Answer:
Credit to notes payable for $165000
Explanation:
Journal entries for issuance of Note Payable :
Cash Account ..... Debit $165000
7% Note payable Accounts .... Credit $165000
Note:
Note payable is a liability so it is credited as on date of issuance.
Which of the following is true of a stock dividend? Multiple Choice It is a liability on the balance sheet. The decision to declare a stock dividend resides with the shareholders. Transfers a portion of equity from retained earnings to a cash reserve account. Does not affect total equity, but transfer amounts between the components of equity. Reduces a corporation's assets and stockholders' equity.
Answer:
Yes it is true that a stock dividend does not affect total equity.
Explanation:
A stock dividend is a non cash payment given to shareholders. Instead of cash, additional shares that is equivalent to the earnings that accrue is given to shareholders.
While this may increase the number of shares held, it does not affect total equity.
One of the benefits of stock dividends tax exemption and retained equity which translates to additional investment.
However, the additional; shares created could dilute the share prices.
Crane Corporation had the following 2020 income statement. Sales revenue $197,000 Cost of goods sold 124,000 Gross profit 73,000 Operating expenses (includes depreciation of $19,000) 48,000 Net income $25,000 The following accounts increased during 2020: Accounts Receivable $10,000, Inventory $10,000, and Accounts Payable $11,000. Prepare the cash flows from operating activities section of Crane’s 2020 statement of cash flows using the direct method.
Answer:
$35,000
Explanation:
Crane Corporation
CASH FLOW STATEMENT
FOR THE YEAR ENDING 2020
Cash Flows from Operating Activities:
Net Income $25,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation on Fixed Assets $19,000
(Increase) Decrease in Current Assets:
Accounts Receivable ($10,000)
Inventory ($10,000)
Increase (Decrease) in Current Liabilities:
Accounts Payable $11,000
Net Cash Provided by operating activities $35,000
Cash Flow from Investing Activities: -
Cash Flow from Financing Activities: -
Net Increase (Decrease) in Cash $35,000
Wayne Industries is building a new prototype riding lawnmower especially for women. The marketing strategy for the product has been developed and presented. The lawnmower is now being tested rigorously. This step will ensure that the product meets all the CPSC product specifications and leaves little chance for any product liability issues. Which step int he new product development process is this?
A) After this stage, no changes can be made in any aspect of the product design, features, or composition.
B) At this stage, the functional features and the intended psychological characteristics are combined.
C) The new product at this stage can be distributed through a full-scale roll-out immediately.
D) The new lawnmower is at the introductory stage of the lifecycle.
E) The new-product idea is at the last stage of the development process.
Answer:
The answer is option E) The new-product idea is at the last stage of the development process.
Explanation:
The are several stages in the development of a new product idea. Beginning with initial idea generation all the way to the final evaluation stage.
The new prototype riding lawnmower especially for women designed by Wayne Industries is at the last stage of the development process.
The last stage of the development process also known as the Evaluation phase is characterized by:
Presenting the marketing strategy developed for the product.ensuring that the product meets all the CPSC product specifications and leaves little chance for any product liability issues.Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $53,000 per year for 30 years, beginning a year from today. The going rate on such annuities is 7.25%. How much would it cost her to buy such an annuity today
Answer:
Present Value= $641,494.12
Explanation:
Giving the following information:
Cash flow= $53,000 per year
Number of years= 30 years
Interest rate= 7.25%
First, we need to calculate the final value of the annuity:
FV= {A*[(1+i)^n-1]}/i
A= annual flow
FV= {53,000*[(1.0725^30)-1]} / 0.0725
FV= $5,237,351.32
Now, we can determine the present value:
PV= FV/(1+i)^n
PV= 5,237,351.32/ (1.0725^30)
PV= $641,494.12
A company's income statement showed the following: net income, $117,000; depreciation expense, $31,500; and gain on sale of plant assets, $5,500. An examination of the company's current assets and current liabilities showed the following changes as a result of operating activities: accounts receivable decreased $9,700; merchandise inventory increased $19,500; prepaid expenses increased $6,500; accounts payable increased $3,700. Calculate the net cash provided or used by operating activities. Multiple Choice $143,400. $141,400. $148,200. $130,400. $169,400.
