Pincus Associates uses the allowance method to account for bad debts. During 2021, its first year of operations, Pincus provided a total of $156,000 of services on account. In 2021, the company wrote off uncollectible accounts of $6,300. By the end of 2021, cash collections on accounts receivable totaled $132,300. Pincus estimates that 10% of the accounts receivable balance at 12/31/2021 will prove uncollectible.
Required:
1. & 2. What journal entry did Pincus record to write off uncollectible accounts during 2021 and to recognize bad debt expense for 2021? (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Journal entry worksheet
Record the write-offs of allowance for uncollectible accounts during 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
1
record to recognize bad debt expense for 2021.
Note: Enter debits before credits.
Event General Journal Debit Credit
2
Answers
Answer: the answer is given below
Explanation:
It should be noted that the account receivable ending balance was calculated as:
Credit sales = 156,000
Less: collection of account= 132,300
Less: written off = 6,300
= 17,400
The bad debt expense was calculated as:
= (17,400 × 10%) + 6300
= (17400 × 0.1) + 6300
= 1740 + 6300
= 8040
Other explanation have been attached.
Related Questions
If the price of chocolate-covered peanuts decreases from $1.15 to $0.90, the quantity demanded does not change, and other things are unchanged, the absolute value of the price elasticity of demand, using the midpoint method, is:
Answers
Answer:
price-elasticity = 0
Explanation:
The formula for mid-point elasticity will be as follows:
[tex]\frac{q_1-q_2}{\frac{q_1+q_2}{2}} \div\frac{p_1-p_2}{\frac{p_1+p_2}{2}}[/tex]
Now, as quantity did not change we get:
q1 = q2
thus q1 + q2 = 2q1
and q1 - q2 = 0
[tex]\frac{0}{\frac{2q_1}{2}} \div\frac{1.15-0.90}{\frac{1.15+0.90}{2}}[/tex]
As we are getting a zero the end result will be zero which makes complete sense as there was no change in quantity the demand is completely inelastic.
The following information is available for Flounder Corp. for the year ended December 31, 2017: Other revenues and gains Other expenses and losses Cost of goods sold Other comprehensive income $10,000 Sales revenue 14,900 Operating expenses 246,400 Sales returns and allowances 5,500 $641,300 231,800 40,000
Prepare a multiple-step income statement for Flounder Corp and comprehensive income statement. The company has a tax rate of 30%. This rate also applies to the other comprehensive income. Flounder Corp. Income Statement For the Year Ended December 31, 2017 Revenues Sales Revenue 641300 Less . Sales Returns and Allowances 40000 Net Sales $ 601300 Cost of Goods Sold 246400 Gross Profit 354900 Operating Expenses 231800 Income From Operations 123100 Other Revenues and Gains $ 10000 Other Expenses and Losses 14900
Answers
Answer:
Flounder Corp. Income Statement For the Year Ended December 31, 2017
Revenues:
Sales Revenue $ 641,300
Less Sales Returns and Allowances 40,000
Net Sales $ 601,300
Cost of Goods Sold 246,400
Gross Profit 354,900
Operating Expenses 231,800
Income From Operations $123,100
Income Tax on operations 36,930
Net Income after Income Tax $86,170
Comprehensive Income Statement:
Revenues:
Sales Revenue $ 641,300
Less Sales Returns and Allowances 40,000
Net Sales $ 601,300
Cost of Goods Sold 246,400
Gross Profit 354,900
Operating Expenses 231,800
Income From Operations $123,100
Other Revenues and Gains $ 10,000
Less other Expenses and Losses 14,900
Income from Operations &
other comprehensive income $118,200
Income Tax $35,460
Net Income after Tax $82,740
Explanation:
a) A multi-step income statement arranges the revenue and expenses sequentially in order to bring out some financial performance measurement elements, like the gross profit, income from operations, etc.
b) A Comprehensive income statement is a financial statement that includes both standard income and expenses and other comprehensive income and expenses.
In 2016, Hudson Corp. sold 3,000 units at $150.00 each. Variable expenses were $113.00 per unit, and fixed expenses were $58,240. The same variable expenses per unit and fixed expenses are expected for 2017. If the company cuts selling price by 6.00%, what is its break-even point in units for 2017?
