Answer:
a. Identification as direct, indirect, or semi-indirect organizational patterns:
Direct organizational pattern
b. Putting sentences in order for a paragraph using an indirect organizational pattern:
Due to projected second quarter revenue shortfalls, the CEO has decided to take precautionary measures to protect the long-term viability of the company.
A mandatory staff furlough will be instituted July 1–6 of this year.
After considering cost-saving proposals, such as eliminating the internal Parts Shipping division and tertiary quality control measures, the executive team determined that staff furloughs would have the least impact on company morale.
Explanation:
Organizational paragraph patterns refer to how paragraphs are organized in order to deliver intended messages. The direct organizational pattern delivers the bad news first before giving reasons, and then closes on a positive note. The indirect pattern starts with a buffer, the reasons, then delivers the bad news, before finally closing on a positive note. The semi-indirect pattern is a mixture of the two.
Millie withdraws $1,000 from her checking account so she can have $1,000 in cash. If no other changes occur, M1 will
Answer:
M1 will not change
Explanation:
M1 is the money supply that is composed of physical currency , coin, demand deposits, travellers' checks, checking accounts, and negotiable order of withdrawal (NOW) accounts. M1 includes the most liquid of money supply.
Because checking account and cash are both components of M1, there would be no change in M1
Historically the stock market goes up when there is bad news on unemployment. The latest statistics show the unemployment rate is skyrocketing so this could be a good time to buy stocks.
The arguments target is:
A. Bad news on unemployment
B. The stock market in the past when there is bad news on unemployment
C. The stock market now
Answer: C. The stock market now
Explanation:
The Argument target refers to the subject of the discussion in question. The speaker in question is attempting to explain why it would be a good time to buy stocks in the present which concerns the stock market today making it the subject.
The speaker does this by calling into evidence, the correlations between variables in the past and showing that with one variable ( high unemployment) currently in effect, the other variable (increasing stock prices) which it correlates with therefore has a chance of happening in the present.
Kenneth Arrow discussed two important situations in which profit maximization can be socially inefficient. One of these occurs when
Answer:
Explanation:
One of these occurs when costs are not paid for, as in pollution, the other is when there is an imbalance of knowledge between buyer and seller. Pollution can be a consequence that cannot be solved with money and can also be socially irresponsible for a company. On the other hand, an imbalance of knowledge can prevent a company from profit maximization if the seller does not understand the product or services that the buyer is selling.
Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $1,200,000 with a $300,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages of $180,000 per year. In addition, the equipment will have operating and energy costs of $7,500 per year.
Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
Answer:
Average rate of return = 11%
Explanation:
Depreciation = (Cost of equipment - Residual value) / Useful years
Depreciation = (1,200,000-300,000) / 10
Depreciation = 90,000
Increase in net annual income = 180,000 - 90,000 - 7,500
Increase in net annual income = 82,500
Average investment = (1,200,000 + 300,000) / 2 = 750,000
Average rate of return = Increase in net annual income / Average investment
Average rate of return = 82,500/750,000
Average rate of return = 0.11
Average rate of return = 11%
A subcontractor is responsible for outfitting six satellites that will be used for solar research. Four of the six have been completed in a total of 600 hours. If the crew has a 75% learning curve, how long should it take them to finish the last two units?