Answer:
$130,400
Explanation:
The computation of net cash provided or used by operating activities is shown below:-
Net cash provided or used by operating activities
Net income $117,000
Depreciation expense $31,500
Gain on sale of plant assets ($5,500)
Accounts receivable decreased $9,700
Increase inventory ($19,500)
Prepaid expenses increased ($6,500)
Increase account payable $3,700
Net cash flow from
operating activities $130,400
Therefore the Net cash flow from operating activities is $130,400
A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be:
a. $10,000 more if Product A is made.
b. $10,000 less if Product B is made.
c. $10,000 less if Product A is made.
d. the same if either product is made.
Answer:
Product B has a net income of $10,000 superior to Product A.
The correct answer is C.
Explanation:
Giving the following information:
Product A:
Unitary contribution margin= $16
Machine-hours required= 2
Product B:
Unitary contribution margin= $30
Machine-hours required= 3
First, we will calculate the total income of both products.
Product A= 16*(5,000/2)= $40,000
Product B= 30*(5,000/3)= $50,000
Product B has a net income of $10,000 superior to Product A.
Ahmed, a lawyer, sold his car to Carlos. Has an implied warranty of merchantability been created by this transaction? No, because Ahmed is not a merchant. Yes, because if the car is defective Carlos will have a right to return in to Ahmed. No, Ahmed has not implied so either orally or in written. Yes, because a car is "goods" and the Uniform Commercial Code applies to contracts for the sale of goods.
Answer:
A. No, because Ahmed is not a merchant.
Explanation:
Implied warranty of merchantability is a law in contract which states that when there is a transaction between a seller (the merchant), and a buyer, there is an unwritten guarantee from the seller, that the product meets up to the ordinary standards of care. This means that the goods must be fit to do what the merchant says it will do. Therefore, if the seller finds it defective, he could return it to the seller. and if the seller refuses to make a change, a legal case could be established. The merchant by law is a wholesaler or retailer, who sells goods in which he has expertise or special skills.
Ahmed in the question could be argued in court to not be a merchant of cars and as such, has no expertise with which he can make a guarantee for the car being sold to Carlos.
We learned in class that Starbucks uses its baristas as front line “brand ambassadors”. This is an example of ________________?
A.
top management not doing their jobs
B.
Inverted Organization Structure
C.
Management by Objectives MBO
D.
Giving uneducated employees too much responsibility
Answer:
Inverted Organization Structure
Explanation:
An Inverted Organization Structure is a structure where the employees are given more autonomy. Employees are given more prominent and important roles in the business.
I hope my answer helps you
Option B is correct because it is an example of inverted organization structure.
An Inverted Organization Structure is a organizational structure where employees are given more autonomy in their operation, that is, they are given more prominent and important roles in the company.
This type of structure is beneficial because the top hierarchy have lesser work and employee get more experience because of decision-makings.
In conclusion, the Option B is correct because it is an example of inverted organization structure
Read more about inverted organization structure
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The predetermined overhead rate for Zane Company is $5, comprised of a variable overhead rate of $3 and a fixed rate of $2. The amount of budgeted overhead costs at normal capacity of $150000 was divided by normal capacity of 30000 direct labor hours, to arrive at the predetermined overhead rate of $5. Actual overhead for June was $9500 variable and $6050 fixed, and standard hours allowed for the product produced in June was 3000 hours. The total overhead variance is
Answer:
Total Overhead Variance= $500 unfavorable
Explanation:
The total overhead variance is the difference between actual overhead and the applied overhead.
Actual Overhead = Variable + Fixed= $9500 + $6050= $ 15,550
Budgeted Overhead for 30000 direct labor hours = $ 150,000
Applied Overhead for 3000 hours = 3000 *$5= $15000
Total Overhead Variance= Actual Overhead Less Applied Overhead
= $15,500- $ 15000= $500 unfavorable
As actual is greater than applied it is unfavorable.
Answer:
$550 unfavorable.
Explanation:
Total actual overhead = $9,500 + $6,050 = $15,550
Total predetermined overhead = Predetermined overhead rate * Standard hours = $5 * 3,000 = $15,000
Total overhead variance = $15,550 - $15,000 = $550 unfavorable.
