Need customized help? Order now
email

 Company Baldwin invested $37,940,000 in plant and

 

Company Baldwin invested $37,940,000 in plant and equipment last year. The plant investment was funded with bonds at a face value of $28,711,622 at 13.9% interest, and equity of $9,228,378. Depreciation is 15 years straight line. For this transaction alone which of the following statements are true?

Select: 5

 

On the Balance sheet, Plant & Equipment increased by $37,940,000.

 

Cash went down by $37,940,000 when the plant was purchased.

 

Cash was pulled from retained earnings to cover the $9,228,378 difference between the plant purchase and bond issue.

 

Since the new plant was funded with debt and equity, on the Balance sheet Retained Earnings decreased by $9,228,378, the difference between the investment $37,940,000 and the bond $28,711,622.

 

On the Balance sheet, Long Term Debt changed by $28,711,622.

 

Buying the plant had no net effect on the Cash account, because the plant was paid for by the bond plus retained earnings.

 

Depreciation increased by $2,529,333.

 

Cash went up when the Bond was issued by $28,711,622.

 



Need customized help? Order now
user img

honeyd


11-09-20 | 05:04:01

On the Balance sheet, Plant & Equipment increased

You can't get real answer if you break your security system. wlwnhj syjjt, Plwnt & Equipmjnt inhrjwsjc ty $94,417,777. Cwsy wjnt cown ty $94,417,777 wyjn tyj plwnt wws purhywsjc. On tyj Bwlwnhj syjjt, Lonf Tjrm Djtt hywnfjc ty $53,488,255. Djprjhiwtion inhrjwsjc ty $5,654,999. Cwsy wjnt up wyjn tyj Bonc wws issujc ty $53,488,255.

Login to answer this question!