Answer and Explanation:
The Journal entries are prepared below:-
1. Merchandise inventory Dr, $31,500
To Accounts payable $31,500
(Being purchase of inventory on the account is recorded)
2. Merchandise inventory Dr, $635
To Cash $635
(Being cash paid is recorded)
3. Accounts payable Dr, $1,500
To Merchandise inventory $1,500
(Being return inventory is recorded)
4. Accounts payable Dr, $30,000
To Merchandise inventory $900 ($30,000 × 3%)
To Cash $29,100 ($30,000 × 97%)
(Being cash paid is recorded)
b. 1. Accounts receivable Dr, $31,500
To Sales $31,500
(Being sales is recorded)
2. Cost of goods sold Dr, $21,105
To Merchandise inventory $21,105
(Being cost of goods sold is recorded)
3. Sales return and allowances Dr, $1,500
To Accounts receivable $1,500
(Being returns is recorded)
4. Merchandise inventory Dr, $1,005
To cost of goods sold $1,005
(Being returned goods is recorded)
5. Cash Dr, $29,100
Sales discounts Dr, $900
To Accounts receivable $30,000
(Being cash received is recorded)
why is the GDP become the important factors in decision making in the economic policy?
Answer:
see below
Explanation:
GDP is the value of all commodities and services produced within a country's border, in a particular period. Only finished consumer products and services are considered in calculating GDP.
The GDP value is important because
1. GDP reports the state of a country's economy
An increase in GDP indicates growth in the economy. Growth in real GDP value signifies a health economy that creates adequate job opportunities, increasing incomes, and a wealthier nation. A decline in GDP communicates a recession that requires government
intervention.
2. For investment decisions
Investors use GDP as a reference point when making investment decisions. Declining GDP value indicates bad economic conditions, which will result in lower earnings and reduced stock prices. Increasing GDP value is associated with good returns and higher stock prices.
According to a supply and demand model for apples, if the average household income decreases at the same time 10 apple orchards go out of business, one would expect the equilibrium Group of answer choices price of apples to be indeterminate and the equilibrium quantity of apples in the market to increase. quantity of apples in the market to be indeterminate and the equilibrium price of apples to increase. price of apples to increase and the equilibrium quantity of apples in the market to decrease. quantity of apples in the market to decrease and the equilibrium price of apples to stay the same. quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.
Answer:
quantity of apples in the market to decrease and the equilibrium price of apples to be indeterminate.
Explanation:
The decrease in income would reduce the demand for apples because there would be less disposable income available to buy apples. The decrease in demand would lead to a fall in price and quantity
If 10 orchards go out of business. The supply of apples would reduce. This would reduce quantity and increase price.
Taking these two occurrence together, equilibrium quantity would fall and there would be an indeterminate change in equilibrium price
Check the attached image for a graph showing these changes
On January 4, Year 1, Barber Company purchased 12,500 shares of Convell Company for $150,000 plus a broker's fee of $4,000. Convell Company has a total of 62,500 shares of common stock outstanding and it is presumed the Barber Company will have a significant influence over Convell. During each of the next two years, Convell declared and paid cash dividends of $0.75 per share, and its net income was $117,000 and $112,000 for Year 1 and Year 2, respectively. The January 12, Year 3, entry to record Barber's sale of 7,500 shares of Convell Company stock, which represents 60% of Barber's total investment, for $101,250 cash should be:
Answer:
Debit Cash $101,250; debit loss on sale of Investment $7,380;credit Long -term Investments $108,630
Explanation:
The journal entry is shown below:
Before that the following calculations could be done
Ownership Percentage 20%
($12,500 ÷ $62,500)
Investment cost $154,000
$150,000 + $4,000
Add: Share of Year 1 net income $23,400
$117,000 × 20%
Add: Share of Year 2 net income $22,400
$112,000 × 20%
Less: Dividends for Year 1 -$9,375
12,500 × 0.75
Less: Dividends for Year 2 -$9,375
12,500 × 0.75
Carrying value of Investment $181,050
The Journal entry is shown below:-
Cash Dr, 101,250
Loss on sale of Investment Dr, $7,380
To Long -Term Investments $108,630 (181050 × 60%)
A company makes bicycles. It produces 850 bicycles a month. It buys the tires for bicycles from a supplier at a cost of Rs.60 per tire. The company’s inventory carrying cost is estimated to be 15% of cost and the ordering is Rs.90 per order. Compute EOQ.