Answers
Answer:
Break even in units (2017) = 2080 units
Explanation:
The break even point in units is the number of units where the total revenue equals total cost. It is a point of no profit and no loss. The break even point in units is calculated as follows,
Break even in units = Fixed cost / Contribution margin per unit
Contribution margin per unit = Selling price per unit - Variable cost per unit
A cut in selling price of 6% would mean that the new selling price will be,
New selling price = 150 - (150 * 0.06) = $141
Contribution margin per unit = 141 - 113 = $28
Break even in units = 58240 / 28
Break even in units (2017) = 2080 units
You own shares in Yahoo that were purchased at a price of $ 24 per share. Microsoft has offered to purchase Yahoo and buy your shares at a price of $ 34 per share. What will be your return if you tender your shares to Microsoft and the deal is completed
Answers
Answer:
Return = 41.67%
Explanation
The return on a share is the sum of e capital gains and the dividend received all expressed as a percentage of the of the amount invested.
In the absence of the payment of dividend, the return
Return = capital gain/ Price of share × 100
Capital gain= Price of shares now - cost of shares
Capital gain = 34- 24 = 10
Return = 10/24 × 100 = 41.66666667
Return (%) = 41.67%
Trudy is Jocelyn's friend. Trudy looks after Jocelyn's four-year-old son during the day so Jocelyn can go to work. During the year, Jocelyn paid Trudy $4,180 to care for her son. What is the amount of Jocelyn's child and dependent care credit if her AGI for the year was $31,800
Answers
Answer:
The answer is $810
Explanation:
Solution
Child and dependent care credit is certain percentage of qualifying care expenses based on the adjusted gross income. The maximum qualifying amount of daycare expenses is $3,000 per qualifying person.
Now from this example, Jocelyn had paid $4,180 to take care of her son and so,the qualifying amount of care expenses will be $3,000.
Since GI for the year is $31,800, the child and dependent care credit will be 27% of the qualifying care expenses that is,. $3,000 * 27% = $810
Burrito King (a new fast-food franchise opening up nationwide) has successfully automated burrito production for its drive-up fast-food establishments. The Burro-Master 9000 requires a constant 30 seconds to produce a batch of burritos. It has been estimated that customers will arrive at the drive-up window according to a Poisson distribution at an average of one every 45 seconds. To help determine the amount of space needed for the line at the drive-up window
A. What is the average line length (in cars)?
B. What is the average number of cars in the system (both in line and at the window)?
C. What is the expected average time in the system?
Answers
Answer:
(A)0.6600 (B) 1.325 (C) 0.997 or 1 minute
Explanation:
Solution
Given that:
The constant rate = 30 seconds
The arrival rate according to Poisson distribution is = 45 seconds
Now,
(A) We solve for the average length line of cars
The formula is given below:
Lq = λ²/ 2μ ( μ -λ)
Here,
λ = this is the mean time of arrival rate
μ = This is the mean service rate
Thus we compute for the mean time arrival rate which is given below:
The mean arrival rate λ = arrival rate/ 60 seconds
= 60/45
= 1.33 customer per minute
Then we solve for the means service rate which is given below
The mean service rate μ = 60 seconds/ mean rate
= 60/30 = 2 customer per minute
We will now solve for the average line length in cars which is shown below:
Lq = λ²/ 2μ ( μ -λ)
Lq = 1.33²/2*2 (2-1.33)
Lq = 1.7689/4 (0.67)
Lq = 1.7689/2.68
Lq = 0.6600
Therefore the average length in line for cars is 0.6600 cars
(B) We solve for the average number of cars in the system
Ls =Lq + λ /μ
Ls =0.600 + 1.33/2
Ls =0.6600 + 0.665
Ls = 1.325
(C) Finally we need to find the expected average time in the system which is shown below:
Ws = Ls/λ
Ws= 1.325/1.33 = 0.997 or 1.00
The expected time average in the system is 0.997 or 1.00 minutes.
