Question

explain each please , thank you very much !

ct answer to each question. Show Section B: Select the correct answer working if necessary. 40 points. 1. If total liabilities decreased by ¥45,000 and equity in time, then total assets must change by what amount uity increased by $10,000 during a period of at amount and direction during that same period? ¥55,000 increase b. Y35,000 decrease ¥35,000 increase x45,000 decrease d. 2. Equity is decreased by all of the following except a. issuance of shares. dividends. expenses. net losses. 3. Asian Company purchased land for W92,000,000 in 2003. At December 31, 2020, an appraisal determined the fair value of the land is W106,000,000. The company has an investment in the ordinary shares of another company for which it paid W49,000,000 in 2018. The shares are actively traded on the South Korea Stock Exchange. The fair value of the investment at December 31, 2020 is W63,000,000. The land and investment will be reported on the December 31, 2020 statement of financial position at W92,000,000 and W49,000,000, respectively. W92,000,000 and W63,000,000, respectively. W106,000,000 and W49,000,000, respectively. W106,000,000 and W63,000,000, respectively.

Answer 1

1. At any time both sides of balance sheet must be equal. If there is a decrease in liabilities 45000 and equity increased by 10000 it means on the liabilities side there is net decrease of 35000 so it means there is also a similar decrease in assets side as well. Hence answer is option B.

2. Issuance of shares actually increase the equity amount hence answer is option A.

3. Land will be recorded at W92000000 I. E. Cost value while investment will be recorded at fair value i.e. W63000000. Because we can any time sell shares but selling a land is a time taking task generally it takes time and is subject to fluctuations.

Hence answer is option B.

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