A: 639 tires
B: 522 tires
C: 580 tires
D: 621 tires
From the information given in the question above , Calculate number of orders to be made per year.
A: 35 orders
B: 39 orders
C: 37 orders
D: 32 orders
Answer:
B: 522 tires
B: 39 orders
Explanation:
a. Calculation for EOQ
First step is to Calculate the Annual Demand which is D
D = Annual demand = (2 tires per bicycle) x (850 bicycles per month) x (12 months in a year)
D=20,400 tires
Second step the ordering cost is given in the question which is :
S = Ordering cost = 90 per order
Third step is to Calculate the carrying cost which is H
H = carrying cost = (15%) x ($60 per unit)
H= $ 13.50 per unit per year
Last step is to Calculate the EOQ
EOQ = √{ (2 x 20,400 x $90) / $13.50
EOQ= 522 tires
Therefore the EOQ is 522 tires which means that the company should order 522 tires each time they places an order.
b. Calculation for the number of orders per year
Using this formula
Number of orders per year = D / Q
Let plug in the formula
Number of orders per year = 20,400 / 522
Number of orders per year = 39 orders per year
Therefore the Number of orders per year will be
39 orders per year.
Several factors affect a firm’s need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm’s need for external capital—that is, its AFN (additional funds needed). Check all that apply. The firm increases its dividend payout ratio. The firm’s inventory turnover decreases, with no effect on the sales forecast. The firm previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity. Dividends to common shareholders are paid out of after-tax earnings. Do these payouts affect a firm’s AFN? No, dividends do not affect a firm’s AFN, because they are paid out of after-tax earnings. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Answer:
1.
The firm increases its dividend payout ratio.This will increase the need for external funds because with more funds going towards dividends, there will be less funds available to fund operations. The company will therefore be more probable of being in need of Additional funds.
The firm’s inventory turnover decreases, with no effect on the sales forecast.If the firm's inventory turnover increases, it means that the firm is taking longer to sell off inventory. This will mean that the company will have to invest more in working capital to maintain these inventory levels. This will lead to a higher probability of them needing additional funds.
2. Yes, dividends still affect a firm’s AFN even though they are paid out of after-tax earnings.
Even though they are paid after-tax, they still eat into the funds that the business can be able to set aside to fund operations. So when dividends are paid, the need for AFN increases as well.
Why might you want to avoid the use of acronyms and emoticons in business communication
Well because if you used emoticons in a professional business communication, then they would probably see you as untrustworthy or lazy and they would most likely go to somebody else who is more professional.
Here are data on two stocks, both of which have discount rates of 18%: Stock A Stock B Return on equity 18 % 15 % Earnings per share $ 4.60 $ 2.90 Dividends per share $ 2.30 $ 2.30 a. What are the dividend payout ratios for each firm? (Enter your answers as a percent rounded to 2 decimal places.) b. What are the expected dividend growth rates for each stock? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. What is the proper stock price for each firm? (Do not round intermediate calculations. Round your answers to 2 decimal places.)
Answer:
a. What are the dividend payout ratios for each firm?
payout ratio stock A = $2.30 / $4.60 = 0.5 = 50%payout ratio stock B = $2.30 / $2.90 = 0.7931 = 79.31%b. What are the expected dividend growth rates for each stock?
growth rate stock A = 0.18 x (1 - 50%) = 0.09 = 9%growth rate stock B = 0.15 x (1 - 79.31%) = 0.031035 = 3.10%c. What is the proper stock price for each firm?
stock A's proper price = $2.507 / (0.18 - 0.09) = $27.86stock B's proper price = $2.3713 / (0.18 - 0.031) = $15.91Explanation:
dividend payout ratio = dividend / EPS
growth rate = ROE x (1 - dividend payout ratio)
P₀ = Div₁ / (Re - g)
Computing Depreciation, Net Book Value, and Gain or Loss on Asset Sale
Lynch Company owns and operates a delivery van that originally cost $46,400. Lynch has recorded straight-line depreciation on the van for four years, calculated assuming a $5,000 expected salvage value at the end of its estimated six-year useful life. Depreciation was last recorded at the end of the fourth year, at which time Lynch disposes of this van.