(A) The average length in line for cars is 0.6600 cars
(B) Ls = 1.325
(C)The predicted time standard in the system is 0.997 or 1.00 minutes.
What is Average Time?The constant rate = 30 seconds
The arrival rate according to Poisson disbandment is = 45 seconds
(A) We solve for the average stature line of cars
The formula is given below:
Lq = λ²/ 2μ ( μ -λ)
Here,
λ = this is the meantime of arrival rate
μ = This is the mean service rate
Thus we compute for the meantime arrival rate which is given below:
The mean formation rate λ = arrival rate/ 60 seconds
= 60/45
= 1.33 customer per minute
Then we solve for the concessions service rate which is given below
The mean service rate μ = 60 seconds/ mean rate
= 60/30 = 2 consumer per minute
We will now solve for the average line length in cars which is shown below:
Lq = λ²/ 2μ ( μ -λ)
Lq = 1.33²/2*2 (2-1.33)
Lq = 1.7689/4 (0.67)
Lq = 1.7689/2.68
Lq = 0.6600
Hence the average length in line for cars is 0.6600 cars
(B) We solve for the average number of cars in the system
Ls =Lq + λ /μ
Ls =0.600 + 1.33/2
Ls =0.6600 + 0.665
Ls = 1.325
(C) Finally we need to find the anticipated average time in the system which is shown below:
Ws = Ls/λ
Ws= 1.325/1.33 = 0.997 or 1.00
The predicted time standard in the system is 0.997 or 1.00 minutes.
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At NikeID, you can design your own athletic shoes by selecting the material, choosing the color and even adding other personal touches. This method of using machines to do multiple tasks to produce a variety of products is known as _______ manufacturing.
Answers
Answer: flexible manufacturing
Explanation: Flexible manufacturing is the type of manufacturing system employed at NikelD, wherein customers through customization can design their own athletic shoes. As such, there is usually equipment and computerized systems configured to manufacture a variety of parts and handling changing levels of production. Doing this serves to improve efficiency while lowering the company's production costs significantly and is a characteristic feature of make-to-order strategies requiring a high degree of customization by customers. This system of manufacturing also creates a method of production designed to adapt to changes in the type and quantity of the product being manufactured very easily.
Waterway Enterprises reported cost of goods sold for 2020 of $1,385,600 and retained earnings of $5,415,900 at December 31, 2020. Waterway later discovered that its ending inventories at December 31, 2019 and 2020, were overstated by $103,320 and $38,040, respectively. Determine the corrected amounts for 2020 cost of goods sold and December 31, 2020, retained earnings.
Answers
Answer:
b. Corrected 2020 cost of goods sold = $ 1,320,320.
b. Corrected retained earnings = $5,377,860.
Explanation:
a. Determine the corrected amounts for 2020 cost of goods sold
An overstatement of the beginning inventory has to be deducted from the reported cost of good sold since the amount of the overstatement was added to the cost of goods sold initially.
On the other hand, an overstatement of the ending inventory has to be added to the reported cost of good sold since the amount of the overstatement was deducted to the cost of goods sold initially.
Therefor, we have:
Corrected 2020 cost of goods sold = $1,385,600 - $103,320 + $38,040 = $ 1,320,320.
b. Determine the corrected amounts for December 31, 2020, retained earnings
In this case, the amount of overstatement of the ending inventory has to be deducted from the reported retained earning since the retained earning was initially overstated by that amount.
Therefore, we have:
Corrected retained earnings = $5,415,900 - $38,040 = $5,377,860
You are considering buying common stock in Grow On, Inc. The firm yesterday paid a dividend of $7.80. You have projected that dividends will grow at a rate of 9.0% per year indefinitely. If you want an annual return of 24.0%, what is the most you should pay for the stock now
Answers
Answer:
The answer is $56.68
Explanation:
Solution
We recall that:
The firm paid a dividend of =$7.80
The projected growth of dividends is at a rate = 9.0%
The annual return = 24.0%
Now,
V = ($7.80 * (1.09)/(.24 - 0.9)
= (8.502)/(.24-0.9)
= (8.502) * (-0.66)
= $56.68
Therefore, this would be the most we would pay for the stock. If we paid less than that, our return would be above the 24%.
If a fixed asset, such as a computer, were purchased on January 1st for $1,832.00 with an estimated life of 6 years and a salvage or residual value of $123.00, what is the journal entry for monthly expense under straight-line depreciation?
Answers
Answer:
Dr depreciation expense $ 23.74
Cr accumulated depreciation $ 23.74
Explanation:
The depreciation per month would be first thing to determine:
Yearly depreciation =Cost of asset-residual value/useful life
cost of asset is $1,832.00
residual value which is disposal value at the end of useful life is $123.00
Useful life is 6 years
yearly depreciation charge= ($1,832.00-$123.00)/6=$ 284.83
Monthly depreciation expense=yearly depreciation charge/12=$284.83/12=$23.74
The journal entry monthly would be a debit to depreciation expense and a credit to accumulated depreciation
2. Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Answers
Answer:
Buckeye Industries has a bond issue with a face value of $1000. The value of Buckeye’s asset is $1200. In one year they will be worth either $800 or $1400. The going rate on T-bill is 4 percent. What is the value of debt, equity, and interest rate on debt?
Explanation:
Find the present value of $10,000 received at the start of every year for 20 years if the interest rate is J1 = 12% p.a. and if the first payment of $10,000 is received at the end of 10 years
Answers
Answer:
$ 26,935.56
Explanation:
The key to this question is that present value of those cash flows in year ten is the future value today.
PV=PMT*(1/i-1/i*(1+i)^n)*(1+i)
PMT is the annual amount receivable which is $10,000
i is 12% or 0.12
n is 20 years
1/i*(1+i)^=1/0.12*(1+0.12)^20=1/(0.12*9.646293093 )=0.863889709
1/i=1/0.12=8.333333333
1+i=1+0.12=1.12
PV=10,000*(8.333333333 -0.863889709 )*1.12
PV=10,000*7.469443624*1.12=$83,657.77
The PV In ten years' time is future value today, hence we need to discount that future value to today's terms
PV=FV*(1+r)^-n
n is ten
r is 12%
PV=$83,657.77*(1+12%)^-10=$ 26,935.56
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies raskels, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods. Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of cannes sold increases by 5%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and raskels, and then between guppy gummies and cannies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies. Relative to Guppy Gummies Cross-Price Elasticity of Demand Complement or Substitute Recommend Marketing with Guppy Gummies Raskels Cannies
Answers
Answer:
See explanation below
Explanation:
Here, when the price of guppy gummies increases by 5%, the quantity of raskels sold decreases by 4% and the quantity of cannes sold increases by 5%.
i.e, % change in price of guppy grummies = 5%
% change in quantity of raskels = -4%
% change in quantity of cannes = 5%
i) Find the Cross price elasticity of demand between guppy grummies and raskels. Use the expression below.
% change in quantity demanded of raskels / % change in price of guppy gummies
= -4% / 5%
= -0.8
Substitute goods have a negative cross price elasticity of demand. Since, the cross price elasticity of demamd here is negative, the goods are substitute.
It is recommended not to advertise raskels with guppy grummies
ii) Find the Cross price elasticity of demand between guppy grummies and cannes. Use the expression below.
% change in quantity demanded of cannes / % change in price of guppy gummies
= 5% / 5%
= 1
Complement goods have a positive cross price elasticity of demand. Since, the cross price elasticity of demamd here is positive, the goods complement each other.
It is recommended to advertise cannes with guppy grummies.
You purchased GARP stock one year ago at a price of $67.67 per share. Today, you sold your stock and earned a total return of 18.79 percent. The stock paid dividends of$2.92 per share over the year. What was the capital gains yield on your investment
Answers
Answer:
14.48%
Explanation:
The capital gains yield on the investment is increase in share price divided by the initial price paid to acquire the share a year ago.
The total return formula can be used to figure the price the stock was when sold as below:
total return =P1-Po+D/Po
P1 is the current price which is unknown
Po is the initial price of $67.67
total return is 18.79%
D is the dividend of $2.92
0.1879=P1-67.67+2.92/67.67
0.1879*67.67=P1-64.75
12.72=P1-64.75
P1=12.72+64.75
P1=77.47
Capital gains yield=(77.47 -67.67)/67.67=14.48%
A local theater company sells 1,500 season ticket packages at a price of $250 per package. The first show in the 10-show season starts this week. (a) The sale of the season tickets before the first show. (b) The revenue from fulfilling the performance obligation by putting on the first show.
Answers
Answer:
Dr cash $375,000
Cr unearned revenue $375,000
Dr unearned revenue $37,500
Cr revenue $37,500
Explanation:
The total amount realized from the sale of tickets is $375,000($250*1500)
However,the cash proceeds should be debited to cash while it is also credited to unearned revenue
The revenue from fulfilling the performance obligation=1/10*$375,000=$37,500
The $37,500 is debited to unearned revenue and credited to sales revenue as that amount has now been earned
a) The cash realized from the sale for all the season tickets is $375,000.
b) The revenue to be recognized after fulfilling the performance obligation of the first show is $37,500.
Data and Calculations:
Selling price per ticket package = $250
Number of ticket packages sold = 1,500
Number of show seasons = 10
On the average, each show season will take = 150 tickets (1,500/10)
Proceeds from sale of season tickets = $375,000 ($250 x 1,500)
Revenue from first show = $37,500 ($375,000/10) or (150 x $250)
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Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40?
Answers
The question is incomplete. Here is the complete question
Suppose the demand for Digital Video Recorders (DVRs) is given by Q = 250 - .25p + 4pc, where Q is the quantity of DVRs demanded (in 1000s), p is the price of a DVR, and pc is the price of cable television. How much does the quantity demanded for DVRs change if the p rises by $40? A) drops by 10,000 DVRs B) increases by 16,000 DVRs C) drops by 2,500 DVRs D) increases by 4,000
Answer:
Drops by 10,000 DVRs
Explanation:
The demand for digital video recorders is expressed by
Q= 250- .25p+4pc
Where
Q represents the quantity demanded by the customers
P represents the price of DVR
pc represents the price of cable television
Since the factor of p in the expression above is negative, this implies that the quantity of DVR demanded in the market will reduce
If the price of DVR increase by $40, then the quantity demanded will reduce by
= 0.25×40×1000
= 10×1000
= 10,000 units
Hence the quantity of DVRs drops by 10,000 DVRs if the price is increased to $40
Ataxia Fitness Center is considering an investment in some additional weight training equipment. The equipment has an estimated useful life of 4 years with no salvage value at the end of the 4 years. Ataxia's internal rate of return on this equipment is 5%. Ataxia's discount rate is also 5%. The payback period on this equipment is closest to (Ignore income taxes.):
Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factorfs) using the tables provided.
a. 4 years
b. 3.55 years
c. 2.00 years
d. 4.65 years
Answers
Answer:
b. 3.55 years
Explanation:
The payback period is basically the amount of time an investor needs to recover his/her initial investment.
lets assume initial investment = $1,000
when you calculate IRR, the present value of the cash flows = initial investment
the present value of an annuity for 4 years and 5% is 3.5460
$1,000 = yearly cash flow x 3.546
yearly cash flow = $1,000 / 3.546 = $282
payback period = $1,000 / 282 = 3.546 years ≈ 3.55 years
How can economies of scale benefit you as a customer and society as a whole? Can the taxicab industry, in large cities, be subject to significant economies of scale? Are ride-sharing services, such as Uber and Lyft, able to take advantage of economies of scale? How or why not?
Answers
Answer:
The answer to this question can be described as follows:
Explanation:
The economy scale with cost activity and total volumes of sales, which lowers the overall product prices as a result, and grows all economies of scale, because consumers purchase the stuff like those, who pay even less than the amount they expect to receive.
It is the transition, the same saved money it's spent on other commodities and the overall deficit as well as the actual boosting of financial social assistance that generates income as a whole. It also increases outlays and creates more jobs, and benefits people with higher median income levels and a decent standard of living, For example
Uber often encourages ride-sharing, in which the car is capable of serving 3-4 people simultaneously. This gives a win-win situation to all sides and generates economies of scale. Throughout the market like India, Uber already is introducing it and being extremely successful.
Logan Company can sell all of the standard and premier products they can produce, but it has limited production capacity. It can produce 8 standard units per hour or 4 premier units per hour, and it has 36,600 production hours available. Contribution margin per unit is $20.00 for the standard product and $23.00 for the premier product. What is the total contribution margin if Logan chooses the most profitable sales mix
Answers
Answer:
The most profitable sales mix is 288,000 standard units and 0 premier units.
Explanation:
8 standard units per hour
4 premier units per hour
36,600 production hours available
For standard units, contribution margin per hour = 8 x $20 = $160
For premier units, contribution margin per hour = 4 x $23 = $92
Therefore, most profitable sales mix = 36,000 hours x 8 units per hour of standard product
= 288,000 standard units and 0 premier units.
James is the landlord of an apartment containing 22 houses which are to be maintained by him and Lily is one of the tenants. In which of the following cases would the tenant be liable for an injury occurring on the leased premises?A) James was negligent in repairing the broken step on which Lily tripped and broke her ankle.B) Lily's nephew cut his finger with the knife that was negligently kept in Lily's kitchen.C) A little child at the apartment almost choked himself by consuming the paint that was chipping off the common wall between Lily's apartment and her neighbor's.D) The entire apartment caught fire and the fire extinguisher could not be used since it was installed only in Lily's rented house and she was out shopping.E) Lily's visitor got into the common lift in the apartment that suddenly crashed leading to severe injuries to Lily's visi
Answers
Answer: B) Lily's nephew cut his finger with the knife that was negligently kept in Lily's kitchen.
Explanation:
James as the landlord will be responsible for the structural or other defects of the house so long as it is the house that is the problem.
Activities that go on inside a tenants house that are caused by the actions of the tenants will not be a liability on the path of the landlord.
If an elevator is damaged or there weren't enough fire extinguishers or there was a broken step or poor quality paint was used, these are all defects related to the house itself and as such will result in negligence on the part of the landlord.
A child getting injured by a knife that Lily as a tenant left, in her apartment will.be the fault of Lily and the negligence can only be on her because it was due to actions by her as a tenant in her leased property.
Sterile Feral, Inc. is a nonprofit organization that catches wild or stray cats, and then neuters, vaccinates, and releases them back into the wild. In recent years, nonprofit organizations such as Sterile Feral have turned to marketing to help:__________.
a. receive additional government funding.
b. expand its business to stray dogs.
c. maintain its nonprofit status.
d. achieve organizational goals.
e. compete with other similar organizations.
Answers
Answer:
d. achieve organizational goals.
Explanation:
Sterile Feral, Inc. being a non-profit organization that catches wild or stray cats, and then neuters, vaccinates, and releases them back into the wild.
If Sterile Feral Inc. then turns to marketing, this simply means that they're more interested in achieving organizational goals of saving endangered cats.
Also, as a non-profit organization, Sterile Feral Inc. isn't operating solely to make money or profits, it is rather literally trying to impact positively the cat world.
Crowding out is associated with:
a. an increase in business investment resulting from an increase in government borrowing and higher interest rates.
b. a reduction in business investment resulting from an increase in government borrowing and higher interest rates.
c. an increase in private savings caused by higher future tax liabilities when government increases borrowing.
d. a decrease in government spending caused by a shortage of available credit.
Answers
Answer:
b. a reduction in business investment resulting from an increase in government borrowing and higher interest rates.
Explanation:
According to the crowding out theory, when there is an increase in government spending, private spending would be reduced.
When the government borrows, real interest rate would increase and this would reduce private sector spending.
I hope my answer helps you
Sweet, Inc. issued a $140,000, 4-year, 12% note at face value to Flint Hills Bank on January 1, 2017, and received $140,000 cash. The note requires annual interest payments each December 31.
Required:
Prepare Coldwell's journal entry record:
a. the issuance of the note
b. the December 31 interest payment.
Answers
Answer:
The double entry is given below alongwith its explanation
Explanation:
On January 1, 2017, the receipt of money by the issuance of the 12% note would be recorded as increase in liability which would be credited and increase in cash receipt is increase in asset which must be debited. The entry to record the issuance of note is as under:
Dr Cash $140,000
Cr Loan Note $140,000
On December 31, 2017, the Payment of interest of 12% on note would be recorded as increase in expense which must be debited and decrease in cash due to payment is decrease in asset and it must be credited. The entry to record the payment of interest is as under:
Dr Interest Expense $16,800
Cr Cash Account $16,800
Moody Corporation uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates: Machine-hours required to support estimated production 157,000 Fixed manufacturing overhead cost $ 650,000 Variable manufacturing overhead cost per machine-hour $ 4.40 Required: 1. Compute the plantwide predetermined overhead rate. 2. During the year, Job 400 was started and completed. The following information was available with respect to this job: Direct materials $ 320 Direct labor cost $ 230 Machine-hours used 37 Compute the total manufacturing cost assigned to Job 400. 3. If Job 400 includes 50 units, what is the unit product cost for this job
Answers
Answer:
Instructions are below.
Explanation:
Giving the following information:
Estimated machine-hours= 157,000
Estimated fixed manufacturing overhead= $650,000
Variable manufacturing overhead cost per machine-hour $4.40
First, we need to calculate the predetermined overehad rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= (650,000/157,000) + 4.4
Predetermined manufacturing overhead rate= $8.54 per machine-hour
Job 400:
Direct materials $320
Direct labor cost $230
Machine-hours used 37
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated overhead= 8.54*37= $315.98
Finally, we need to determine the unitary cost for Job 400:
Total cost= 320 + 230 + 315.98= $865.98
Unitary cost= 865.98/50= $17.32
Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each other’s management practices. They are happy, however, to be organizing a business together in order to avoid full liability for the business. Which detail of this situation is a good reason for Mario and Johnny to create a general partnership?
A) Unfamilar with each other's managment practices
B) Avoiding full liability
C) Little Capital
D) Sharing profits
Answers
Answer:
All Options ..... if not possible then D) Sharing profits
Explanation:
A General Parnership refers to a business arrangement in which the individuals agree to share all the as assets, profits, and financial and legal liabilities of a jointly-owned business. Therefore in this scenario all of the options listed are valid reasons to want to create a general partnership between Mario and Johnny, but if only one option can be chosen then the best reason would be Sharing profits. That is because the entire reason for starting a business is to make money, and thus protecting your entitled profits is the most important.
Crazy Mountain Outfitters Co., an outfitter store for fishing treks, prepared the following unadjusted trial balance at the end of its first year of operations:
Crazy Mountain Outfitters Co. Unadjusted Trial Balance April 30, 20Y5
Debit Balances Credit Balances
Cash 11,400
Accounts Receivable 72,600
Supplies 7,200
Equipment 112,000
Accounts Payable 12,200
Unearned Fees 19,200
Common Stock 20,000
Retained Earnings 117,800
Dividends 10,000
Fees Earned 305,800
Wages Expense 157,800
Rent Expense 55,000
Utilities Expense 42,000
Miscellaneous Expense 7,000
475,000 475,000
For preparing the adjusting entries, the following data were assembled:
a. Supplies on hand on April 30 were $1,380.
b. Fees earned but unbilled on April 30 were $3,900.
c. Depreciation of equipment was estimated to be $3,000 for the year.
d. Unpaid wages accrued on April 30 were $2,475.
e. The balance in unearned fees represented the April 1 receipt in advance for services to be provided. Only $14,140 of the services was provided between April 1 and April 30.
Required:
1. Journalize the adjusting entries necessary on April 30. 2016.
2. Determine the revenues, expenses, and net income of Crazy Mountain Outfitters before the adjusting entries.
3. Determine the revenues, expense, and net income of Crazy Mountain Outfitters G after the adjusting entries.
4. Determine the effect of the adjusting entries on Retained Earnings.
Answers
Answer:
Required 1.
a.
Supplies Inventory $1,380 (debit)
Income Statement $1,380 (credit)
b.
Cash $3,900 (debit)
Un-earned Fees $3,900 (credit)
c.
