Encryption Connection is buying the first computer for its new server farm. Suppose the company paid...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image](https://dsd5zvtm8ll6.cloudfront.net/si.experts.images/questions/2023/04/642a9c286e679_088642a9c2855357.jpg)
Transcribed Image Text:
Encryption Connection is buying the first computer for its new server farm. Suppose the company paid $5,000 for this computer, which it expects to last for three years. Describe how the company would account for the $5,000 expenditure under (a) the cash basis and (b) the accrual basis. Which basis is more realistic for this situation? a How would the company would account for the $5,000 expenditure under the cash basis? Cash Basis b. How would the company would account for the $5,000 expenditure under the accrual basis? Accrual Basis Amount The unrealistic Amount basis is more realistic because the computer is an asset. The computer should be amortized over its useful life. To record the cost of the computer as an expense is Encryption Connection is buying the first computer for its new server farm. Suppose the company paid $5,000 for this computer, which it expects to last for three years. Describe how the company would account for the $5,000 expenditure under (a) the cash basis and (b) the accrual basis. Which basis is more realistic for this situation? a How would the company would account for the $5,000 expenditure under the cash basis? Cash Basis b. How would the company would account for the $5,000 expenditure under the accrual basis? Accrual Basis Amount The unrealistic Amount basis is more realistic because the computer is an asset. The computer should be amortized over its useful life. To record the cost of the computer as an expense is
Expert Answer:
Answer rating: 100% (QA)
The question presents a scenario where Encryption Connection is purchasing a computer for its new se... View the full answer
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala
Posted Date:
Students also viewed these accounting questions
-
Read the case study "Southwest Airlines," found in Part 2 of your textbook. Review the "Guide to Case Analysis" found on pp. CA1 - CA11 of your textbook. (This guide follows the last case in the...
-
would have a wider selection of tapes and could operate more efficiently than the few small video rental stores located in and around her hometown of Mystic, Connecticut. Williams knew that more than...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
The profit before tax as reflected in the draft statement of comprehensive income of Sword Limited for the financial years ended 31 December 2020 and 31 December 2021 respectively was as follows:...
-
How are ions created for each of the mass spectra in Figure 21-4? Why are the two spectra so different? Figure 21-4 141 156 157 100 100 H .N. MH* 227 Electron Chemical ionization ionization NH 50 50...
-
Answer is B how do I do it? 6. A corporation is considering two alternative projects. Project A requires an initial investment of 1,000,000 at time 0 and is expected to generate returns of 200,000...
-
14. The undiscounted risk-neutral expected stock price equals the forward price.We will verify this using the binomial tree in Figure 4. a. Using S = $100, r = 0.08, and = 0, what are the 4-month,...
-
The following balances appear on the books of Sarah Simon Enterprises: Retained Earnings, $ 26,100; Dividends, $ 8,500; Service Revenue, $ 23,700; Salaries Expense, $ 6,100; Rent Expense, $ 4,000;...
-
The term book value has several uses. It can refer to a single asset or the company as a whole. When referring to an individual asset, such as a piece of equipment, book value refers to the asset's...
-
Consider the following relations for a mini world of credit). COMPANY. Answer all queries in the language asked for (alternate language gets no EMPLOYEE (FName, LName, SSN, Bdate, Address, Sex,...
-
Because of the large fixed cost of running pipes to everyone's home, natural gas is locally provided by a natural monopoly. Suppose demand is Q = 240 2 P and marginal revenue is M R = 120 Q . Suppose...
-
For the data in Problem 42, how would you predict demand for medical kits using (a) moving averages and (b) exponential smoothing (with alpha values equal to 0.5 and greater) for the 21st week? Data...
-
For a light ray that crosses the interface between medium 1 having index of refraction \(n_{1}\) and medium 2 having index of refraction \(n_{2}\), what relationship between \(\theta_{1}\) and...
-
The atmosphere of the planet Venus is almost entirely composed of carbon dioxide (about 96.5 % carbon dioxide). The carbon dioxide on Venus might be in equilibrium with carbonate ions in minerals on...
-
Seniority quantum numbers typically measure how many fermions are in some sense "not paired" with another fermion. For the quasispin model of Problem 31.3 , define the Racah seniority $v$ through...
-
(a) Place a perfectly conducting sphere with radius a in a uniform electric field E 0 and let an origin centered electric dipole field represent the field produced by the sphere. Use this information...
-
+ Ch 9 Homework Assignment Part 1 Question 3 of 3
-
Outline a general process applicable to most control situations. Using this, explain how you would develop a system to control home delivery staff at a local pizza shop.
-
What is the distinction, as drawn by the GASB, between a duciary fund and a permanent fund?
-
Discuss the nancial and nonnancial measures that are important in evaluating the scal wherewithal of health care organizations.
-
The City of Allentown recently received a donation of two items: 1. A letter written in 1820 from James Allen, the towns founder, in which he sets forth his plan for the towns development....
-
3. A city government holds a six-year capital lease for property being used within the General Fund. Minimum lease payments total $70,000 starting next year but have a current present value ot...
-
6.Acity creates a solid waste landfill. It assesses every person or company that uses the landfill a charge based on the amount of materials contributed. In which of the following will the landfill...
-
4. A city government has a nine-year capital lease for property being used within the General Fund. The lease was signed on January 1,2008. Minimum lease payments total $90,000 starting at the end of...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App