A. Compute the net book value of the van on the disposal date.
B. Compute the gain or loss on sale of the van if the disposal proceeds are:
1. A cash amount equal to the van's net book value.
2. $22, 500 cash.
3. $18, 500 cash.
Answer and Explanation:
The computation is shown below:
A. The net book value is
Before that the depreciation expense is
Depreciation per year is
= (Purchase Cost - Residual value) ÷ (Useful life)
= ($46,400 - $5,000) ÷ (6)
= $6,900
Now
A. The Netbook value as on disposal date is
= $46,400 - ($6,900 × 4 years)
= $18,800
B. The gain or loss on the sale of the van is
1. The equivalent amount i.e. gain is $18,800
2. The gain is
= $22,500 - $18,800
= $3,700
3. The loss is
= $18,500 - $18,800
= -$300
CAN SOMEONE HELP ME PLEASE WITH THE PICTURE ABOVE
Answer:
B
Explanation:
It will start expansion
A restaurant prepares 200.00 pizza slices and sells them at a rate of $12.00/slice. Expenses for the restaurant include raw material for pizza at $5.00 per slice, $103.00 for monthly rental and monthly insurance of $30.00. Lost sale are taken as $6.00 per unhappy customer. Leftover pizza can be sold for $2.00. The restaurant is open only for 25 days in a month. Today there was a party at nearby office so the demand for pizza went up to 223.00 slices. How much profit could the restaurant earn today?
Answer:
$1428
Explanation:
Profit = Total Revenue - total cost
total revenue = price x quantity sold
total cost = variable cost + fixed cost
total revenue = 223 x $12 = $2676
Variable cost = $5 x 223 = $1115
total fixed cost = $103.00 + $30.00 = $133.00.
Total cost = $1115 + $133 = $1248
profit = $2676 - $1248 = $1428
1. What is the ending balance in the accounts listed below given the following transactions: a. RWV borrows $1,100,000 in the form of a note payable. b. RWV purchases land for $250,000. c. RWV builds a building for $750,000. d. RWV orders $7,500 worth of food, which will be paid for later. e. RWV provides services worth $95,000, and will bill for the services later. f. RWV pays salaries to employees totaling $45,000. g. RWV pays $7,500 towards the food it previously ordered. h. RWV uses $5,000 worth of food. i. RWV pays $17,000 of G
Answer:
RWVEnding Account Balances:Account Details Debit Credit
Notes Payable $1,100,000
Cash $30,500
Land 250,000
Building 750,000
Supplies (Food) 2,500
Accounts Receivable 95,000
Service Revenue 95,000
Salaries Expense 45,000
Supplies (Food) Exp. 5,000
G 17,000
Totals $1,195,000 $1,195,000
Explanation:
a) Notes Payable
Account Details Debit Credit
Cash $1,100,000
a) Cash Account
Account Details Debit Credit
Notes Payable $1,100,000
Land (b) $250,000
Building (c) 750,000
Salaries (f) 45,000
Supplies (Food) (g) 7,500
G (i) 17,000
Balance c/d $30,500
b) Land
Account Details Debit Credit
Cash $250,000
c) Building
Account Details Debit Credit
Cash $750,000
d) Supplies (Food)
Account Details Debit Credit
Accounts Payable $7,500
Supplies (Food) Expense (h) $5,000
Balance c/d $2,500
Accounts Payable
Account Details Debit Credit
Supplies (d) $7,500
Cash (g) $7,500
e) Accounts Receivable
Account Details Debit Credit
Service Revenue $95,000
Service Revenue
Account Details Debit Credit
Accounts Receivable (e) $95,000
f) Salaries Expense
Account Details Debit Credit
Cash $45,000
h) Supplies (Food) Expense
Account Details Debit Credit
Supplies (Food) $5,000
i) G
Account Details Debit Credit
Cash $17,000
A municipality is considering an investment in a small renewable energy power plant with the following parameters. The cost is $360,000, and the output averages 50 kW year-round. The price paid for electricity at the plant gate is $0.039/kWh. The investment is to be evaluated over a 25-year time horizon, and the expected salvage value at the end of the project is $20,000. The MARR is 6%.Calculate the NPV of this investment. Is it financially attractive? Calculate the operating credit per kWh which the government would need to give to the investment in order to make it break even financially. Express your answer to the nearest 1/1000th of dollars
Answer:
this project is not financially attractive because the NPV is negative (-$136,974.74)operating credit per kWh = $0.0245Explanation:
initial investment = $360,000
yearly cash flows 1 - 24 = 50 x $0.039 x 24 hours x 365 days = $17,082
yearly cash flow year 25 = $17,082 + $20,000 = $37,082
using a financial calculator, the present value of the yearly cash flows = $223,025.26
this project's NPV = -$360,000 + $223,025.26 = -$136,974.74
in order for this project to be profitable, NCFs should be:
$360,000 - ($20,000 / 1.06²⁵) = $355,340.03
annual earnings = $355,340.03 / 12.783 (PV annuity factor, 6%, 25 periods) = $27,797.86
total kWh = 50 x 24 x 365 = 438,000
$27,797.86 / 438,000 = $0.063465 per kWh
operating credit = $0.063465 - $0.039 = $0.0245
You have $25.36 in your account. You make deposits of $36 and $78 and make a withdrawal of $61.24. How much is in the account?
