Answer:
Dr Unearned fees $24,510
Cr Fees earned $24,510
Explanation:
Preparation of the December 31 adjusting entry required
Based on the information given if the balance shown in the unearned fees account was the amount of $37,040 before adjustment at the end of the year which means that if the amount of unearned fees at the end of the year is the amount of $12,530 the December 31 adjusting entry required will be :
Dr Unearned fees $24,510
Cr Fees earned $24,510
($37,040-$12,530)
The gross domestic product (GDP) of the United States is defined as the market value of allfinal goods and services produced within the United States in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018.
a. An accountant starts a client's 2018 tax return on April 14, 2019, finishing it just before midnight on April 15, 2019. Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 5, 2018.
b. An elementary school student buys the chocolate bar on December 24. Rotato, a U.S. tire company, produces a set of tires at a plant in Michigan on September 13, 2018. It sells the set of tires to Speedmaster for use in the production of a two-door coupe that will be made in the United States in 2018. (Note: Focus exclusively on whether production of the set of tires increases GDP directly, and ignore the effect of production of the two-door coupe on GDP.)
c. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 9, 2018. It sells the car at a dealership in San Diego on February 24, 2018.
d. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 17, 2018. Athleticus imports the pair of sneakers into the United States on May 21, 2018.
Answer:
Chocolate Express, a Swiss chocolate company, produces a chocolate bar at a plant in Illinois on December 5, 2018.
b. An elementary school student buys the chocolate bar on December 24..
c. Zippycar, a U.S. automobile company, produces a convertible at a manufacturing plant in Minneapolis on January 9, 2018. It sells the car at a dealership in San Diego on February 24, 2018.
d. Athleticus, a U.S. shoe company, produces a pair of sneakers at a plant in Vietnam on March 17, 2018. Athleticus imports the pair of sneakers into the United States on May 21, 2018.
Explanation:
Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year
GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export
Net export = exports – imports
When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.
Items not included in the calculation off GDP includes:
1. services not rendered to oneself
2. Activities not reported to the government
3. illegal activities
4. sale or purchase of used products
5. sale or purchase of intermediate products
The accountant's work would be included in 2019's GDP
The chocolate purchase would be included in GDP as part of consumption expenditure
Tire is an intermediate good in this question and would not be included in GDP
The purchase of the shoe from Vietnam would have no effect on GDP because it decreases net export
what is a down payment of 20 percent on a purchase price of $215,000
Answer:
$43,000
Explanation:
The next three questions are based on the following information: Demand for an item is 1000 units per year. A processing fee of $10 will be charged for each order placed. The purchasing cost of the item is $20. The annual cost to carry an item in inventory is 20% of the item costs. What is the unit inventory holding cost
Answer:
$4.00
Explanation:
The cost of purchasing 1000 units per year is computed thus:
the annual cost of purchase=annual demand*cost per unit
annual demand=1000
cost per unit=$20
the annual cost of purchase=1,000*$20
the annual cost of purchase=$20,000
The cost of carrying or holding the inventory for one year is 20% of cost of purchase
Annual holding cost=20%*$20,000
Annual holding cost=$4,000
the unit inventory holding cost=annual holding cost/annual demand
the unit inventory holding cost=$4,000/1000
the unit inventory holding cost=$4.00
Klingon Cruisers, Inc., purchased new cloaking machinery three years ago for $12 million. The machinery can be sold to the Romulans today for $10.8 million. Klingon's current balance sheet shows net fixed assets of $10 million, current liabilities of $830,000, long-term debt of $5 million and net working capital of $248,000. If all the current accounts were liquidated today, the company would receive $1.15 million cash. What is the book value of Klingon's equity?
a. $5,248,000.00.
b. $11,078,000.00.
c. $5,000,000.00.
d. $22,800,000.00.
e. $12,000,000.00.
Answer:
a. $5,248,000.00.