Note: It is unfavorable because total actual is greater than total predetermined overhead.
The selling price of imported olive oil is $20 per case. Your cost is 15 Euros per case, and the exchange rate is currently 1.25, so it takes 1.25 Euros to buy $1. Your largest customer has ordered 15,000 cases of olive oil. How much is the pretax profit for this transaction?
Answer:
$120,000
Explanation:
According to the question, the selling price (S.P) i.e. amount to be sold, of one imported olive oil case is $20 while the cost price (C.P) i.e. amount it was purchased, is €15
Looking at the currencies of both prices, they are different. To make the currencies the same, we need to convert euros (€) to dollars ($).
Based on the exchange rate of €1.25 to $1 given in the question;
€15 will be 15/1.25 = $12.
Therefore, the C.P is $12 and the S.P is $20
A customer ordered 15,000 cases of olive oil. This means that the;
1) The cost price (C.P) will be $12 × 15,000 = $180,000
2) The selling price will be $20 × 15,000 = $300,000
In order to obtain the pretax profit, we subtract the cost price (C.P) from the selling price (S.P). That is, $300,000 - $180,000 = $120,000
Bob, Kara, and Mark are partners in the BKM Partnership. Bob is a 40% partner and has a June 30 tax yearminus−end. Kara owns a 40% interest in the partnership and has a September 30 tax yearminus−end, and Mark owns the remaining 20% interest and has an October 31 tax yearminus−end. The partnership does not have a natural business year. What is the required tax yearminus−end for the partnership (if no Sec. 444 election is made)? A. September 30 B. October 31 C. December 31 D. June 30
Answer:
D. June 30
Explanation:
Since no Sec. 444 election is made, the required tax yearmius-end for the partnership will be the tax yearminus−end of a partner with at least 40% interest.
Since Bob is a 40% partner and has a June 30 tax yearminus−end, therefore, the required tax yearminus−end for the partnership is June 30.
Running Co. had an equity investment where it owned less than 20% of an investee, and therefore Running Co. was not able to exercise significant influence. Information about the investment is below: 20X1 20X2 Investment cost 170,000 170,000 Fair value 181,400 155,000 Total unrealized gain (loss) 11,400 (15,000) The company sold the investment during 20X3 for the below price: Sales price 192,400 What is the gain (loss) recorded in the income statement in the year of sale, in 20X3
Answer:
Gain or Loss to be reocrded in Financial Statement: 151600 - 155000= 3400 loss to be booked as Fair value recorded in the books as in year ended 20X2 is 155000.
Pronghorn Appliances provides a 3-year warranty with one of its products which was first sold in 2017. Pronghorn sold $1,840,000 of products subject to the warranty. Pronghorn expects $202,000 of warranty costs over the next 3 years. In 2017, Pronghorn spent $106,000 servicing warranty claims. Prepare Pronghorn’s journal entries to record the sales (ignore cost of goods sold) and the December 31 adjusting entry, assuming the expenditures are inventory costs; Pronghorn now expects future warranty costs of $115,000
Answer:
See the explanation below.
Explanation:
Balance in the warranty liability account after claim = $202,000 - $106,000 = $96,000
Amount needed to reduce expected warranty to $115,000 = $155,00 - $96,000 = $19,000
The journal entries will be as follows:
Details Dr ($) Cr ($) .
Cash 1,840,000
Sales revenue 1,840,000
To record the sales of products .
Warranty expenses 202,000
Estimated warranty liability 202,000
To record the expected warranty expenses .
Warranty liability account 106,000
Inventory 106,000
To record the warranty claim .
Warranty expenses 19,000
Estimated warranty liability 19,000
To record the reduction of expected warranty expenses to $115,000.
