
retained earnings portion of the statement of shareholders' equity: NI up 120
CF statement: operating CF up 120