Answer: ∑Tₓ = 201.222
time required to complete the last two units is 201.222 minutes
Explanation:
Given that,
total time required to four units is 600 hours,
Learning curve applied is 75% and from the learning curve coefficient table, total time factor to complete four units at 75% learning curve is 2.946
so
∑Tₙ = T₁ × total time factor
{ ∑Tₙ is total time required to complete all the units which is 600 hrs, T₁ is Time for first unit, total time factor = 2.946 }
we substitute
∑T₄ = ∑T₁ × total time factor
600 = ∑T₁ × 2.946
∑T₁ = 600/2.946
∑T₁ = 203.666 minutes
Now to get the total time required to complete 6 units, we say:
∑T₆ = ∑T₁ × total time factor
Note that total time factor at this point changes;
( from the learning curve coefficient table, total time factor to complete 6 units at 75% learning curve is 3.934)
so we substitute
∑T₆ = 203.666 × 3.934
∑T₆ = 801.222
Now to find how long should it take them to finish the last two units, we say
∑Tₓ = ∑T₆ - ∑T₄
∑Tₓ = 801.222 - 600
∑Tₓ = 201.222
Therefore time required to complete the last two units is 201.222 minutes
The time required to complete the last two units is 201.222 minutes
Given data
Total time required to four units is 600 hours
Learning curve applied is 75% and 75% learning curve is 2.946
∑Tₙ = T₁ × total time factor
{ ∑Tₙ is total time required to complete all the units which is 600 hrs, T₁ is Time for first unit, total time factor = 2.946 }
we substitute
∑T₄ = ∑T₁ × total time factor
600 = ∑T₁ × 2.946
∑T₁ = 600/2.946
∑T₁ = 203.666 minutes
Now to get the total time required to complete 6 units, we say:
∑T₆ = ∑T₁ × total time factor
so we substitute
∑T₆ = 203.666 × 3.934
∑T₆ = 801.222
Now, we will find how long should it take them to finish the last two units
∑Tₓ = ∑T₆ - ∑T₄
∑Tₓ = 801.222 - 600
∑Tₓ = 201.222
In conclusion, the time required to complete the last two units is 201.222 minutes
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Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income 30,000 46,000 Net annual cash inflow 110,000 146,000 Estimated useful life 5 years 6 years Salvage value -0- -0- The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.890 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 "The net present value for Project Nuts" is Group of answer choices
Answer:
NPV = $35,868.06
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV for Project Nuts
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-600,000
Cash flow each year from year 1 to 6 = 146,000
I = 10%
NPV = $35,868.06
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $1,000,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 190,000 $ 125,000 Property, plant, equip. (net) 650,000 765,000 Liabilities 255,000 255,000 Lake would record goodwill of
Answer:
Lake would record goodwill of $365,000
Explanation:
Fair value of net assets = Fair value of current asset + Fair value of property, plant and equipment
Fair value of net assets = $125,000 + $765,000
Fair value of net assets = $890,000
Fair market value = Fair value of net assets - Liabilities assumed
Fair market value = $890,000 - 255,000
Fair market value = $635,000
Goodwill = Consideration - Fair market value
= $1,000,000 - $635,000
= $365,000
Hence, the amount of goodwill is $365,000.
Selling, general, and administrative expenses were $160,600; net sales were $730,000; interest expense was $17,500; research and development expenses were $76,650; net cash provided by operating activities was $193,800; income tax expense was $16,360; cost of goods sold was $401,500. Required: a. Calculate operating income for the period.
Answer:
OPERATING INCOME $91,250
NET INCOME $57,390
Explanation:
a. Calculation for operating income for the period.
Net sales $730,000
Less: Cost of goods sold ($401,500)
Gross profit $328,500
Less Selling, general, and administrative expenses ($160,600)
Less: Research and development expenses ($76,650)
OPERATING INCOME $91,250
b. calculation for the net income for the period.
Net sales $730,000
Less: Cost of goods sold ($401,500)
Gross profit $328,500
Less Selling, general, and administrative expenses ($160,600)
Less: Research and development expenses ($76,650)
OPERATING INCOME $91,250
Less: Interest expense ($17,500)
Less: Tax expense ($16,360)
NET INCOME $57,390
Therefore the OPERATING INCOME will be $91,250 while the NET INCOME will be $57,390
changed its estimates to a total useful life of 5 years with a salvage value of $81000. What is 2021 depreciation expense?
Answer: $162,000
Explanation:
The depreciation expense for the first 3 years up till 2021 is;
= (Cost - Salvage value)/Useful life
= ( 579,000 - 57,000) / 9
= $58,000
In 2021, the Net book value was;
= 579,000 - ( 58,000 * 3)
= 579,000 - 174,000
= $405,000
Useful life has been changed to 5 years. 3 years have already elapsed left with 2.
New salvage value is $81,000.