Answer:
78.12
Explanation:
A random telephone survey of 1021 adults (aged 18 and older) was conducted by Opinion Research Corporation on behalf of CompleteTax, an online tax preparation and e-filing service. The survey results showed that 684 of those surveyed planned to file their taxes electronically.
a. Develop a descriptive statistic that can be used to estimate the percentage of all taxpayers who file electronically.
b. The survey reported that the most frequently used method for preparing the tax return was to hire an accountant or professional tax preparer. If 60% of the people surveyed had their tax return prepared this way, how many people used an accountant or profes-sional tax preparer
Answer:
a) 67% of filers surveyed plans to file their taxes electronically.
b) 613 people will use the professionals to prepare their taxes.
Explanation:
Given that;
survey shows 684 of 1021 people would most likely file electronically.
a)
to estimate the percentage of all taxpayers who file electronically, we say;
(684 / 1021) * 100% = 0.6699 = 0.67
therefore 67% of filers surveyed plans to file their taxes electronically.
b)
Given that 60% ( 0.6 ) said they would us professionals, now to find how many people did it this way, we say;
( 60 / 100) * 1021 = 612.6 = 613 (we are talking about number of person)
so 613 people will use the professionals to prepare their taxes.
You manage a risky portfolio with an expected rate of return of 22% and a standard deviation of 34%. The T-bill rate is 6%. Your risky portfolio includes the following investments in the given proportions: Stock A 31 % Stock B 36 % Stock C 33 % Suppose that your client decides to invest in your portfolio a proportion y of the total investment budget so that the overall portfolio will have an expected rate of return of 18%. a. What is the proportion y? (Round your answer to the nearest whole number.) b. What are your client’s investment proportions in your three stocks and the T-bill fund? (Do not round intermediate calculations. Round your answers to 2 decimal places.) c. What is the standard deviation of the rate of return on your client’s portfolio? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Answer and Explanation:
A.
E(r) = y x R(rp) + (1-y)*rf
0.18 = y * 0.22+(1-y)*0.06
0.18 = 0.22y +0.06 -0.06y
Collect like terms
0.18-0.06 = 0.22y - 0.06y
0.12 = 0.16y
y = 0.12/0.16
= 0.75
= 75%
B.
Stock a = 31% x 0.75
= 0.2325
= 23.25%
Stock b = 36% * 0.75
= 0.27%
Stock c = 33% * 0.75
= 0.2475
= 24.75%
A total of all these stocks gives 100 percent
C.
We have standard deviation = 34%
Y * standard deviation
= 0.75 * 0.34
= 0.255
= 25.5%
The Wod Chemical Company produces a chemical compound that is used as a lawn fertilizer. The compound can be produced at a rate of 10,000 pounds per day. Annual demand for the compound is 0.6 million pounds per year. The fixed cost of setting up for a production run of the chemical is $1,500, and the variable cost of production is $3.50 per pound. The company uses an interest rate of 22 percent to account for the cost of capital, and the costs of storage and handling of the chemical amount to 12 percent of the value. Assume that there are 250 working days in a year.
A. What is the optimal size of the production run for this particular compound?
B. What proportion of each production cycle consists of uptime and what proportion consists of downtime?
C. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?
