JE. 6 In 2002 BCo set up an appropriation for an expansion of their building for...
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JE. 6 In 2002 BCo set up an appropriation for an expansion of their building for $500,000. They felt the expansion would take 5 years. Record the a transaction (2 Marks) Particulars At the end of year 1 the expansion was one fifth completed. Record the entry. (2 Marks) Particulars Short-Answer/Calculations [20Marks] SA E 1 Dr Dr Cr Cr The ultimate effect of incurring an expense is to reduce shareholders' equity. The declaration of a cash dividend also reduces shareholders' equity. Explain the difference between an expense and a cash dividend and explain why they have the same effect on shareholders' equity. (4 Marks) JE. 6 In 2002 BCo set up an appropriation for an expansion of their building for $500,000. They felt the expansion would take 5 years. Record the a transaction (2 Marks) Particulars At the end of year 1 the expansion was one fifth completed. Record the entry. (2 Marks) Particulars Short-Answer/Calculations [20Marks] SA E 1 Dr Dr Cr Cr The ultimate effect of incurring an expense is to reduce shareholders' equity. The declaration of a cash dividend also reduces shareholders' equity. Explain the difference between an expense and a cash dividend and explain why they have the same effect on shareholders' equity. (4 Marks)
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