= (NBV - Salvage Value) / Useful life
= (405,000 - 81,000) / 2
= $162,000
Sarah takes out a loan today for $26,000 at an interest rate of 2 percent a year. She plans to repay the loan after 5 years. How much will he have to pay?
Sarah will have to pay:__________
Answer:
$28,706.10
Explanation:
The computation of the amount of pay is shown below:
Here we have to find the future value by using the following formula
Future value = Present value × (1 + interest rate)^number of years
= $26,000 × (1 + 0.02)^5
= $28,706.10
We simply applied the above formula so that the amount of pay could be come and the same is to be considered
In the liquidation of a partnership, any gain or loss on the realization of non-cash assets should be allocated:_____.
a. first to creditors and the remainder to partners.
b. to the partners on the basis of their capital balances.
c. only after all creditors have been paid.
d. to the partners on the basis of their income-sharing ratio.
Answer:
D. To the partners on the basis of their income-sharing ratio.
Explanation:
Partnership liquidation can be easily seen to come into existence indefinitely through periodic changes within the ownership, they are seen to occur by circumstances which are totally uncommon occurrence.
The form of the dissolution is irrelevant, whether by absenting by personal decision of individual member or wholesale departure and formal liquidation. The end result will be the same. The primary dream of these harmonious and synchronical growth of the firm will be seen to come to an end.
This is why it is best shared to the partners on the basis of their income sharing ratio.
Next week, Mortimer is preparing to go to work for the Illinois department of Child Services. He was surprised when his friends told him that he was going to have to pay one percent of his salary to the union that represents the unionized workers that would include Mortimer, whether he joined the union or not - a so-called agency fee to prevent 'free riders'. This was for services provided to Mortimer, including collective bargaining and grievance representation. Mortimer was shocked - no one had told him about this! What advice would you provide to Mortimer?
Answer:
The implication is that the Illinois Department of Child Services is a unionized workplace.
Mortimer will derive better benefits that surpass the costs of membership. He is covered in all collective bargains, even when he resigns his union membership. Unions negotiate for better working conditions, higher pays, and improved benefits.
When Mortimer has any grievance against the department, the union will also represent him, thereby making his life easier since unions can negotiate better with employers than individual workers.
Mortimer is even lucky to find a job at a unionized workplace because the jobs are not usually advertised as union members easily bring in their relatives and friends to occupy such vacancies.
Explanation:
Most of the disadvantages that Mortimer should complain about unions are disadvantages to the employer and not to him as an individual worker. For the employer, the union acts as a form of monopoly that can decide whether the workers would work or not. The unionized workers are not easy to replace with other workers.
Select the correct answer.
What does a production possibilities curve represent?
ОА.
a combination of price and demand of goods and services
B.
a combination of the goods produced before and after a change in a factor of production
Ос.
a combination of two factors of production used to produce a single good or service
OD
a combination of two goods that can be produced using limited resources
The statement that describes what a production possibility curve represent is: D.
What is Production Possibility Curve?Production possibility curve can be described as that which shows the quantity of two products that can possibly be produced if both products are to depend on the same resources for production to occur.The image attached below shows a typical production possibility curve.Therefore, the statement that describes what a production possibility curve represent is: D.
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Company X was expected to have earnings per share of $0.52 for the upcoming quarter. On the day of the results, the company reported earnings per share of $0.83. What happened to the share price when the stock market opened?
Answer:
Rise in stock price.
Explanation:
In general, the stock price has increased because the expected earning was $0.52 per share but the actual earnings were $0.83. therefore, we can say that stock prices have increased. moreover, there are other factors that may affect the stock price. But in this case. A positive surprise in the earnings per share results in stock price going up.
On the first day of the fiscal year, a company issues a $8,800,000, 7%, 10-year bond that pays semiannual interest of $308,000 ($8,800,000 × 7% × ½), receiving cash of $7,655,303. Required:Journalize the first interest payment and the amortization of the related bond discount.
