Answer:
The balance of the account on July 1, 2037 will be $677,846.38.
Explanation:
Since the withdrawals are made the beginning of each month, the relevant formula to use is the formula for calculating the Future Value (FV) of an Annuity Due is employed as follows:
FV = M * (((1 + r)^n - 1) / r) * (1 + r) ................................. (1)
Where,
FV = Future value or the balance of the account on July 1, 2037 =?
M = Monthly withdrawal = $300
r = Monthly interest rate = nominal interest rate / 12 = 10% / 12 = 0.10 / 12 = 0.00833333333333333
n = Number of months from August 1, 2007 to July 1, 2037 = 359
Substituting the values into equation (1), we have:
FV = $300 * (((1 + 0.00833333333333333)^359 - 1) / 0.00833333333333333) * (1 + 0.00833333333333333)
FV = $300 * 2,240.81447087212 * 1.00833333333333333
FV = $677,846.38
Therefore, the balance of the account on July 1, 2037 will be $677,846.38.
On December 31, 2019, Wintergreen, Inc., issued $150,000 of 7 percent, 10-year bonds at a price of 93.25. Wintergreen received $139,875 when it issued the bonds (or $150,000 x .9325). After recording the related entry, Bonds Payable had a balance of $150,000 and Discounts on Bonds Payable had a balance of $10,125. Wintergreen uses the straight-line bond amortization method. The first semiannual interest payment was made on June 30, 2020.
Complete the necessary journal entry for June 30, 2020, by selecting the account names from the drop-down menus and entering the dollar amounts in the debit or credit columns.
Answer:
Dr Bond Interest Expense$5,756
Cr Cash $5,250
Discount on bond payable $506
Explanation:
Preparation of the necessary journal entry for June 30, 2020
Based on the information given the necessary journal entry for June 30, 2020 will be :
Dr Bond Interest Expense$5,756
($5,250 + $506 = $5,756)
Cr Cash $5,250
($150,000 x 7% x 1/2 = $5,250)
Discount on bond payable $506
($10,125/20 interest Periods = $506)
Note that in a situation where a 10-year bonds pay interest semiannually, what we would have will be 20 interest periods
Searls Corporation, a merchandising company, reported the following results for July: Number of units sold 2,700 units Selling price per unit $664 per unit Unit cost of goods sold $405 per unit Variable selling expense per unit $48 per unit Total fixed selling expense $56,500 Variable administrative expense per unit $13 per unit Total fixed administrative expense $118,200 Cost of goods sold is a variable cost in this company. The contribution margin for July is: Group of answer choices $534,600 $699,300 $359,900 $1,453,400
Answer:
$534,600
Explanation:
Contribution margin = Sales - Variable Costs
where :
Sales = 2,700 units x $664 = $1,792,800
Variable Costs = Costs of Goods Sold + Variable Selling Costs + Variable Administrative Cots
= 2,700 units x $405 + 2,700 units x $48 + 2,700 units x $13
= $1,258,200
therefore,
Contribution margin = $1,792,800 - $1,258,200 = $534,600
The ABC Lawn Company aims for a high number of clients that result in high profits. To meet its goal ABC markets its landscaping service vigorously because there are many lawn services and nurseries in the local community. As a sales-oriented company, ABC focuses on _______.
Answer:
Agressive trading technique
Explanation:
A Sales Orientation company is a company that capitalizes or dwell on selling its products and services rather than satisfying their customers wants or needs. Due to the fact that sales orientation business is bent on pushing their product out to the customer it use or employ aggressive techniques in its handling, and this will cost or involves intensive promotions and price- strategy.
Aggressive trading shoulders more risk and thereafter may be accepting a big loss.
Eve Cosmetics Company consists of two departments, Blending and Filling. The Filling Department received 41,400 ounces from the Blending Department. During the period, the Filling Department completed 46,800 ounces, including 7,500 ounces of work in process at the beginning of the period. The ending work in process inventory was 2,100 ounces. How many ounces were started and completed during the period?