Answer:
A. What is the optimal size of the production run for this particular compound?
first we have to determine the holding cost per unit = h = (22% + 012%) x ($3.5) = $1.19 per unit, per year
then we have to calculate the modified holding cost per year = h' = h x [1 / (D/P)] = $1.19 x [1 / (600,000/2,500,000)] = $0.9044 per unit, per year
now we have to substitute h for h' in the EOQ formula:
Q' = √ [(2 x S x D) / h'] = √ [(2 x $1,500 x 600,000) / $0.9044] = 44,612.44 ≈ 44,612 units
B. What proportion of each production cycle consists of uptime and what proportion consists of downtime?
Time between production runs = Q' / D = 44,612 / 600,000 = 0.07435333
Uptime = Q' / P = 44,612 / 2,500,000 = 0.0178448
Downtime = total time - uptime = 0.07435333 - 0.0178448 = 0.05650853
uptime = 0.0178448 / 0.07435333 = 24% of total time
downtime = 0.05650853 / 0.07435333 = 76% of total time
C. What is the average annual cost of holding and setup attributed to this item? If the compound sells for $3.90 per pound, what is the annual profit the company is realizing from this item?
average annual holding cost and setup costs = (AD/Q') + (h'Q'/2) = [($1,500 x 600,000) / 44,612] + [($0.9044 x 44,612) / 2] = $40,144
profit per unit = $3.90 - $3.50 = $0.40 per pound
total annual profit = ($0.40 x 600,000) - $40,144 = $199,856
Dewey Corp. is expected to have an EBIT of $2.45 million next year. Depreciation, the increase in net working capital, and capital spending are expected to be $180,000, $85,000, and $185,000, respectively. All are expected to grow at 18 percent per year for four years. The company currently has $13 million in debt and 800,000 shares outstanding. The company’s WACC is 9.1 percent and the tax rate is 21 percent. You decide to calculate the terminal value of the company with the price-sales ratio. You believe that Year 5 sales will be $27.4 million and the appropriate price-sales ratio is 1.9. What is your estimate of the current share price?
Answer:
$41.13
Explanation:
The current share price can be calculated by first deducting the debt from the firm value then divide the equity value by the number of shares outstanding. To calculate the firm value first we need to calculate the free cash flows and after calculating free cashflows we will multiply them with the Compan's WACC to reach the present value of each free cash flow
DATA
EBIT = 2.45m
WACC = 9.1%
Tax rate = 21%
Debt = 13m
Outstanding shares = 800,000
NOTE: Calculations are attached in attachments
Kyle is a seventeen-years-old minor who has just graduated from high school. He is attending a university two hundred miles from home and has contracted to rent an apartment near the university for one year at $500 per month. He is working at a convenience store to earn enough income to be self-supporting. After living in the apartment and paying monthly rent for four months, he becomes involved in a dispute with is landlord. Kyle, still a minor, moves out and returns the key to the landlord. The landlord wants to hold Kyle liable for the balance of the payments due under the lease. Discuss fully Kyle’s liability in this situation.
Answer:
kyle does not owe the landlord any liability since the contract is void.
Explanation:
To answer this question i would first explain what disaffirmance means. the term means that to express oneself in a way which shows that they are no longer liable to certain bindings to a contract. A minor is someone who is considered to be younger than 18 years of age. Minors do not have certain rights and obligations and these includes certain civil and political obligations. As a minor kylie has no legal rights to enter a contract with the landlord. The law is protective of people of his age from certain ntypes of responsibilities due to their young age which makes them incapable of handling such. Apart from sports a minor cannot enter into a contract. also we have in this scenario that kyle returned the keys to the landlord and by this action he has shown that he is not bound by any contract with the landlord. since he paid his rent for the period of 4 months, the contract was disaffirmed when he took the keys back to the landlord.
The future of work is characterized by (choose all that apply):
a.
Staying at the same job for your entire career.
b.
Working with international colleagues.
c.
Repetitive jobs.
d.
Multiple career changes.
Answer:
B
Explanation:
You want a good impression with people and you also need people to help you along the way
Appendix 1: Gross and net methods for sales discounts
The following were selected from among the transactions completed by Strong Retail Group during August of the current year:
Aug. 5. Sold merchandise on account to M. Quinn, $7,500, terms 2/10, n/30. The
cost of the merchandise sold was $4,200.
9. Sold merchandise on account to R. Busch., $4,000, terms 1/10, n/30. The
cost of the merchandise sold was $2,100.
15. Received payment on account for the sale of August 5 less the discount.
20. Sold merchandise on account to S. Mooney, $6,000, terms n/eom. The
cost of the merchandise sold was $3,300.
25. Received payment on account for the sale of August 9. 31.Received
payment on account for the sale of August 20.
A. Journalize the August transactions using the gross method of recording sales discounts.
Aug. 5 Accounts Receivable-M. Quinn 7,500
Sales 7,500
Cost of Goods Sold 4,200
Inventory 4,200
Accounts Receivable-R. Busch 4,000
Sales 4,000
Cost of Goods Sold 2,100
B. Journalize the August transactions using the net method of recording sales discounts.
Answer:
A. Journal Entries under Gross Method
Date Account Titles and Explanation Debit Credit
Aug. 5 Accounts Receivable M. Quinn $7,500
Sales Revenue $7,500
(To record the sales made on account)
Cost of Goods Sold $4,200
Inventory $4,200
(To record the cost of goods sold)
Aug. 9 Accounts Receivable R. Busch $4,000
Sales Revenue $4,000
(To record the sales made on account)
Cost of Goods Sold $2,100
Inventory $2,100
(To record the cost of goods sold)
Aug. 15 Cash $7,350
($7,500 - $150)
Sales Discounts $150
($7,500*2/100)
Accounts Receivable M. Quinn $7,500
(To record the payment received for credit sales with discount)
Aug. 20 Accounts Receivable S. Mooney $6,000
Sales Revenue $6,000
(To record the sales made on account)
Cost of Goods Sold $3,300
Inventory $3,300
(To record the cost of goods sold)
Aug. 25 Cash $4,000
Accounts Receivable R. Busch $4,000
(To record the payment received for credit sales without discount)
Aug. 31 Cash $6,000
Accounts Receivable S. Mooney $6,000
(To record the payment received for credit sales with no discount)
B. Journal Entries under Net Method
Date Account Titles and Explanation Debit Credit
Aug. 5 Accounts Receivable M. Quinn $7,350
($7,500 - [$7,500*2/100])
Sales Revenue $7,350
(To record the sales made on account)
Cost of Goods Sold $4,200
Inventory $4,200
(To record the cost of goods sold)
Aug. 9 Accounts Receivable R. Busch $3,960
($4,000 - [$4,000*1/100])
Sales Revenue $3,960
(To record the sales made on account)
Cost of Goods Sold $2,100
Inventory $2,100
(To record the cost of goods sold)
Aug. 15 Cash $7,350
Accounts Receivable M. Quinn $7,350
(To record the payment received for credit sales with discount)
Aug. 20 Accounts Receivable S. Mooney $6,000
Sales Revenue $6,000
(To record the sales made on account)
Cost of Goods Sold $3,300
Inventory $3,300
(To record the cost of goods sold)
Aug. 25 Cash $4,000
($3,960 + $40)
Accounts Receivable R. Busch $3,960
Sales Discount Forfeited $40
($4,000*1/100)
(To record the payment received for credit sales without discount)
Aug. 31 Cash $6,000
Accounts Receivable S. Mooney $6,000
(To record the payment received for credit sales with no discount)
Difference between piecemeal and time related salary
can someone help me with the picture above please. if your right i’ll give you the extra points
Boilermaker House Painting Company incurs the following transactions for September:
1. Paint houses in the current month for $11,000 on account.
2. Purchase painting equipment for $12,000 cash.
3. Purchase office supplies on account for $1,700.
4. Pay workers' salaries of $2,400 for the current month
5. Purchase advertising to appear in the current month for $1,200 caslh
6. Pay office rent of $3,600 for the current month.
7. Receive $6,000 from customers in (1) above.
8. Receive cash of $4,200 in advance from a customer who plans to have his house painted in the following month.
Required:
1. Prepare journal entries for the above transactions.
2. Post each transaction to T-accounts and calculate the ending balances.
At the beginning of September, the company had the following account balances:
Cash $17,100
Accounts Receivable 800
Supplies 320
Equipment 5,600
Accounts Payable 700
Common Stock 16,000
Retained Earnings 7,120.
All other accounts had a beginning balance of zero.
3. Prepare a trial balance.
Answer:
1) Dr Accounts receivable 11,000
Cr Service revenue 11,000
2) Dr Equipment 12,000
Cr Cash 12,000
3) Dr Supplies 1,700
Cr Accounts payable 1,700
4) Dr Wages expense 2,400
Cr Cash 2,400
5) Dr Advertising expense 1,200
Cr Cash 1,200
6) Dr Rent expense 3,600
Cr Cash 3,600
7) Dr Cash 6,000
Cr Accounts receivable 6,000
8) Dr cash 4,200
Cr Deferred revenue 4,200
Cash Accounts receivable
debit credit debit credit
17,100 800
12,000 11,000
2,400 6,000
1,200 5,800
3,600
6,000
4,200
8,100
Supplies Equipment
debit credit debit credit
320 5,600
1,700 12,000
2,020 17,600
Accounts payable Deferred revenue
debit credit debit credit
700 4,200
1,700
2,400
Common stock Retained earnings
debit credit debit credit
16,000 7,120
Service revenue Rent expense
debit credit debit credit
11,000 3,600
Wages expense Advertising expense
debit credit debit credit
2,400 1,200
Boilermaker House Painting Company
Trial Balance
For the month ended September 30, 202x
debit credit
Cash $8,100
Accounts Receivable $5,800
Supplies $2,020
Equipment $17,600
Accounts Payable $2,400
Deferred revenue $4,200
Common Stock $16,000
Retained Earnings $7,120
Service revenue $11,000
Rent expense $3,600
Wages expense $2,400
Advertising expense $1,200
Totals $40,720 $40,720
E3-18 Comparing cash and accrual basis accounting and applying the revenue recognition principle Momentous Occasions is a photography business that shoots videos at college parties. The freshman class pays $1,000 in advance on March 3 to guarantee services for its party to be held on April 2. The sophomore class promises a minimum of $2,800 for filming its formal dance and actually pays cash of $4,100 on February 28 at the dance. Answer the following questions about the correct way to account for revenue under the accrual basis:
a. Considering the $1,000 paid by the freshman class, on what date was revenue recognized? Diod the recognition occur on the same date cash was received?
b. Considering the $4,100 paid by the sophomore class, on what date was revenue recognized'? Did the recognition occur on the same date cash was received?
Answer:
Momentous Occasions
a. Revenue of $1,000 is recognized on April 2, though the cash receipt is recorded on March 3 as deferred revenue. This means that the recognition occurred on a separate date from when the cash was received.
b. Revenue of $4,100 will be recognized on the date the party is held and not on the February 28 date when the cash was received. This means that the recognition occurred on a separate date from when the cash was received.
Explanation:
Momentous Occasions is required to recognize revenue on the date the service is performed and not when the cash is received in accordance with the accrual concept, unless it chooses to use the cash basis as a small business.
Outdoor Expo provides guided fishing tours. The company charges $300 per person but offers a 20% discount to parties of four or more. Consider the following transactions during the month of May.
May 2 Charlene books a fishing tour with Outdoor Expo for herself and four friends at the group discount price ($1,200 = $240 × 5). The tour is scheduled for May 7.
May 7 The fishing tour occurs. Outdoor Expo asks that payment be made within 30 days of the tour and offers a 6% discount for payment within 15 days.
May 9 Charlene is upset that no one caught a single fish and asks management for a discount. Outdoor Expo has a strict policy of no discounts related to number of fish caught.
May 15 Upon deeper investigation, management of Outdoor Expo discovers that Charlene’s tour was led by a new guide who did not take the group to some of the better fishing spots. In concession, management offers a sales allowance of 30% of the amount due.
May 20 Charlene pays for the tour after deducting the sales allowance.
Required:
a. Record the necessary transaction(s) for Outdoor Expo on each date.
b. Calculate net revenues.
c. Show how Outdoor Expo would present net revenues in its income statement.
Answer:
May 2 No entry is required as the transaction is yet to happen
May 7 DR Accounts Receivable $1,200
CR Tour Revenue $1,200
May 9 DR No entry required
May 15 DR Sales Allowance (1,200 * 30%) $360
CR Accounts Receivable $360
May 20 DR Cash $789.60
DR Sales Discount $50.40
CR Accounts Receivable $840
Working
Accounts Receivable = 1,200 - 360 sales allowance = $840
Sales Discount = 840 * 6% discount = $50.40
Cash = 840 - 50.40 = $789.60
b. Net Revenues
= Revenue - Sales allowance - Sales discount
= 1,200 - 360 - 50.40
= $789,60
c. Partial Income Statement
Tour Revenues $1,200
Less:
Sales Allowance $360
Sales Discount $50.60
($410.60)
Net Tour Revenue $789.40
The net revenue for Outdoor Expo will be $789.60.
How to calculate net revenueThe necessary transactions for Outdoor Expo on each date will be:
May 2 No entry
May 7 Debit Account receivable $1200
Credit Tour revenue $1200
May 9 No entry
May 15.
Debit Sales revenue $360
Credit Sales revenue $360
May 20
Debit Cash $789.60
Credit Sales discount $50.40
Credit Account receivable $840
The net revenue will be calculated as:
= Revenue - Sales - Sales discount
= 1200 - 360 - 50.40
= $789.60
Learn more about revenue on:
https://brainly.com/question/25623677
Compile a job advertisement for a receptionist vacancy
Answer:
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Why should investors know the difference between nominal and real interest rates?
O to know what they are likely to lose
O to understand changes in monetary policy
to guarantee an investment's profitability
O to recognize the effects of inflation
Answer:
to recognize the effects of inflation
Explanation:
The nominal rate of interest is the interest earned before adjusting for inflation. The nominal interest rate is simple to recognize and calculate. It is the rate quoted on loans, deposits, bonds, and mutual funds. The nominal rate communicates to the investor the percentage of returns to expect from their investment. The higher the percentage, the better the returns. However, nominal interest does not take account of inflation.
Inflation erode the purchasing power of money. A high inflation rate will mean that any investment gains may not benefit the investor as the currency will have weakened. The real interest rate considers inflation rates. It tells the investor the actual gain from an investment after adjusting for inflation.
Answer:
To recognize the effects inflation.
Explanation: This is the correct answer on edg 2020 (just took the quiz) ^-^
Decision Point: How Can You Help the Sales Team Better Understand the Commission Plan? You remember from your discussion with Sean that, "Many members of the sales team don’t seem to understand the commission system, and many see it as unfair." You study the existing commission plan and don’t see anything as inherently unfair, but you have your suspicions as to who might think it unfair. You speak to a number of sales personnel and discover that it is the newer salespeople who see the commission plan as unfair. Commission rates for sales personnel who have been employed by Swazzi for less than two years are lower than for employees who have been at Swazzi for longer than two years. Newer employees believe they put as much effort into each sale as longer-tenured employees and should be rewarded the same. Using expectancy theory, what would you do to address this problem? Select an option from the choices below and click Submit.
Question Completion with Options:
*Re-evaluate the existing commission plan to determine whether you can eliminate the perception of unfairness. Re-evaluate the base salaries by comparing them to other upscale clothing stores.
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
*Travel to the stores and explain the system in detail to the sales teams. Tell them you will try to clear up any perceived unfairness once you see whether they are serious about selling
Answer:
*Put all salespeople on the same commission plan regardless of tenure. This will clearly establish a strong relationship between performance and reward for all sales personnel. Increase the base salaries of longer-tenured salespeople who have worked for Swazzi more than two years to reinforce the relationship between their experience/loyalty and their rewards.
Explanation:
Longer-term sales personnel should be rewarded differently from newer personnel. But, this differential reward should not be based on the sales commission. The base salary will be more ideal for this tenure reward. This will be in line with the Expectancy Theory which states that employees base their individual levels of effort on what is necessary to perform well and earn rewards within the workplace. The theory also requires that the reward structure is clear with well-defined goals and routine evaluations. The Expectancy Theory helps workers to put in their best because they are looking forward to some well-defined and clear rewards.
If Ford Motor Company builds a new auto plant in South Africa this is considered to be
Group of options omitted and they are
a) brownfield investment only
b) brownfield and horizontal investment
c) greenfield and horizontal investment
d) greenfield and vertical investmen
Answer:c) greenfield and horizontal investment
Explanation:
A green-field investment is foreign direct investment whereby a parent company establishes a new subsidiary in a different or foreign country, starting its operations from the scratch, ie building the establishment from ground up and not buying an already existing plant or structure..
By horizontal direct investment , it means that the investor establishes the same type of operation in a different country as it operates in its home country, for example, Ford Motor Company based in the United States building a new auto plant in South Africa.
7. Which of the following is not a way to accumulate wealth?
A Getting a mortgage and making monthly payments on your home
B Being sure to save money each month
C Only saving money when you have a chance
D Using a compound interest account for your savings
being sure to save money each month