Answer and Explanation:
The journal entry is shown below:
Interest expense $403,391
To Cash $308,000
To Discount on note payable $95,391
{($8,800,000 - $7,655,303) ÷ 12}
Here we debited the interest expense as it increased the expenses and credited the cash as it decreased the assets and credited the discount on note payable
Orbit Services, Inc. pays $ 760 ,000 to acquire 30% (200,000 shares) of the voting stock of State Investments, Inc. on January 5, 2019. State Investments, Inc. declares and pays a cash dividend of $ 1.40 per share on June 14, 2019. What is the correct journal entry for the transaction on June 14, 2019?
Answer:
since Orbit's investment represents a significant influence (more than 20%) on State, we have to use the equity method for accounting for investments in other companies.
the journal entry to record the initial investment:
January 5, 2019, investment in State Investments, Inc.
Dr Investment in State Investments, Inc., 760,000
Cr Cash 760,000
When we use the equity method, cash dividends decrease the carrying value of our investments:
June 14, 2019, cash dividend received from State Investments, Inc.
Dr Cash 280,000
Cr Investment in State Investments, Inc., 280,000
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,600 helmets, using 2,664 kilograms of plastic. The plastic cost the company $20,246. According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,600 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,600 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answer and Explanation:
The computation is shown below;
1. The Standard quantity of kilogram for making 3,600 helmets is
= Number of helmets × number of kilograms required
= 3,600 × 0.65
= 2,340
2. The standard material cost is
= Standard quantity × standard price
= 2,340 × $8
= $18,720
3. Material spending variance is
= Plastic cost - standard material cost
= $20,246 - $18,720
= $1,526 unfavorable
4. The material price and quantity varaince is
Price variance
= Plastic cost - (number of plastic × cost)
= $20,246 - (2,664 × $8)
= $1,066 favorable
Quantity variance
= Standard Cost × (Actual quantity - standard quantity)
= $8 × (2,664 - 2,340)
= $2,592 unfavorable
"In the long-run, monopolistically competitive firms: have excess capacity. produce at the minimum of average total cost. charge prices equal to marginal cost. both B and C are true."
Answer:
The correct answer is the option D: Both B and C are true.
Explanation:
To begin with, a monopolistically competitive firms is the one that produces in a market in where the other companies sell a pretty similar but different product and there are a lot of buyers so the most important way to difference themself is by the publicity or the identification of the brand in the mind of the consumers. Moreover, in this type of market in the long-run equilibrium the price if equal to the marginal cost and also to the minimun of the average total cost so therefore that it is said that there are zero economic profit
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity:
Date Cash Effective Decrease in Outstanding
interest interest balance balance
1/1/2021 $207,020
6/30/2021 $7,000 $6,211 $789 206,230
12/31/2021 7,000 6,187 813 205,417
6/30/2022 7,000 6,163 837 204,580
12/31/2022 7,000 6,137 863 203,717
6/30/2023 7,000 6,112 888 202,829
12/31/2023 7,000 6,085 915 201,913
6/30/2024 7,000 6,057 943 200,971
12/31/2024 7,000 6,029 971 200,000
What is the annual stated interest rate on the bonds?
a. 3.5%
b. 6%
c. 7%
d. none of the above
Answer:
c. 7%
Explanation:
According to the given scenario, the computation of the annual stated interest rate on the bonds is shown below:-
Sated interest Rate = Cash interest ÷ Face Value of the bond × 2
= $7,000÷ $200,000 × 2
= 7%
Therefore for computing the annual stated interest rate on the bonds we simply applied the above formula. hence the correct option is c
Tennessee Corporation is analyzing a capital expenditure that will involve a cash outlay of $109,332. Estimated cash flows are expected to be $36,000 annually for 4 years. The present value factors for an annuity of $1 for 4 years at interest of 10%, 12%, 14%, and 15% are 3.170, 3.037, 2.914, and 2.855, respectively. The internal rate of return for this investment is a.9% b.3% c.10% d.12%
Answer:
D
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-109,332
Cash flow each year from year 1 to 4 = $36,000
IRR = 12%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
g A company's most recent balance sheet reported total assets of $1.9 million, total liabilities of $0.8 million, and total equity of $1.1 million. Its Debt to equity ratio is: Group of answer choices
Answer:
0.73
Explanation:
Debt to equity ratio is calculated as Total debt / Total equity
= $0.8 million / $1.1 million
= 0.73
Therefore, debt to equity ratio is 0.73
O'Mally Department Stores is considering two possible expansion plans. One proposal involves opening 5 stores in Indiana at the cost of $1,810,000. Under the other proposal, the company would focus on Kentucky and open 6 stores at a cost of $2,000,000. The following information is available: Indiana proposal Kentucky proposal Required investment $1,810,000 $2,000,000 Estimated life 6 years 6 years Estimated residual value $80,000 $40,000 Estimated annual cash inflows over the next 10 years $700,000 $800,000 Required rate of return 13% 13% The accounting rate of return for the Indiana proposal is closest to (Round any intermediary calculations to the nearest dollar, and round your final answer to the nearest hundredth of a percent, X.XX%.)