Answer:
39,300 ounces
Explanation:
Calculation for How many ounces were started and completed during the period
Using this formula
Numbers of ounces started and completed during the period= Filling Department completed ounces during the period - Work in process at the beginning of the period
Let plug in the formula
Numbers of ounces started and completed during the period=46,800 ounces -7,500 ounces
Numbers of ounces started and completed during the period=39,300 ounces
Therefore How many ounces were started and completed during the period is 39,300 ounces
Below are certain events that took place at Hazzard, Inc., last year: Collected cash from customers. Paid cash to repurchase its own stock. Borrowed money from a creditor. Paid suppliers for inventory purchases. Repaid the principal amount of a debt. Paid interest to lenders. Paid a cash dividend to stockholders. Sold common stock. Loaned money to another entity. Paid taxes to the government. Paid wages and salaries to employees. Purchased equipment with cash. Paid bills to insurers and utility providers. Required: Indicate how each of the transaction would be classified on a statement of cash flows. Place an X in the Operating, Investing, or Financing column as appropriate.
Answer:
Events Operating Investing Financing
a. Paid cash to repurchase its own stock. X
b. Borrowed money from a creditor. X
c. Paid suppliers for inventory purchases. X
d. Repaid the principal amount of a debt. X
e. Paid interest to lenders. X
f. Paid a cash dividend to stockholders. X
g. Sold common stock. X
h. Loaned money to another entity. X
i. Paid taxes to the government. X
j. Paid wages and salaries to employees. X
k. Purchased equipment with cash. X
l. Paid bills to insurers and utility providers. X
Vito is the sole shareholder of Vito, Inc. He is also employed by the corporation. On June 30, 2020, Vito borrowed $8,000 from Vito, Inc., and on July 1, 2021, he borrowed an additional $10,000. Both loans were due on demand. No interest was charged on the loans, and the Federal rate was 4% for all relevant dates. Vito used the money to purchase a boat, and he had $2,500 of investment income. Determine the tax consequences to Vito and Vito, Inc., in each of the following situations.
Answer:
The first loan for $8,000 could fall under the exemption of employer-employee loan. But then after the second is taken, that exemption would no longer apply. A minimum interest of $18,000 x 4% x 6/12 = $360 should be charged.
If the loan is considered a corporation-shareholder loan, then it doesn't qualify for any type of exemption, resulting in interests = ($8,000 x 4% x 6/12) = $160 for 2020
for 2021, interest applied = [($8,000 + $160) x 4%] + ($10,000 x 4% x 6/12) = $326.40 + $360 = $686.40
At December 31, 2017, Ayayai Corporation has the following account balances: Bonds payable, due January 1, 2021$6,500,000 Premium on bonds payable132,000 Interest payable290,000 Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications. (Enter account name only and do not provide descriptive information.)
Answer:
See below
Explanation:
Balance sheet as at December 31, 2017
Current liabilities
Bond interest payable
$290,000
Long term liabilities
Bonds payable
$6,500,000
Less: premium on bonds payable
($132,000)
Net bonds payable
$6,368,000
Marge owns land and a building (held for investment) with an adjusted basis of $75,000 and a fair market value of $250,000. The property is subject to a mortgage of $400,000. Because Marge is in arrears on the mortgage payments, the creditor is willing to accept the property in return for canceling the amount of the mortgage.
a. How can the adjusted basis of the property be less than the amount of the mortgage?
b. If the creditor's offer is accepted, what are the effects on the amount realized, the adjusted basis, and the realized gain or loss for Marge?
c. Does it matter in (b) if the mortgage is recourse or nonrecourse?
Answer:
A. The amount deducted for Depreciation may be higher than the amortized amount of the mortgage principal.
Decrease in the value of the property after they granted the mortgage
Bi $400,000
ii. $75,000
iii. $325,000
C.No
Explanation:
a. The adjusted basis of the property can be tend to be lesser than the amount of the mortgage due to the fact that in the beginning of an asset life the amount that was deducted for Depreciation may be more higher than the amortized amount of the mortgage principal .
Secondly the adjusted basis of the property can be tend to be lesser than the amount of the mortgage when their is Decrease in the value of the property after they granted the mortgage .
Lastly the adjusted basis of the property can be tend to be lesser than the amount of the mortgage when the fair market value of Property are been given instead of the Adjusted basis of the property.
b. Calculation for the effects on the amount realized, the adjusted basis, and the realized gain or loss for
i. Based on the information given the amount that was realized will be the amount of $400,000
ii. Based on the information given the Adjusted basis will be the amount of $75,000
iii. Realized gain=$400,000 − $75,000
Realized gain= $325,000
c.No it don't not matter if the mortgage is recourse or nonrecourse since the amount that was realized was the amount of $400,000 and
to justify the nonrecourse mortgage is that the taxpayer has already enjoy some benefit when the mortgage was acquired due to the increase in Adjusted basis of the property.