Darrin’s Auto Northern Division is currently purchasing a part from an outside supplier. The company's Southern Division, which has no excess capacity, makes and sells this part for external customers at a variable cost of $15 and a selling price of $27. If Southern begins sales to Northern, it (1) will use the general transfer-pricing rule and (2) will be able to reduce variable cost on internal transfers by $3. On the basis of this information, Southern would establish a transfer price of:
Answer:
Transfer price = $24
Explanation:
As per the data given in the question,
The excess capacity of Company's Southern division is nill therefore for transferring the units the division will have to decrease its external sales.The Loss occurred due to reduction in external sales should be from inter divisional transfer price. Therefore,
Transfer price = variable cost + Loss of contribution
= ($15 - $3) + ($27 - $15)
= $24
Crowl Corporation is investigating automating a process by purchasing a machine for $793,800 that would have a 9-year useful life and no salvage value. By automating the process, the company would save $133,000 per year in cash operating costs. The new machine would replace some old equipment that would be sold for scrap now, yielding $21,200. The annual depreciation on the new machine would be $88,200. The simple rate of return on the investment is closest to
a. 5.80%
b. 11.12%
c. 16.72%
d. 5.12%
Answer:
Simple rate of return is 5.8%
Therefore option (a) is correct option.
Explanation:
It is given that purchase cost = $793800
Company saving per year = $133000
Yielding = $21200
Annual depreciation = $88200
Annual profit = $133000 - $88200 = $44800
Net investment is equal to = $793800 - $21200 = $772600
Simple rate of return [tex]=\frac{44800}{772600}=0.0579[/tex]
= 5.8%
Therefore simple rate of return is 5.8 %
So option (a) is correct.
Suppose the economy is in long-run equilibrium. In a short span of time, there is a sharp rise in the stock market, an increase in government purchases, an increase in the money supply and a decline in the value of the dollar. In the short run a. the price level and real GDP will both rise. b. the price level and real GDP will both fall. c. neither the price leave nor real GDP will change. d. All of the above are possible.
Answer:
All of the above are possible.
Explanation:
Discussions here center on equilibrium of an economy in a long run, and here after the government activities, their is a decline in dollar value; therefore in the short run, the price level and real GDP will both rise in as much as the price level and real GDP will also both fall. It is also gathered that neither the price leave nor real GDP will change.
The transition from the short run to the long run may be done by considering some short run equilibrium that is also a long run equilibrium as to supply and demand, then comparing that state against a new short run and long run equilibrium state from a change that disturbs equilibrium, say in the sales tax rate, tracing out the short run adjustment first, then the long run adjustment.
Dinklage Corp. has 9 million shares of common stock outstanding. The current share price is $69, and the book value per share is $8. The company also has two bond issues outstanding. The first bond issue has a face value of $70 million, a coupon rate of 6 percent, and sells for 94 percent of par. The second issue has a face value of $55 million, a coupon rate of 5 percent, and sells for 106 percent of par. The first issue matures in 24 years, the second in 9 years.Suppose the most recent dividend was $4.25 and the dividend growth rate is 4.4 percent. Assume that the overall cost of debt is the weighted average of that implied by the two outstanding debt issues. Both bonds make semiannual payments. The tax rate is 25 percent. What is the company’s WACC? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Answer:
10.83%
Explanation:
The simplest way to determine the if we use the Gordon growth model for determining the company's stock price:
stock price = [dividend x (1 + growth rate)] / (WACC - growth rate)
dividend = $4.25g = 4.4%stock price = $69WACC - g = [dividend x (1 + g] / price
WACC = {[dividend x (1 + g] / price} + g
WACC = {[$4.25 x (1 + 4.4%] / $69} + 4.4% = 0.1083 or 10.83%
You can repair your furnace for $500 and it will last 5 more years, but your heating bills will cost you about $1500 per year. Alternatively, a new furnace can be installed for $3000 that will reduce your annual heating bill to $1200. Suppose you sell the house in 5 years and receive an additional $1000 in the sales price of your home (salvage value) because of having a fairly new furnace. Should you replace it? Use a 5-year analysis period and a MARR of 5%
Answer:
By present value old furnace should not be replaced, since the new furnace costs more.
Explanation:
Solution
For the old furnace
Present value = - 500 - 1500 = (1 +i)^n-1/i (1+i)n
= - 500-1500 * 1.05^⁵/0.05 * 1.05^⁵
= -$6994.215
Now,
For the new furnace
The present value = - 3000 - 1200 * 1.05^⁵ - 1/0.05 * 1.05^⁵ + 1000/ (1.05)⁵
= -$7411.845
Therefore, As the new furnace costs more by present value old furnace should not be replaced
Assume the following: WIP, beginning 2 comma 500 units (100% complete as to direct materials, 50% complete as to conversion costs) Started 10 comma 500 units during the period Total spoilage is 700 with normal spoilage is calculated to be 550 units Completed and transferred out during the period 6 comma 000 units WIP, ending 6 comma 300 units (100% complete as to direct materials, 60% complete as to conversion costs) Spoiled units 700 and inspection happens when the process is 20% complete All materials are added at the start of the process Under the weighted average method, would would be the equivalent units of work done for the period? A. 9 comma 920 B. 10 comma 190 C. 6 comma 000 D. 6 comma 300
Answer:
B. 10 comma 190
Or none of the given
Explanation:
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Transferred 6000 100 100 6000 6000
+Ending WIP 6300 100 60 6300 3780
+Normal Spoilage 550 100 60 550 330
+Abnormal
Spoilage 150 100 60 150 90
Total 13000 10200
As we see the total weighted Equivalent units for materials are 13000
and for conversion are 10200 . So the correct choice would be 10190 that is choice B which the nearest answer of the choices given to the answer calculated .
Under weighted method the Transferred out units are added to the ending work in process and the normal and abnormal spoilage is also added to find the equivalent units of production.
The other answer would be none of the given choices if exact figures are to be matched.
Purdum Farms borrowed $16 million by signing a five-year note on December 31, 2017. Repayments of the principal are payable annually in installments of $3.2 million each. Purdum Farms makes the first payment on December 31, 2018 and then prepares its balance sheet. What amount will be reported as current and long-term liabilities, respectively, in connection with the note at December 31, 2018, after the first payment is made?
Answer:
Current liabilities $3.2 million
long-term liabilities =$16 million-$3.2 million-$3.2 million=$9.6 million
Explanation:
The amount classified as current liabilities as at 31st December 2018 is the portion of the loan repayable within a year,that the repayment due at 31st December 2019 which is $3.2 million.
The amount to be classified as long term liabilities is the balance of the loan after having taken out the payment in year 1 as well as the repayment to be made in year 2
The management of Ballard MicroBrew is considering the purchase of an automated bottling machine for $74,000. The machine would replace an old piece of equipment that costs $19,000 per year to operate. The new machine would cost $9,000 per year to operate. The old machine currently in use could be sold now for a salvage value of $31,000. The new machine would have a useful life of 10 years with no salvage value. Required: 1. What is the annual depreciation expense associated with the new bottling machine
Answer:
$7,400 per year
Explanation:
Data provided for computing the annual depreciation expense is here below:-
Automated bottling machine = $74,000
Useful life = 10 years
The calculation of annual depreciation expense is given below:-
Annual depreciation expense = Automated bottling machine ÷ Useful life
= $74,000 ÷ 10
= $7,400 per year
Therefore for computing the annual depreciation expense we simply divide the automated bottling machine by useful life.
CSUSM is a zero growth company. It currently has zero debt and its earnings before interest and taxes (EBIT) are $85,000. CSUSM 's current cost of equity is 11%, and its tax rate is 21%. The firm has 15,000 shares of common stock outstanding. Assume that CSUSM is considering changing from its original capital structure to a new capital structure with 39% debt and 61% equity. This results in a weighted average cost of capital equal to 8.7% and a new value of operations of $576,345. Assume CSUSM raises $165,000 in new debt and purchases T-bills to hold until it makes the stock repurchase. What is the stock price per share immediately after issuing the debt but prior to the repurchase?
Answer:
Check the explanation
Explanation:
Calculation of CSUSM 's New value of Operation :
For the purpose of Calculation of New Value of Operation we need to first calculate new WACC
Given :
Debt value ( Wd) = 30% or 0.30
Equity Value ( We)= 70% or 0.70
Cost of Debt ( Kd) =8%
New cost of equity (Ke) =12%
WACC =Kd(1-T) * Wd + Ke* We
WACC =[8%(1-0.40) * 0.30] + [12% * 0.70]
= [4.80% * 0.30 ] + [8.4 %]
= 1.44% + 8.4%
= 9.84 %
Given EBIT = $ 80,000
Tax rate = 40%
Currently the company has no growth. Therefore growth rate is 0 %
Value of New Operation =FCF / WACC
=EBIT (1-T) / WACC
=$80,000 (1-0.40)/ 9.84%
= $ 487,804.88
At the beginning of last year, Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Tari's fixed manufacturing overhead budget variance was $12,000 favorable. Its fixed manufacturing overhead volume variance was $19,200 favorable. Actual direct labor-hours for the year were 625,000. What was Tari's total standard machine-hours allowed for last year's output?
Answer:
The answer is 612800 hours
Explanation:
Solution
Recall that:
At the start of last year, Tari Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours.
At the end of the year, Tari's fixed manufacturing overhead budget variance was $12000 favorable. Its fixed manufacturing overhead volume variance was $19200 favorable. The direct actual labor-hours for the year were 625,000. What was Tari's standard total machine-hours allowed for last year's output?
Now,
The Budgeted at beginning of the year = $900,000
fixed manufacturing overhead for = 600,000 machine hours
Thus,
The Standard = $900,000 / 600,000 hours = $1.5 fixed overhead / machine/machining hour
So,
At end of year, manufacturing overhead volume was $19,200 favorable which means that,
$19200 / $1.5 = 12800 additional hours.
Total Standard Machine Allowance Allowed for output = 600,000 +12800 = 612800 hours
Therefore, Tari's total standard machine-hours allowed for last year's output is 612800 hours
If Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Its fixed manufacturing overhead volume variance was $19,200 favorable. What Tari's total standard machine-hours allowed for last year's output will be is: 612,800 machine hours
Using this formula
Total standard machine-hours=Machine -hours level of activity+ [Fixed manufacturing overhead volume variance÷(Fixed manufacturing overhead÷ Machine -hours level of activity)]
Where:
Machine -hours level of activity=600,000
Fixed manufacturing overhead volume variance=$19,200
Fixed manufacturing overhead=$900,000
Let plug in the formula
Total standard machine-hours=600,000+[$19,200÷($900,000÷600,000)]
Total standard machine-hours=600,000+($19,200÷1.5)
Total standard machine-hours=600,000+12,800
Total standard machine-hours=612,800 machine hours
Inconclusion if Tarind Corporation budgeted $900,000 of fixed manufacturing overhead and chose a denominator level of activity of 600,000 machine-hours. At the end of the year, Its fixed manufacturing overhead volume variance was $19,200 favorable. What Tari's total standard machine-hours allowed for last year's output will be is: 612,800 machine hours
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January 1, 2021, Woody Forrest Corporation granted executive stock options to purchase 41,000 of its common shares at $9 each. The market price of common stock was $24 per share on December 31, 2021, and averaged $12 per share during the year then ended. There was no change in the 164,000 shares of outstanding common stock during the year. Net income for the year was $39,000. The number of shares to be used in computing diluted earnings per share for the quarter is:
Answer:
174,250 shares
Explanation:
The computation of the number of shares to be used in computing diluted earnings per share is shown below:
Proceeds from exercise of options (a) $369,000 (41,000 shares × $9)
Used to repurchased for common stock (b) 30,750 shares (41,000 shares × $9 ÷ $12)
Number of shares for exercised (c) 41,000 shares
Less: repurchased shares (d) -30,750 shares
Diluted common shares {e = c - d} 10,250 shares
Add: Common shares (f) 164,000 shares
Total number of shares for diluted earning per share 174,250 shares
We ignored the market price of common stock as it is not relevant.
Under the allowance method of accounting for uncollectible accounts, a. the cash realizable value of accounts receivable is greater before an account is written off than after it is written off. b. Bad Debts Expense is debited when a specific account is written off as uncollectible. c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off. d. Allowance for Doubtful Accounts is closed each year to Income Summary.
Answer:
c. the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off.
Explanation:
Under the allowance method of accounting for uncollectible accounts, the cash realizable value of accounts receivable in the balance sheet is the same before and after an account is written off and bad debt expenses is debited.
This means that in the period in which an account previously written off is collected, the income is unaffected.
Also, under the allowance method of accounting, total assets will remain unchanged when a particular account is being written off.
Levine Company uses the perpetual inventory system. Apr. 8 Sold merchandise for $9,300 (that had cost $6,873) and accepted the customer's Suntrust Bank Card. Suntrust charges a 4% fee. 12 Sold merchandise for $5,000 (that had cost $3,240) and accepted the customer's Continental Card. Continental charges a 2.5% fee. Prepare journal entries to record the above credit card transactions of Levine Company
Answer:
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Explanation:
Levine CompanyJournal entries
Date General Journal Debit Credit
Dr Apr 08 Cash $8,928
Dr Credit Card Expense $372
(4%×9300)
Cr Sales $9300
Apr 08 Cost of goods sold $6,873
Merchandise inventory $6,873
Dr Apr 12 Accounts receivable- Continental $4,875
Dr Credit card expense $125
(2.5%×5000)
Cr Sales $5,000
Dr Apr 12 Cost of Goods Sold $3,240
Cr Merchandise Inventory $3,240
Wicker Rockers, Inc. is planning to offer a defined contribution plan for its employees. The company would like to incorporate a "cliff" vesting schedule for the employer contributions into the plan. What is the minimum vesting period the company can choose for a "cliff" vesting schedule
Answer:3 years
Explanation:
Cliff vesting is when an employee of a company becomes fully vested on a specified date rather than the employee becoming partially vested in increasing amounts over extended period. Cliff Vesting is a process whereby the employees are entitled to full benefits from their firm’s pension policies and qualified retirement plans on a given date.
Upon the completion of the cliff period, employees receive full benefits. The Pension Protection Act of 2006 deduced a three-year cliff vesting schedule for the designated defined-contribution plans which includes 401Ks.
Scenario 28-1 Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the unemployment rate?
Answer:
10.7%
Explanation:
Solution:
Recall that:
The Reports from Bureau of labor statistics is shown as follows:
Employed people = 25 million
Unemployed people = 3 million
Discouraged workers = 1 million
Workers or Homemakers or retirees, or students = 1 million
The next step from this scenario is to find out the unemployment rate
Now,
The rate of unemployed = (unemployed x 100 ) / labor force
= 300/28
=10.7%
g On July 1, 2019, Sheffield Corp. issued 9% bonds in the face amount of $12400000, which mature on July 1, 2025. The bonds were issued for $11859948 to yield 10%, resulting in a bond discount of $540052. Sheffield uses the effective-interest method of amortizing bond discount. Interest is payable annually on June 30. At June 30, 2021, Sheffield's unamortized bond discount should be
Answer:
$393,063
Explanation:
The bond is issued on discount when the issuance price is less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.
Unamortized Discount is the discount balance which has not been expensed or discount balance for outstanding period of the bond to maturity.
Discount Balance = $540,052
Date Interest Paid Interest Expense Amortization Book Value
7/1/19 11,859,948
6/30/20 1,116,000 1,185,995 69,995 11,929,943
6/30/21 1,116,000 1,192,994 76,994 12,006,937
Unamortized Discount = Total Discount - Discount amortized
Unamortized Discount = $540,052 - ($69,995 + $76,994)
Unamortized Discount = $393,063
Samco signed a 5-year note payable on January 1, 2018, of $ 475 comma 000. The note requires annual principal payments each December 31 of $ 95 comma 000 plus interest at 9%. The entry to record the annual payment on December 31, 2021, includes A. a debit to Interest Expense for $ 17 comma 100. B. a debit to Interest Expense for $ 42 comma 750. C. a credit to Cash of $ 137 comma 750. D. a credit to Notes Payable for $ 95 comma 000.
Answer:
Option A, a debit to Interest Expense for $ 17 comma 100 is correct
Explanation:
The principal amount on 1st January 2021 needs to be established since that would be the amount left after 2018,2019,2020 principals have been repaid
Principal at 1st January 2021=$475,000-($95,000*3)=$190000
Interest on principal in 2021=$190000 *9%=$17100
Total repayment in 2021=principal plus interest=$95,000+$17,100=$ 112,100.00
The $95,000 would be a debit to notes payable not credit hence option is wrong.
Only option A,a debit of $17,100 to interest expense is correct