Answer:
O'Mally Department Stores
The accounting rate of return for the Indiana proposal is closest to 24.28%
Explanation:
a) Data and Calculations:
Indiana proposal Kentucky proposal
Required investment $1,810,000 $2,000,000
Estimated life 6 years 6 years
Estimated residual value $80,000 $40,000
Estimated depreciable cost $1,730,000 $1,960,000
Average depreciable cost $288,333 $326,667
Estimated annual cash inflows
over the next 10 years $700,000 $800,000
Average cash inflows $70,000 $80,000
Required rate of return 13% 13%
Accounting rate of return = Average cash inflows/Average depreciable cost x 100 = $70,000/$288,333 x 100 = 24.28%
The Indiana proposal of O'Mally Department Stores' accounting rate of return is the ratio of estimated accounting profit to the average investment cost. The estimated accounting profit is equivalent to the average cash inflow and the average investment cost is equivalent to the average depreciable cost.
Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $ 380,000
Working capital required $ 120,000
Annual net cash receipts $ 135,000
Cost to construct new roads in year three $ 44,000
Salvage value of equipment in four years $ 69,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.
The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company’s required rate of return is 18%.
Required:
Determine the net present value of the proposed mining project. (Any cash outflows should be indicated by a minus sign.
Answer:
The net present value of the proposed mining project is - $163,621.41.
Explanation:
The Summary of Cash flows is as follows :
Year 0 : - ($ 380,000 + $ 120,000) = - $500,000
Year 1 : $ 135,000
Year 2: $ 135,000
Year 3: $ 135,000 - $ 44,000 = $91,000
Year 4: $ 135,000 + $ 69,000 + $ 120,000 = $324,000
Determine the Net Present Value of the mining project as follows :
Using a Financial Calculator, entries will be as follows
- $500,000 CFj
$ 135,000 CFj
$ 135,000 CFj
$91,000 CFj
$ 135,000 CFj
18 % I/YR
SHIFT NPV - $163,621.41
Calgary Lumber Company incurs a cost of $315 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $440 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $465 per hbf, which can be sold for $600 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Answer:
Calgary Lumber Company
Differential Analysis dated March 15:
Alternative 1 Alternative 2
Sell rough-cut Lumber Process to finished-cut
Sales $440 $600
Cost of processing 315 465
Profit $125 $135
Choose Alternative 2.
Explanation:
Calgary Lumber Company's differential analysis is a tool that its management can use to decide the alternative to pursue by examining the differences in the outcomes of two or more alternative actions. From the analysis done between the two alternatives open to Calgary, it appears that the second alternative will yield a higher profit of $135 instead of alternative 1's profit of $125. There is a differential profit of $10 per hundred board feet to be made if Calgary Lumber Company pursues alternative 2 instead of alternative 1.