E-Wisdom, a publishing company, implements a new business strategy to keep both talent and information within the organization by creating their own content instead of outsourcing it. In the given scenario, which of the following factors has most likely influenced the company's new business strategy?
a. The potential for role ambiguity
b. The potential for data loss
c. The potential for employee burnout
d. The potential for intragroup conflict
Answer:
B: poten of data loss
Explanation:
An Argentinian economist pointed out that the inflation rate based on the PCE(personal consumption expenditures) deflator was higher than the inflation rate you calculated in part (b) based on the GDP deflator. Provide two possible explanations for this difference between the inflation rates calculated from the PCE deflatorversus the GDP deflator.
Answer:
Note: The complete question is attached as picture below
Year Nominal GDP Real GDP
2019 100 100
2020 105 99
a) %change in nominal GDP = [(105 - 100) / 100] * 100 = 5%
%change in real GDP = [(99 - 100) / 100] * 100 = -1%
b) GDP deflator is = [Nominal GDP / Real GDP]. %change in GDP deflator = [(106.06 - 100) / 100] * 100 = 6.06%
c) Inflation calculated from GDP deflator and PCE is different because
- GDP deflator does not includes price increase of imported goods while PCE does.
- PCE measures change in price of goods which are generally consumed by consumers while GDP deflator includes all goods produced in an economy.
Classical economists believe that the producer can produce more of the product at the same price. the economy was never at full employment of resources. the economy is approaching full employment as wages and prices increase. the economy will adjust to at full employment of resources. there are many unemployed resources.
Answer:
the economy will adjust to full employment of resources.
Explanation:
Of course, that was one of the primary views of classical economists such as J.B. Say and Alfred Marshal.
They held that it was possible to do what many modern economists would call the impossible: full employment, One where the economy uses its resources to the full.
Common-size and trend percents for Rustynail Company's sales, cost of goods sold, and expenses follow. Common-Size Percents Trend Percents Current Yr 1 Yr Ago 2 Yrs Ago Current Yr 1 Yr Ago 2 Yrs Ago Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 % Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0 Total expenses 14.3 13.8 14.1 106.1 101.1 100.0 Determine the net income for the following years. Did the net income increase, decrease, or remain unchanged in this three-year period?
Answer:
Rustynail Company
1. The net income for the following years:
Common-Size Percents and Trend Percents
Current 1 Yr 2 Yrs Current 1 Yr 2 Yrs
Yr Ago Ago Yr Ago Ago
Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 %
Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0
Total expenses 14.3 13.8 14.1 106.1 101.1 100.0
Net Income 22.0 24.7 28.5 77.2 86.7 100.0
2. The net income decrease in this three-year period.
Explanation:
a) Data and Calculations:
Common-Size Percents and Trend Percents
Current 1 Yr 2 Yrs Current 1 Yr 2 Yrs
Yr Ago Ago Yr Ago Ago
Sales 100.0 % 100.0 % 100.0 % 104.5 % 103.3 % 100.0 %
Cost of goods sold 63.7 61.5 57.4 116.0 110.7 100.0
Total expenses 14.3 13.8 14.1 106.1 101.1 100.0
Net Income 22.0 24.7 28.5 77.2 86.7 100.0
b) The net incomes for the common-size percents are obtained by deducting the cost of goods sold and the total expenses from sales. The net incomes for the trend percents are obtained by stating the base year as 100% and then calculating the other years. This takes the form of taking the net income for the analysis year/base year's and then multiplying by 100.
Lucas Diving Supplies Company, in its first year of business, had labor costs of $57,000, overhead costs of $88,000, materials purchases of $25,000, and ending Materials and Work-in-Process Inventories of $3,000 and $5,000, respectively. What is the amount of cost of goods manufactured in the first year of operations
Answer:
$162,000
Explanation:
The amount of cost of goods manufactured is computed as
= Labor cost + Direct materials purchased + overhead costs - ending balance of materials - ending balance of work in process
= $57,000 + $25,000 + $88,000 - $3,000 - $5,000
= $162,000
Hence, the cost of goods manufactured is $162,000
Strauch Co. has one class of common stock outstanding and no other securities that are potentially convertible into common stock. During 2024, 100,000 shares of common stock were outstanding. In 2025, two distributions of additional common shares occurred: On April 1, 20,000 shares of treasury stock were sold, and on July 1, a 2-for-1 stock split was issued. Net income was $410,000 in 2025 and $350,000 in 2024. What amounts should Strauch report as earnings per share in its 2025 and 2024 comparative income statements issued early in 2026?
Year 2025 Year 2024
A. $2.34 $3.50
B. $1.78 $3.50
C. $1.78 $1.75
D. $2.34 $1.75
Answer:
C. $1.78 $1.75
Explanation:
Calculation for What amounts should Strauch report as earnings per share in its 2025 and 2024 comparative income statements issued early in 2026
Calculation for What amounts should Strauch report as earnings per share in its 2025
First step is to calculate the Weighted average shares for year 2025
Weighted average shares 2025 = [100,000 + 20,000(9/12)]÷2
Weighted average shares 2025=(100,000+15,000)*2
Weighted average shares 2025=115,000*2
Weighted average shares 2025= 230,000
Now let calculate the Earnings per share for year 2025
2025 Earnings per share for year= $410,000/230,000
2025 Earnings per share for year= $1.78
Therefore the 2025 Earnings per share for year will be $1.78
Calculation for What amounts should Strauch report as earnings per share in its 2024
First step is to calculate the Weighted average shares for year 2024
Weighted average shares 2024= 100,000(2)
Weighted average shares 2024= 200,000
Now let calculate the Earnings per share for year 2024
2024 Earnings per share = $350,000/200,000 2024 Earnings per share= $1.75
Therefore the Earnings per share for year 2024 will be $1.75
Fran Bowen created the following budget: Budget Food $ 364 Clothing $ 164 Transportation 408 Personal expenses and recreation 307 Housing 994 She actually spent $331 for food, $416 for transportation, $1,046 for housing, $161 for clothing, and $259 for personal expenses and recreation. Calculate the variance for each of these categories, and indicate whether it was a deficit or surplus.
Answer:
Fran Bowen
Budget Vs Actual, Variance and Status:
Budget Actual Variance Status
Food $ 364 $331 $33 Surplus
Clothing 164 161 3 Surplus
Transportation 408 416 -8 Deficit
Personal expenses and recreation 307 259 48 Surplus
Housing 994 1,046 -52 Deficit
Total $2,237 $2,213 $24 Surplus
Explanation:
a) Data and Calculations:
Budget Actual Variance Status
Food $ 364 $331 $33 Surplus
Clothing 164 161 3 Surplus
Transportation 408 416 -8 Deficit
Personal expenses and recreation 307 259 48 Surplus
Housing 994 1,046 -52 Deficit
Total $2,237 $2,213 $24 Surplus
b) The difference between the estimated budget cost and the actual cost spent on each item gives rise to either surplus or deficit. This surplus or deficit is described as the variance. It is surplus when the budgeted cost is greater than the actual cost spent. It is deficit when the budgeted cost is less than the actual cost spent.
Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed. If the company's discount rate is 10%, the investment's net present value is closest to (Ignore income taxes.): Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
Answer:
$4,355.26
Explanation:
The net present value is the present value of future cash flows expected from the project minus the initial investment outlay
initial investment outlay=working capital investment = -$10,000
Years 1-5 cash inflow=$2,000
Year 6 cash inflow=normal cash inflows+release of working capital
Year 6 cash inflow=$2,000+$10,000=$12,000
the present value of a future cash flow=cash flow/(1+r)^n
n is 1 for year cash inflow 2 for year 2 cash inflow, 3 for year 3 cash inflow and so on
NPV=-$10,000+$2,000/(1+10%)^1+$2,000/(1+10%)^2+$2,000/(1+10%)^3+$2,000/(1+10%)^4+$2,000/(1+10%)^5+$12,000/(1+10%)^6
NPV=$4,355.26
Binder Corporation agreed to build a warehouse for a client at an agreed contract price of $4,000,000. Expected (and actual) costs for the warehouse follow: 2017, $640,000; 2018, $1,600,000; and 2019, $800,000. The company completed the warehouse in 2019. Compute net income for each year 2017 through 2019 using the cost-to-cost method. a. 2017: $200,000 2018: $520,000 2019: $240,000 b. 2017: $640,000 2018: $1,600,000 2019: $800,000 c. 2017: $0 2018: $0 2019: $960,000 d. 2017: $320,000 2018: $320,000 2019: $320,000
Answer:
The correct option is a. 2017: $200,000 2018: $520,000 2019: $240,000.
Explanation:
The formula for cost to cost method is expected or actual cost incurred to date divided by the total cost of the project or contract.
Therefore, we have:
Total cost = Cost in 2017 + Cost in 2018 + Cost in 2019 = $640,000 + $1,600,000 + $800,000 = $3,040,000
Cost in 2017 contribution to total cost = Cost in 2017 / Total cost = $640,000 / $3,040,000 = 0.21
Cost in 2018 contribution to total cost = Cost in 2018 / Total cost = $1,600,000 / $3,040,000 = 0.53
Cost in 2019 contribution to total cost = Cost in 2019 / Total cost = $800,000 / $3,040,000 = 0.26
Revenue in 2017 = Cost in 2017 contribution to total cost * Contract price = 0.21 * $4,000,000 = $840,000
Revenue in 2018 = Cost in 2018 contribution to total cost * Contract price = 0.53 * $4,000,000 = $2,120,000
Revenue in 2019 = Cost in 2019 contribution to total cost * Contract price = 0.26 * $4,000,000 = $1,040,000
Therefore, net income for each year 2017 through 2019 using the cost-to-cost method can be computed as follows:
Net income for year 2017 = Revenue in 2017 - Cost in 2017 = $840,000 - $640,000 = $200,000
Net income for year 2018 = Revenue in 2018 - Cost in 2018 = $2,120,000 - $1,600,000 = $520,000
Net income for year 2019 = Revenue in 2019 - Cost in 2019 = $1,040,000 - $800,000 = $240,000
Therefore, the correct option is a. 2017: $200,000 2018: $520,000 2019: $240,000.
Answer:
Eet
Explanation:
Check the correct category for each of the following items. Note: for purposes of this exercise, consider cash in and out for this couple regardless of whether the item is for personal or business use. Cash In/Income Cash Out/Expense Cost of business trip State tax liability Clothing purchases Once expenses have been identified, they can be categorized as either fixed expenses or variable expenses. For example, your mortgage would be considered a expense, because . Conversely, grocery bills would be considered , because the actual amount is
Answer:
1. The correct category for each of the following items:
Cash In/Income:
Personal income
Business Income
Cash Out/Expense:
Cost of business trip = variable
State tax liability = fixed
Clothing purchases = variable
2. For example, your mortgage would be considered a fixed expense, because the total amount does not vary. Conversely, grocery bills would be considered variable, because the actual amount is not fixed but varies.
Explanation:
Variable cost or expense has a fixed cost per unit, with the total amount varying, depending on the units or quantities consumed. Fixed cost does have a fixed total amount within the relevant range, but the cost per unit varies.
Sales revenue $944,200 Less: Cost of goods sold 598,100 Gross profit 346,100 Less: Operating expenses (includes depreciation expense and bad debt expense) 248,500 Income from operations 97,600 Other revenues and expenses Gain on sale of investments $14,900 Loss on sale of equipment (2,900 ) 12,000 Income before taxes 109,600 Income taxes 45,200 Net income $64,400 (a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities
Answer:
$500
Explanation:
Net cash flow from operating activities is $500
During Year 3, Rex Co. introduced a new product carrying a 2-year assurance-type warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for year ended December 31, Year 3 and Year 4, are as follows:
Year Sales Actual Warranty Expenditures
2008 $250,000 $2,250
2009 250,000 7,500
Total $500,000 $9,750
What amount should Gum report as estimated warranty liability on its December 31, 2009 balance sheet?
Answer:
the amount that should reported as the estimated liability is $20,250
Explanation:
The computation of the amount that should reported as the estimated liability is as follows:
= Total sales × total percentage - total actual warranty expenditure
= $500,000 × 6% - $9,750
= $30,000 - $9,750
= $20,250
Hence, the amount that should reported as the estimated liability is $20,250
You purchased a 5-year, 6% annual-coupon bond with $1,000 par value. The yield to maturity at the time of purchase was 4%. You sold the bond after one year, right after receiving the first coupon payment. The bond's yield to maturity was 3.4% when you sold it. What is your holding period return on the bond
Answer:
6.12%
Explanation:
the market value of the bond when you purchased it was:
PV of face value = $1,000 / 1.04⁵ = $821.93
PV of coupon payments = $60 x 4.4518 (PV annuity factor, 4%, 5 periods) = $267.11
initial investment = $1,089.04
after 1 year, you receive $60 +
PV of face value = $1,000 / 1.034⁴ = $874.82
PV of coupon payments = $60 x 3.6818 (PV annuity factor, 3.4%, 4 periods) = $220.91
market price = $1,095.73
total holding return = ($1,095.73 + $60 - $1,089.04) / $1,089.04 = 6.12%
Dell is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Dell's flotation expense on the new bonds will be $50 per bond. Dell's marginal tax rate is 35%. What is the pre-tax cost of debt for the newly-issued bonds
Answer:
8.76%
Explanation:
The computation of the pre-tax cost of debt is as follows:
Market price of the bond is
= $1,070 - $50
= $1,020
Coupon payment = Face value × Annual coupon rate
= $1,000 × 9%
= $90
Now YTM would be
Given that
NPER = 15
PMT = $90
PV = $1,020
FV = $1,000
The formula is given below:
=RATE(NPER;PMT;-PV;FV;TYPE)
After applying the above formula, the yield to maturity is 8.76%
Emilio’s accountant told him that if he continues to pay $50 a month on his credit card, it will take him 42 years to pay off his current balance (assuming the interest rate doesn’t change and assuming he doesn’t charge anything else on that card). His credit card interest rate is 18.99%. What is his balance?
Answer:
$3,158.40
Explanation:
The current balance on his credit card is the present value of $50 payable per month over 42-year period as shown below:
PV=monthly payment*(1-(1+r)^-n/r
PV=the unknown
montly paymet=$50
r=monthly interest rate= 18.99%/12=0.015825
n=number of monthly payments=42*12=504
PV=$50*(1-(1+0.015825)^-504/0.015825
PV=$50*(1-(1.015825)^-504/0.015825
PV=$50*(1-0.000365827)/0.015825
PV=$50*0.999634173/0.015825
PV=$3,158.40
The town clerk receives the mail for the Town of Charity, every day. Included in the mail are utility payments, both in cash and check form. The amount of money taken in by the Utility Department is lower than it should be. The Utility Department also takes in checks and cash on a daily basis. No customer has complained that they are not credited for payment of their bill. Different people make the ledger entries in the Utility Department Office. Different people make the bank deposits. How did she commit the fraud
Unclear question. However, I answered based on the case above.
Answer:
by stealing from the utility cash payments
Explanation:
Recall we are told that the utility payments are received in both cash and check form.
Hence, it is possible for the clerk to steal from the cash utility payment rather than the checks because it can easily go unnoticed by customers, or differences may be overlooked by some, and so she was able to commit this fraud.
Mayfair Co. allows select customers to make purchases on credit. Its other customers can use either of two credit cards: Zisa or Access. Zisa deducts a 6.5% service charge for sales on its credit card and credits the bank account of Mayfair immediately when credit card receipts are deposited. Mayfair deposits the Zisa credit card receipts each business day. When customers use Access credit cards, Mayfair accumulates the receipts for several days before submitting them to Access for payment. Access deducts a 5.5% service charge and usually pays within one week of being billed. Mayfair completes the following transactions in June. (The terms of all credit sales are 2/15, n/30, and all sales are recorded at the gross price.)
4 Sold $600 of merchandise (that had cost $300) on credit to Natara Morris.
5 Sold $9,400 of merchandise (that had cost $4,700) to customers who used their Zisa cards.
6 Sold $5,674 of merchandise (that had cost $2,837) to customers who used their Access cards.
8 Sold $4,250 of merchandise (that had cost $2,125) to customers who used their Access cards.
10 Submitted Access card receipts accumulated since June 6 to the credit card company for payment.
13 Wrote off the account of Abigail McKee against the Allowance for Doubtful Accounts. The $473 balance in McKee’s account stemmed from a credit sale in October of last year.
17 Received the amount due from Access.
18 Received Morris’s check in full payment for the purchase of June 4.
Required:
Prepare journal entries to record the preceding transactions and events.
Answer:
4-Jun
Dr Accounts receivable—N. Morris 600
Cr Sales 600
4-Jun
Dr Cost of goods sold 300
Cr Merchandise inventory 300
5-Jun
Dr Cash 8,883
Dr Credit card expense 517
Cr Sales 9,400
5-Jun
Dr Cost of goods sold 4,700
Cr Merchandise inventory 4,700
6-Jun
Dr Accounts receivable—Access 5,560
Dr Credit card expense 113.5
Cr Sales $5,674
6-Jun
Dr Cost of goods sold 2,837
Cr Merchandise inventory 2,837
8-Jun
Dr Accounts receivable—Access 4,165
Dr Credit card expense 85
Cr Sales $4,250
8-Jun
Dr Cost of goods sold $2,125
Cr Merchandise inventory $2,125
10-Jun No journal entry required
13-Jun
Dr Allowance for doubtful accounts 473
Cr Accounts receivable—A. McKee 473
17-Jun
Dr Cash 9,725
Cr Accounts receivable—Access 9,725
18-Jun
Dr Cash 588
Dr Sales discounts 12
Cr Accounts receivable—N. Morris 600
Explanation:
Preparation of the journal entries to record the preceding transactions and events.
4-Jun
DrAccounts receivable—N. Morris 600
Cr Sales 600
4-Jun
Dr Cost of goods sold 300
Cr Merchandise inventory 300
(Being to record Sales on credit)
5-Jun
Dr Cash 8,883
(9,400-517)
Dr Credit card expense 517
(5.5%*9,400)
Cr Sales 9,400
5-Jun
Dr Cost of goods sold 4,700
Cr Merchandise inventory 4,700
6-Jun
Dr Accounts receivable—Access 5,560.5
($5,674-113.5)
Dr Credit card expense 113.5
($5,674*2%)
Cr Sales $5,674
6-Jun
Dr Cost of goods sold 2,837
Cr Merchandise inventory 2,837
8-Jun
Dr Accounts receivable—Access 4,165
($4,250-$85)
Dr Credit card expense 85
(2%*$4,250)
Cr Sales $4,250
8-Jun
Dr Cost of goods sold $2,125
Cr Merchandise inventory $2,125
10-Jun No journal entry required
13-Jun
Dr Allowance for doubtful accounts 473
Cr Accounts receivable—A. McKee 473
17-Jun
Dr Cash 9,725
Cr Accounts receivable—Access 9,725
(5,560+4,165)
18-Jun
Dr Cash 588
(600-12)
Dr Sales discounts 12
(2%*600)
Cr Accounts receivable—N. Morris 600
Joe wants to open a restaurant and feels his best chance of being successful would be to purchase the rights to a well-known restaurant concept. This form of restaurant ownership is known as which of the following?
Food service corporation
Food service franchise
Independent food service operation
Food service chain
Answer:
Food-service franchise
Explanation:
A food-service franchise is a business arrangement where an established and successful restaurant allows the opening of an independent branch under its brand name. The new branch will be similar to the other existing branches in terms of appearance, products and services, operations, and pricing.
For an entrepreneur to open a food service franchise, they need to purchase a license from the franchisor. The franchise license increases the chances of success as customers are already familiar with the brand.
Outline the process the raw ingredients for a single flavor of ice cream might undergo to get to a local grocery’s freezer case.
Answer: fermenting , shredding , pasteurizing
What type of hazard could occur by wearing jewelry while preparing food
Answer:
it can fall into the food
1. Friedman distinguishes between the two concepts that (a) businesses really do act in ways to maximize profit and (b) businesses have a moral responsibility (or, as he puts it, a social responsibility) to act to maximize profit. How does he defend the latter position? (See both the Friedman and Sandbu readings)
Explanation:
Friedman defends the position that companies have a social responsibility to act to maximize profit, in the sense that, the primary function of companies is to generate profit. The author goes against the growing opinions in society that companies must have social responsibility, that is, they need to create a positive and sensitive corporate image to please political and society interests and counter or even soften the words and actions its central purpose, which is profit generation. For him, social responsibility cannot be politicized in order to be an obligation of companies, as it limits freedom and interests arising from the business.
Assume the smart watch industry is a perfectly competitive industry that uses a specialized input. If this industry experiences an increase in demand, we might expect that in the long run: Multiple Choice neither input nor output prices will increase. both input and output prices will increase. only input prices will increase. only output prices will increase.
Answer:
Option B, both input and output prices will increase
Explanation:
Since the demand far smart watches is increasing, the price of watches will escalate to cater the opportunity cost. With the rising demand for smart watch, the demand for specialized input will also increase. Considering the growth in demand for specialized input, its cost shall also escalate to take the benefit of opportunity. Along with raw material, variable costs such as transportation, manpower, electricity etc. will also increase both in input (bringing raw material and producing final product) and output (export of the final product)
In nut shell, both the input and output price will increase.