Explanation:
Calculation for the book value of Klingon's equity
Book value = $248,000 + $5,000,000
Book value = $5,248,0000
Therefore the book value of Klingon's equity will be $5,248,0000
Prepare the issuer's journal entry for each of the following separate transactions.
a. On March 1, Atlantic Co. issues 49,500 shares of $4 par value common stock for $318,500 cash.
b. On April 1, OP Co. issues no-par value common stock for $84,000 cash.
c. On April 6, MPG issues 3,400 shares of $20 par value common stock for $53,000 of inventory, $150,000 of machinery, and acceptance of a $103,000 note payable.
Answer:
a.
March 1
Debit : Cash $318,500
Credit : Common Stock $198,000
Credit : Excess of Par $120,500
Being Issue of Par value Shares for $318,500 cash
b.
April 1
Debit : Cash $84,000
Credit : Common Stock $84,000
Being Issue of no Par value shares for $84,000 cash
c.
April 6
Debit : Inventory $53,000
Debit : Note Receivable $103,000
Credit : Common Stock $68,000
Credit : Excess of Par $88,000
Being Issue of Par value Shares for Inventory and Note Receivable
Explanation:
Note: We are instructed to prepare journals from the issuer`s point of view and this needs to be followed.
When shares are issued, the Common Stock increases :
a. For par value Common Stocks, any price paid in excess of par value is accounted in Excess of Par Reserve.
b. For no par value shares, there is no Excess of Par Reserve, we simply record the increase in Common Stock at the price paid for.
I have a group of friends. One thing we have in common is that we all want a Tesla Model 3. We can all afford to buy a Tesla Model 3. However, we are all unwilling to pay the current price for a Tesla Model 3. Thus, my group of friends are not this:_______.
a. cool in any sense of the word
b. a market of potential Tesla customers
c. a positioning market group
d. a useful segmenting base
Answer:
b. a market of potential Tesla customers
Explanation:
As given all friend afford to buy a Tesla Model 3 and unwilling to pay the current price so group of friends is a market of potential Tesla customersA potential market is a group of people from the entire population who show some interest in buying a particular product or service. so correct option is b. a market of potential Tesla customersMoney management includes effective tax planning. Your financial plan should include ways to lower your tax liability so you have more money to spend, invest, or donate. The key to effective tax planning is to reduce your taxable income, rather than your gross income, through all appropriate and legally available opportunities.
The act of reducing taxes in ways that are legal and compatible with the intent of Congress is called:______
Answer:
Tax Avoidance
Explanation:
A Tax is simply a compulsory payment to a local, state, or national government. It is a source of Revenue to government.
Tax Avoidance is defined as an action that an individual embark on to lreduce tax and maximize after tax income. That is to lessen one's tax liability within the limit set up by law.
In case of tax reduction or minimisation for an individual, one must;
1. Know that the arrangement is usually in the beginning of the business rather than in the course of it.
2. There must be sound commercial reasons for the arrangement.
3. Limit tax by exercising choices provided for in the Act and do not use these choices out of the manner listed by parliament. e.t.c
Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials $ 2,430 Direct labor-hours 70 labor-hours Direct labor wage rate $ 20 per labor-hour Machine-hours 134 machine-hours The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $21 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be:
Answer:
6644
Explanation:if u do the math whith your numbers you should get the answer
Tammy, a resident of Virginia, is considering purchasing a $100,000 North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. She is aware that State of Virginia bonds of comparable risk are yielding 4.5%. However, the Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Tammy can deduct any state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is $100,000.
The question is incomplete. The complete question is :
Tammy, a resident of Virginia, is considering whether to purchase a $100, 000 North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. Tammy is aware that State of Virginia bonds of comparable risk are yielding 4.5%. Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Tammy can deduct all state taxes paid on her Federal income tax return. In your analysis, assume that the bond amount is $100,000.If required, round your computations and answers to the nearest dollar. Determine the after tax income from each bond. Virginia Bond: $ 4, 600 North Carolina Bond: $ 4, 451 Which of the two options will provide the greater after-tax return to Tammy? Virginia bond
Solution :
Assuming that the bond amount is $100,000.
After the tax income from the Virginia bond is given by:
= 100,000 x 4.5%
= $ 4500
After the income tax from the North Carolina bond :
= (100,000 x 4.6%) x (1-5%) + (100,000 x 4.6% x 5% x 0.35)
= $ 4451
Therefore the Virginia bond will give an after tax higher return.
The distance between defects in an automated weaving process at Craft Mills, Inc. is exponentially distributed. On average there are 0.025 defects per foot. Use the random number 0.749 to simulate the distance between two defects. Give your answer to 3 decimal places. (Note: For this problem, the average (represented by tau) would be the average distance (in feet) between defects.)
Answer:
55.292 feets
Explanation:
Given that :
Average defect per foot, λ = 0.025
Random number generated = 0.791
Distance between two defects :
b(x) = 1 - e^-λx = random number
1 - e^-λx = 0.749
e^-λx = 0.749 - 1
λ = 0.025
e^-0.025x = - 0.251
Take the In of both sides ;
-0.025x = - ln(0.251)
0.025x = In(0.251)
x = In(0.251) / 0.025
x = 1.382302 / 0.025
x = 55.29209
x = 55.292 feets
Hence, distance between two defects is 55.292 feets
Find the EAR in each of the following cases: Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) 7% Quarterly 17 Monthly 13 Daily 10 infinite
Answer:
7.19
18.39
13,88
10.51%
Explanation:
EAR = (1 + periodic interest rate)^m - 1
m = number of compounding
a. ( 1 + 0.07/4)^4 - 1 = 7.19%
b. (1 + 0.17/12)^12 - 1 = 18.39%
c. (1 + 0.13/365)^365 - 1 = 13.88%
d. EAR =
PLEASE HELP!!!!
How is a check treated by the US government?
a. as currency
b. as a legal contract
c. as a negotiable instrument
d. as a promise from the payee to the payer
Answer:
legal contract
Explanation:
should be it or currency
Slapshot Company makes ice hockey sticks and sold 1,890 sticks during the month of June at a total cost of $378,000. Each stick sold at a price of $360. Slapshot also incurred two types of selling costs: commissions equal to 10% of the sales price and other selling expense of $64,700. Administrative expense totaled $53,800.
Required:
Prepare an income statement for Slapshot for the month of June
Answer:
Slapshot Company
Income statement for the month of June
Sales ( 1,890 x $360) $680,400
Less Costs of Sales ($378,000)
Gross Profit $302,400
Selling Costs :
Commissions $68,040
Other Selling Expense $64,700
Administrative Expense $53,800 ($186,540)
Net Income $115,860
Explanation:
The Income statement shows the Profit earned during the reporting period. This is determined as Gross Profit (Sales - Cost of Sales) minus the Operating Expenses.
On January 1, Gucci Brothers Inc. started the year with a $696,000 balance in Retained Earnings and a $602,000 balance in common stock. During the year, the company reported net income of $109,000, paid a dividend of $14,400, and issued more common stock for $30,000. What is total stockholders' equity at the end of the year?
Answer:
See below
Explanation:
Given the above information, we will first calculate the common stock
Common stock = Balance in common stock + Common stock issued
= $602,000 + $30,000
= $632,000
Retained earnings
= Balance in retained earning + Net income - dividend paid
= $696,000 + $109,000 - $14,400
= $790,600
Total stockholder equity
= Common stock + retained earning
= $632,000 + $790,600
= $1,422,600
Magazine sells subscriptions for $60 for 30 issues. The company collects cash in advance and then mails out the magazines to subscribers each month. Apply the revenue recognition principle to determine a. when Seacoast Magazine should record revenue for this situation. b. the amount of revenue Seacoast Magazine should record for five issues.
Answer:
a. Revenue is earned when when service or product are delivered to client. Thus Seacoast Magazine should recognize the revenue when it mails the magazines to its subscribers.
b. Total amount received is $60 for 30 issues.
Amount for 1 issues = Total cost / Number of issues of magazines = $60/30 = $2 per issue
Amount of 5 issues = $2 * 5 = $10
Therefore, Seacoast Magazine should record revenue $10 for 5 issues.
Spicewood Stables, Inc., was established in Dripping Springs, Texas, on April 1. The company provides stables, care for animals, and grounds for riding and showing horses. You have been hired as the new assistant controller. The following transactions for April are provided for your review.
1. Received contributions from investors and issued $230,000 of common stock on April 1.
2. Acquired a barn for $180,000. On April 2, the company paid half the amount in cash and signed a three-year note payable for the balance.
3. Provided $18,000 in animal care services for customers on April 3, all on credit.
4. Rented stables to customers who cared for their own animals; received cash of $14,000 on April 4 for rent earned this month.
5. On April 5, received $3,350 cash from a customer to board her horse in May, June, and July (record as Deferred Revenue).
6. Purchased and received hay and feed supplies on account on April 6 for $3,800.
7. Paid $2,600 on accounts payable on April 7 for previous purchases.
8. Received $2,040 from customers on April 8 on accounts receivable.
9. On April 9, prepaid a two-year insurance policy for $4,800 for coverage starting in May.
10. On April 28, paid $1,140 in cash for water and utilities used this month.
11. Paid $14,800 in wages on April 29 for work done this month.
12. Received an electric utility bill on April 30 for $1,560 for usage in April; the bill will be paid next month.
Required:
1. Prepare the journal entry for each of the above transactions.
2. Post the transaction activity from requirement 1 to the T-Accounts below. All accounts begin with zero balances because this is the first month of operations.
3. Prepare an unadjusted trial balance as of April 30.
4-a. Refer to the revenues and expenses shown on the unadjusted trial balance. Based on this information, calculate preliminary net income and net profit margin.
4-b. Determine whether the net profit margin is better or worse than the 30.0 percent earned by a close competitor.
Answer:
Spicewood Stables, Inc.
1. Journal Entries:
April 1:
Debit Cash $230,000
Credit Common Stock $230,000
To record contributions from investors and issuance of stock.
April 2:
Debit Barn $180,000
Credit Cash $90,000
Credit Notes Payable (Long-term) $90,000
To record the acquisition of a barn.
April 3:
Debit Accounts Receivable $18,000
Credit Service Revenue $18,000
To record the provision of animal care services on credit.
April 4:
Debit Cash $14,000
Credit Rent Revenue $14,000
To record the renting of stables to customers for April.
April 5:
Debit Cash $3,350
Credit Deferred Revenue $3,350
To record the receipt of cash from customer in advance.
April 6:
Debit Supplies $3,800
Credit Accounts Payable $3,800
To record the purchase of hay and feed supplies on account.
April 7:
Debit Accounts Payable $2,600
Credit Cash $2,600
To record the payment on account
April 8:
Debit Cash $2,040
Credit Accounts Receivable $2,040
To record the receipt of cash from customers.
April 9:
Debit Prepaid Insurance $4,800
Credit Cash $4,800
To record the prepayment of insurance for 2 years.
April 10:
Debit Utilities Expense $1,140
Credit Cash $1,140
To record the payment for water and utilities.
April 11:
Debit Wages Expense $14,800
Credit Cash $14,800
To record the payment of wages for the month.
April 12:
Debit Utilities Expense $1,560
Credit Utilities Payable $1,560
To record the accrued electric utility bill.
2. T-Accounts:
Cash
Date Account Title Debit Credit
April 1 Common stock $230,000
April 2 Barn $90,000
April 4 Rent Revenue 14,000
April 5 Deferred Revenue 3,350
April 7 Accounts payable 2,600
April 8 Accounts receivable 2,040
April 9 Prepaid Insurance 4,800
April 10 Utilities Expenses 1,140
April 11 Wages Expense 14,800
April 12 Balance $136,050
Totals $249,390 $249.390
Common Stock
Date Account Title Debit Credit
April 1 Cash $230,000
Barn
Date Account Title Debit Credit
April 2 Cash $90,000
April 2 Notes payable 90,000
April 12 Balance $180,000
Notes Payable
Date Account Title Debit Credit
April 2 Barn $90,000
Accounts Receivable
Date Account Title Debit Credit
April 3 Service Revenue $18,000
April 8 Cash $2,040
April 12 Balance $15,960
Service Revenue
Date Account Title Debit Credit
April 3 Accounts receivable $18,000
Rent Revenue
Date Account Title Debit Credit
April 4 Cash $14,000
Deferred Revenue
Date Account Title Debit Credit
April 5 Cash $3,350
Supplies
Date Account Title Debit Credit
April 6 Accounts Payable $3,800
Accounts Payable
Date Account Title Debit Credit
April 6 Supplies $3,800
April 7 Cash $2,600
April 12 Balance $1,200
Prepaid Insurance
Date Account Title Debit Credit
April 9 Cash $4,800
Utilities Expenses
Date Account Title Debit Credit
April 10 Cash $1,140
Wages Expense
Date Account Title Debit Credit
April 11 Cash $14,800
3. Unadjusted Trial Balance as of April 30:
Account Title Debit Credit
Cash $136,050
Common stock $230,000
Barn 180,000
Notes payable 90,000
Accounts receivable 15,960
Service Revenue 18,000
Rent Revenue 14,000
Deferred Revenue 3,350
Supplies 3,800
Accounts payable 1,200
Prepaid Insurance 4,800
Utilities Expenses 1,140
Wages Expense 14,800
Totals $356,550 $356,550
4a.
Service Revenue 18,000
Rent Revenue 14,000
Total revenues $32,000
Utilities Expenses 1,140
Wages Expense 14,800
Total expenses $15,940
Net Income $16,060
Net profit margin = $16,060/$32,000 * 100 = 50.19%
4b. The net profit margin is better than the 30.0% earned by a close competitor.
Explanation:
The adjustment for Electric Utility does not form part of the adjusted trial balance. If we assume that the payment was eventually made on April 30, the Cash Balance will reduce by $1,560 and the total expenses will increase by the same amount with an equal reduction in the net income to $14,500. This will also reduce the net profit margin to 45.31%.
Avery Corporation's target capital structure is 35% debt, 10% preferred, and 55% common equity. The interest rate on new debt is 6.50%, the yield on the preferred is 6.00%, the cost of common from reinvested earnings is 11.25%, and the tax rate is 25%. The firm will not be issuing any new common stock. What is Avery's WACC
Answer:
8.15%
Explanation:
The computation of the weighted average cost of capital as follows;
= After Cost of debt × weightage of debt + cost of preferred stock × weight of preferred stock + cost of common equity × weight of equity
= 6.50% × (1 - 0.40) × 35 ÷ 100 + 6% × 10 ÷ 100 + 11.25% × 55 ÷ 100
= 1.37% + 0.60% + 6.19%
= 8.15%
If producing 200 buttons and 200 safety pins
daily is a 50% split of resources, where do we
see the opportunity cost if you decide to
produce 300 buttons and 100 safety pins?
A. The opportunity cost is still at 50%.
B. The opportunity cost is in producing fewer safety pins.
C. The opportunity cost is in the inefficiency of producing to
products.
D. The opportunity cost is in the market share for buttons.
Answer:
The correct option is - B. The opportunity cost is in producing fewer safety pins.
Explanation:
The correct option is - B. The opportunity cost is in producing fewer safety pins.
Reason -
Initially we produce 200 buttons and 200 safety pins and there are 50% split of resources.
Now, If we produce 300 buttons and 100 safety pins and there is no change in the split of resources, then
The opportunity cost of extra 100 buttons is sale amount we would have been getting if we make that 100 safety pins.
When the economy is doing well, the financial market is also guaranteed to do well.
True
False
Washtenaw Corporation uses a job-order costing system. The following data are for last year: Estimated Direct Labor Hours 14,000 Estimated Machine Hours 12,000 Estimated Manufacturing Overhead Cost $42,600 Actual Direct Labor Hours 11,000 Actual Machine Hours 13,000 Actual Manufacturing Overhead Cost $39,000 Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What predetermined overhead rate was used last year
Answer:
$3.25 per direct labor-hour
Explanation:
Calculation for predetermined overhead rate was used last year
Predetermined overhead rate = $39,000 ÷ 12,000 direct labor-hours
Predetermined overhead rate= $3.25 per direct labor-hour
Therefore the predetermined overhead rate was used last year was $3.25 per direct labor-hour
You have been learning about the accounting equation, debits/credits, and account normal balances. The accounting equation is the foundation of accounting. Understanding debits/credits and the account normal balances are just as important. Sometimes, these concepts are difficult to understand and/or remember. Please research the Internet to find fun and easy ways to remember this information. It could be a song, a mnemonic, phrase, video, etc. It can even be something that you have created. Make sure that the information is college appropriate. Please post your findings and include a link that references the material. Then in a minimum of a paragraph, summarize why you choose this source, how it has helped you remember the material, and why other students would find it helpful.
Answer:
using the word DEALER
since we record our debit accounts on the left hand side of the Ledger and we record credit accounts on the right hand side of the Ledger hence
DEA represents ( Dividends, expenses , Assets ) which are recorded in Debit accounts while
LER represents ( Liabilities ,Equity and revenues ) which are recorded in credit accounts
Explanation:
The fundamentals of accounting is based on the ability to distinguish between a Debit and a credit . ability to do this efficiently will help in the process of balancing the ledger at the end of each accounting period. most times the concepts of Debits and credits are not so easy to memorize hence i will such the Fun way of Memorizing them which is;
using the word DEALER
since we record our debit accounts on the left hand side of the Ledger and we record credit accounts on the right hand side of the Ledger hence
DEA represents ( Dividends, expenses , Assets ) which are recorded in Debit accounts while
LER represents ( Liabilities ,Equity and revenues ) which are recorded in credit accounts
During fiscal 2016, Caleres Inc. (formerly Brown Shoe Company), reported cost of goods sold of $1,517.4 million. Inventory at the start of the year was $546.7 million and at the end of the year was $585.8 million. Which of the following describes the closing entry that the company will make for these accounts?
A. Debit Inventory $39.1 million.
B. Credit Inventory $585.8 million.
C. Credit Cost of goods sold $1,517.4 million.
D. Both A and C.
E. None of the above.
Answer:
Credit Cost of goods sold $1,517.4 million
Explanation:
given data
cost of goods sold = $1,517.4 million
Inventory at the start of the year = $546.7 million
Inventory at the end of the year = $585.8 million
solution
Journal Entry will as
Income Summary DR $1,517.4 million
Cost of goods sold CR $1,517.4 million
so correct option is C. Credit Cost of goods sold $1,517.4 million.
On December 1st, the company pays a local radio station $200,000 for 4 months of radio ads that are to be aired equally throughout December through March. Prepaid Advertising was debited on December 1st and no other entries regarding this transaction were made since then.
15. $ After the adjusting entry has been recorded on December 31", determine the amount of advertising expense for the year ended December 314 16. S After the adjusting entry has been recorded on December 31%, determine the ending balance in the prepaid advertising account that should be recorded on the December 31" Balance Sheet. Use the following transactions to answer questions
17-19 Determine the amount of revenue or expense that would be reported at the time of the transaction under the two methods. An example transaction has been completed for you.
Question Completion:
Journalize the adjusting entry.
Answer:
Adjusting Journal Entry:
December 31:
Debit Advertising Expense $50,000
Credit Prepaid Advertising $50,000
To record the advertising expense for the year (1 month's).
Explanation:
a) Data and Calculations:
December 1: Prepaid Advertising for 4 months = $200,000
Advertising expense for the year (1 month) = $50,000 ($200,000/4 months)
Balance of Prepaid Advertising for 3 months = $150,000 ($200,000 *3/4)
b) The Adjusting Journal entry recognizes the advertising expense that relates to the year and carry forward the prepaid balance to the next accounting year. Expenses and revenue are recorded when the services are consumed or rendered and not when cash is exchanged. In this case, the $200,000 is not recognized as advertising expense for the current year. Instead, only $50,000 is recorded as expense. The balance of $150,000 is carried forward to the next year when the service will be consumed.
Waupaca Company establishes a $350 petty cash fund on September 9. On September 30, the fund shows $144 in cash along with receipts for the following expenditures: transportation costs of merchandise purchased, $42; postage expenses, $50; and miscellaneous expenses, $102. The petty cashier could not account for a $12 shortage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare:
a. the September 9 entry to establish the fund.
b. the September 30 entry to reimburse the fund
c. An October 1 entry to increase the fund to $395.
Solution :
Date Account Debit Credit
Sept 9 Petty cash $ 350
Cash $ 350
Sept 30 merchandise purchased $ 42
postage expenses $ 50
miscellaneous expenses $ 102
Cash shortage $ 12
Cash (350-42-50-102)=156-144=12 $ 206
Oct 1 Petty cash 45
Cash (395-350) $ 45
a. Performed $29,400 of services on account.
b. Collected $17,500 cash on accounts receivable.
c. Paid $4,400 cash in advance for an insurance policy.
d. Paid $570 on accounts payable.
e. Recorded the adjusting entry to recognize $3,700 of insurance expense.
f. Recorded the adjusting entry to recognize $300 accrued interest revenue.
g. Received $9,500 cash for services to be performed at a later date.
h. Purchased land for $1,560 cash.
i. Purchased supplies for $1,800 cash.
Required:
Record each of the above transactions in general journal form and then show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Transaction Account Titles Debit Credit
a Accounts receivable 29,400
Service revenue 29,400
Show the effect of the transaction in a horizontal statements model. The first transaction is shown as an example. (In the Cash Flow column, use OA to designate operating activity, IA for investment activity, FA for financing activity, NC for net change in cash and NA to indicate the element is not affected by the event. Enter any decreases to account balances with a minus sign.)
Answer:
S/n Account Titles Debit$ Credit$
a. Accounts receivable 29400
Service revenue 29400
b. Cash 17500
Accounts receivable 17500
c. Prepaid insurance 4400
Cash 4400
d. Accounts payable 570
Cash 570
e. Insurance expense 3700
Prepaid insurance 3700
f. Interest receivable 300
Interest revenue 300
g. Cash 9500
Unearned service revenue 9500
h. Land 1560
Cash 1560
i. Supplies 1800
Cash 1800
Asset Liabilities Equity Revenue Expense Net income S.Cash Flow
a. 29400 29400 29400 29400 NA
b. 17500 OA
-17500
c. 4400 OA
-4400
d. -570 -570 OA
e. -3700 -3700 3700 -3700 NA
f. 300 300 300 300 NA
g. 9500 9500 OA
h. 1560 IA
-1560
i. 1800 OA
-1800
(b) The citizens of this country are in general very clever people, but they are not good at multiplying by 2. This made shopping for potatoes excruciatingly difficult for many citizens. Therefore it was decided to introduce a new unit of currency, such that potatoes would be the numeraire. A sack of potatoes costs one unit of the new currency while the same relative prices apply as in the past. In terms of the new currency, what is the price of meatballs
Answer: 2 sacks of potatoes
Explanation:
In the past, meatballs cost 4 crowns per crock which was twice the price of Potatoes at 2 crowns per sack.
Now that potatoes were are the new currency but relative prices apply, the same notion above applies too.
If meatballs are twice the price of potatoes and potatoes are now the currency, then meatballs which are still twice the price of potatoes must be:
= 2 * 1 sack of potatoes
= 2 sacks of potatoes
The following information is available for the adjusting entries. Accrued interest on the notes payable at year-end amounted to $4,000 and will be paid January 1, 2022. Accrued salaries at year-end amounted to $3,000 and will be paid on January 5, 2022. Supplies remaining on hand at the end of the year equal $3,800. Problem 3-9B Part 9 9. Record closing entries.
Question Completion:
Assume that Supplies were purchased during the year worth $13,000.
Record the adjusting entries.
Answer:
Adjusting Journal Entries on December 31, 2021:
Debit Interest Expense $4,000
Credit Interest payable $4,000
To record the accrued interest on the notes payable.
Debit Salaries Expense $3,000
Credit Salaries payable $3,000
To record the accrued salaries at year end.
Debit Supplies Expense $9,200
Credit Supplies $9,200
To record supplies expense for the year.
Explanation:
a) Data and Calculations:
Supplies purchased = $13,000
Supplies at year-end = 3,800
Supplies consumed = $9,200 ($13,000 - $3,800)
b) Adjusting entries are journal entries done at the end of a financial period to ensure that expenses and revenues are matched to the period they occur instead of when cash is exchanged. This accords with the accrual concept and the matching principle of accounting.
Starbucks opened its first store in Seoul, Korea in October 2002. The price of a tall vanilla latte is 3,000 Korean Won. In New York City, the price of a tall vanilla latte is $3.00. The exchange rate between Korean Won and U.S. dollars is Won 1,150/$. According to purchasing power parity, is the Korean Won overvalued or undervalued
Answer:
The Korean Won is undervalued
Explanation:
The Korean Won is undervalued if we determine this measure by comparing the prices of the vanilla latte at a Korean Starbucks and at an American Starbucks.
If purchasing power parity was perfectly equal, the latte at the Seoul Starbucks would be priced at $3,450, because the exchange rate is 1,150/$ and $3 x 1,1150 = 3,450, $3 being the price of the latte in New York City.
We can see that the latte in Seoul only costs 3,000 Won, so, under this comparison, the Won is undervalued by 450 Won.
Pack-and-Go, a new competitor to FedEx and UPS, does intra-city package deliveries in seven major metropolitan areas. The performance of Pack-and-Go is measured by management as: (1) delivery time (relative to budgeted delivery time), (2) on-time delivery rates (defined as agreed-upon delivery date/time plus or minus a specified cushion), and (3) percentage of lost or damaged deliveries. In response to competitive pressures, Pack-and-Go is evaluating an investment in new technology that would improve customer service and delivery quality, particularly in terms of items (2) and (3) above. The annual cost of the new technology, for each of the seven metropolitan areas serviced by Pack-and-Go, is expected to be $80,000. You have gathered the following information regarding delivery performance under both existing operations and after implementing the new technology:
Decision Alernative
After Implementing
Item Current System New Technology
On-time delivery rate 80% 95%
Variable cost per package lost or damaged $30 $30
Allocated fixed cost per package lost or damaged $10 $10
Annual number of packages lost or damaged 300 100
Based on a recent marketing study commissioned by Pack-and-Go, the company estimates that each percentage point increase in the on-time performance rate would lead to an annual revenue increase of $10,000. The average contribution margin ratio for packages delivered by Pack-and-Go is estimated as 40%.
Required:
1. From a financial perspective, should pack-and-Go invest in the new technology?
2. Based on the data collected by Pack-and-Go, the company is fairly confident about the reduction in costs associated with lost or damaged packages. However, because of uncertainties in terms of pricing in the markets in which Pack-and-Go operates, it is less sure about the predicted increase in revenues associated with the implementation of the new technology. What is the break-even increase in annual revenue that would justify the investment in the new technology?
Answer:
Pack-and-Go
1. From a financial perspective, Pack-and-Go should invest in the new technology. It will enjoy a contribution margin of 97.5%.
2. The break-even increase in annual revenue that would justify the investment in the new technology is:
Fixed cost = Contribution
$80,000 = Contribution - $8,000
= $72,000 ($80,000 - $8,000
Explanation:
a) Data and Calculations:
Expected cost of new technology investment = $80,000
Delivery performance:
Decision Alternative
After Implementing
Item Current System New Technology
On-time delivery rate 80% 95%
Variable cost per package lost
or damaged $30 $30
Allocated fixed cost per
package lost or damaged $10 $10
Annual number of packages
lost or damaged 300 100
Variable cost for lost or
damaged packages $9,000 (300*$30) $3,000 (100*$30)
Fixed cost for lost or
damaged packages 3,000 (300*$10) $1,000 (100*$10)
Total cost for lost or
damaged packages $12,000 $4,000
Increase in the on-time performance rate = 95% - 80% = 15%
Increase in annual Revenue = $10,000 * 15 = $150,000
Savings from lost or damaged packages = 8,000 ($12,000 - $4,000)
Total savings from new technology = $158,000
Annual cost of new technology = (80,000)
Net savings from new technology = $78,000
Contribution margin based on net savings = $78,000/$80,000 * 100 = 97.5%
Average contribution margin = 40%
A refrigerator costs $800 on an installment plan that requires a down payment of $140 and monthly payments for 12 months. What are the monthly payments of the plan?