building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Monroe invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:\
Answer:
Fontaine - $233,000Monroe - $191,000Explanation:
Fontaine invested a building that had a value of $366,000 but the partnership assumes a $133,000 note secured by a mortgage on the property. This therefore reduces Fontaine's contribution;
= 366,000 - 133,000
= $233,000
Monroe contributed both cash and equipment so that would go to Monroe's capital account as their capital contribution;
= 108,000 + 83,000
= $191,000
Harris Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the year of disposition. Data relating to one of Harris's depreciable assets at December 31, 2015 are as follows: Acquisition year 2013 Cost $210,000 Residual value 30,000 Accumulated depreciation 144,000 Estimated useful life 5 years Using the same depreciation method as used in 2013, 2014, and 2015, how much depreciation expense should Harris record in 2016 for this asset? a. $24,000b. $36,000c. $42,000d. $48,000
Answer:
A.24,000
Explanation:
Depreciation expense for the year 2016 can be calculated as follows
DATA
Acquisition year = 2013
Cost = $210,000
Residual value = 30,000
Accumulated depreciation = 144,000
Estimated useful life = 5 years
Remaining useful life = 5 + 4 + 3 + 2 + 1 = 15
Solution
Year Cost Remaining life Depreciation fraction Depreciation exp
1 180,000 5 5/15 $60,000
2 180,000 4 4/15 $48,000
3 180,000 3 3/15 $36,000
4 180,000 2 2/15 $24,000
5 180,0000 1 1/15 $12,000
Harris Co. should record $24,000 in 2016 for this asset
Sand Key Development Company estimates that it will generate an operating income of $7.25 million. Which financing option should Sand Key use?
Answer: debt financing option
Explanation:
Debt financing is a way by which an economic agent such as the individual, firm or the government gets enough money in order to meet a particular need.
Debt financing can be through loans from family and friends, personal loans, bank loans, credit cards etc. Since Sand Key Development Company estimates that it will generate an operating income of $7.25 million, the company can use debt financing.
Problems which deal with the direct distribution of products from supply locations to demand locations are called:____________.
a. Transportation problems
b. Assiignment problems
c. Network problems
d. Transshipment problems
Answer:
a. Transportation problems
Explanation:
In Business management, problems which deal with the direct distribution of products from supply locations to demand locations are called transportation problems.
Transportation is a supply chain technique which primarily includes all of the process involved in the distribution of finished goods and services from the production line to the consumers or end users, so as to meet their needs or wants.
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000).
5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000.
7 Macy returns 125 units because they did not fit the customer’s needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
8 Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $300 toward the original invoice amount to compensate for the damage.
15
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. (Allied estimates returns using an adjusting entry at each year-end.)
Answer:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
In order to document a business transaction in the accounting records of the company, a journal entry is employed. A journal entry is often made in the general ledger, but it can also be made in a subsidiary ledger and subsequently rolled forward into the general ledger after being summarised.
The journal entry has been attached below:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold is $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
After then, the general ledger is utilized to produce the company's financial statements. The idea behind a journal entry is to use double-entry accounting, which requires that every company transaction be recorded at least twice.
For instance, when you make a cash sale, the revenue account and the cash account are both increased. Alternatively, if you purchase items on credit, this raises both the accounts payable and inventory accounts.
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Your boss has asked you to hand deliver five invitations to a special luncheon he is hosting. When you receive the
invitations, they have only first and last names but no addresses. You remember that they all live side by side in an
apartment building on Central Street. The boss left the following information with his assistant, but it is all you have. Time to
problem-solve to figure out who lives where!
This much you know for sure Carly has Greg as one next-door neighbor and the Joneses as her other next-door
neighbors. Now it's it up to you to figure out who lives in the other apartments. It may be helpful for you to draw five boxes
to use as a visual guide. Furthermore, writing names on your drawing in pencil will allow you to keep track of the neighbors
as you place them in their homes.
1 The Smiths live in the westernmost apartment, Louis lives in the easternmost
2. Leon has Mia as one next-door neighbor with TJ on the other side.
3. Both Tami and TJ live east of the Williamses.
4. TJ lives next door to the Browns
5. Tom lives west of the Garcias and east of Carly
6. Kris and Tami are next-door neighbors. The Garcias also live next to Tami but on the other side.
7. Nikki lives east of TJ.
Answer:
1)Smiths
2)Nikki
3)Williams
4)Mia
5) Leon
6)TJ
7)Browns
8)Joneses
9)Carley
10)Greg
11)Tom
12)Garcias
13)Tami
14)Kris
15)Loise
Explanation:
