aries and eros start a partnership with capital contributions of 39000 and 60000 respectivelty over the course of the year aries
1 answer:
Withdrawing cash increases Aries withdrawal account hence debited, decreases cash hence credited.
Option A. is correct.
The explanation for incorrect options is given below.
B. Credit to Aries, capital increases capital account, whereas no capital in contributed it is withdrawn.
C. Credit to Eros, capital increases capital account, whereas no capital in contributed it is withdrawn by another partner.
D. Journal is required
A withdrawal of coins for an owner's private use reduces cash and calls for extra access to a unique drawings account. Because the drawing account is a capital account, it's going to have a debit balance with the purpose to offset a cash pull.
right here coins account will be debited in view that cash is withdrawn for office use, if there might be for personal use then the drawing would be debited but no longer in this example, and right here bank account can be credited given that it is decreasing.
The journal access for coins withdrawn from the financial institution is contra access. coins may be taken from the bank for 2 uses both for personal use (or) business use. I am assuming that money is withdrawn from the financial institution for commercial enterprise use.
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Answer:
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a. B-C ratio = Equivalent annual worth of Benefits / Equivalent annual worth of costs
<u>Alternative A</u>
B-C ratio = Equivalent annual worth of Benefits for alternative A / Equivalent annual worth of costs for alternative A
B-C ratio = (Power Sales + Annual benefits from new industry) / ((Capital cost * Annuity factor(5%,50 years)) + Operating and maintenance costs costs)
B-C ratio = ($1,000,000 + $500,000) / (($20,000,000*(0.05 / (1 - 1.05^(-50))) + $200,000)
B-C ratio = ($1,500,000 / ($1,095,534.71 + $200,000))
B-C ratio = $1,500,000 / $1,295,534.71
B-C ratio = 1.1578
B-C ratio = 1.16
<u>Alternative B</u>
B-C ratio = Equivalent annual worth of Benefits for alternative B / Equivalent annual worth of costs for alternative B
B-C ratio = (Power Sales + Sum of all Annual benefits) / ((Capital cost*Annuity factor (5%,50 years)) + Operating and maintenance costs costs)
B-C ratio = ($800,000 + $600,000 + $400,000 + $200,000 + $100,000) / ($30000000 *(0.05/(1-1.05^(-50))) + $100,000)
B-C ratio = $2,100,000 / ($1,643,302 + $100,000)
B-C ratio = 1.2046
B-C ratio = 1.20
Conclusion: Alternative B should be selected because it has higher B/C ratio.
b Incremental B-C ratio for final pair = (Equivalent Annual Benefits of B - Equivalent Annual Benefits of A) / (Equivalent annual costs of B - Equivalent annual costs of A)
Incremental B-C ratio for final pair = ($2,100,000 - $1,500,000) / ($1,743,302 - $1,295,534.71)
Incremental B-C ratio for final pair = $600,000 / $447,767.29
Incremental B-C ratio for final pair = 1.339982
Incremental B-C ratio for final pair = 1.34