Depreciation $3,000 (debit)
Accumulated Depreciation $3,000 (credit)
d.
Wages Expenses $2,475 (debit)
Wages Accrued $2,475 (credit)
e.
Unearned Fees $14,140 (debit)
Fees Earned $14,140 (credit)
Required 2.
Fees Earned 305,800
Less Expenses :
Wages Expense (157,800)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Net Income / (loss) 44,000
Required 3.
Fees Earned (305,800 + 14,140) 319,940
Less Expenses :
Wages Expense (157,800 + 2,475) (160,275)
Rent Expense (55,000 )
Utilities Expense (42,000 )
Miscellaneous Expense (7,000)
Depreciation (3,000)
Net Income / (loss) 52,665
Required 4.
Effect = Increase by $8,665
Explanation:
Required 3.
Make the following Adjustments :
Increase the Fees EarnedIncrease the Wages ExpenseInclude the Depreciation Expense in Net Income calculation.Required 4
Adjust the Retained Earnings with items affecting the Income Statement.
Retained Earnings $117,800
Less Depreciation Expense ($3,000)
Less Wages Accrued ($2,475)
Add Fees Earned $14,140
Adjusted Retained Earnings $126,465
Conclusion :
Effect = Increase
Amount = $126,465 - $117,800 = $8,665
Bluebird Mfg. has received a special one-time order for 15,000 bird feeders at $3.50 per unit. Bluebird currently produces and sells 75,000 units at $7.50 each. This level represents 80% of its capacity. These bird feeders would be marketed under the wholesaler's name and would not affect Bluebird's sales through its normal channels. Production costs for these units are $4.25 per unit, which includes $2.50 variable cost and $1.75 fixed cost. If Bluebird accepts this additional business, the effect on net income will be:
Answers
Answer:
Effect on income= $15,000 increase
Explanation:
Giving the following information:
Offer= 15,000 bird feeders at $3.50 per unit.
Production costs:
$2.50 variable cost
Because it is a special offer that won't affect actual sales and there is unused capacity, we will not take into account the fixed costs.
Effect on income= 15,000*(3.5 - 2.5)
Effect on income= $15,000 increase
The following inventory balances relate to Lequin Manufacturing Corporation at the beginning and end of the year: Beginning Ending Raw materials $14,000 $19,000 Work in process $31,000 $7,000 Finished goods $25,000 $23,000 Lequin's total manufacturing cost was $543,000. What was Lequin's cost of goods sold?
Answers
Answer:
Cost of goods sold = $564,000
Explanation:
The cost of goods sold would be determined as follows:
$
Opening inventory
Raw material = 14,000
Work in progress 31,000
Manufacturing cost 543,000
588,000
Add open inventory of Finished goods 25,000
Less Closing inventory
raw material ( 19,000)
Work in progress ( 7,000)
Total cost of goods available for sale 587,000
Less closing inventory of finished goods 23,000
Cost of goods sold 564,000
Note that the opening inventory of raw material and work in progress would increase the manufacturing cost while their respective closing inventory represent cost incurred on production during the period on inventories not yet completed
Valley Technology Balance Sheet As of March 11, 2020 (amounts in thousands) Cash 9,700 Accounts Payable 1,500 Accounts Receivable 4,500 Debt 2,900 Inventory 3,800 Other Liabilities 800 Property Plant & Equipment 16,400 Total Liabilities 5,200 Other Assets 1,700 Paid-In Capital 7,300 Retained Earnings 23,600 Total Equity 30,900 Total Assets 36,100 Total Liabilities & Equity 36,100 Use T-accounts to record the transactions below, which occur on March 12, 2020, close the T-accounts, and construct a balance sheet to answer the question. 1. Buy $15,000 worth of manufacturing supplies on credit 2. Issue $85,000 in stock 3. Borrow $63,000 from a bank 4. Pay $5,000 owed to a supplier 5. Receive payment of $12,000 owed by a customer What is the final amount in Total Liabilities?
Answers
Answer:
total liabilities = accounts payable $11,500 + unearned revenue $7,500 + debt $65,900 + other liabilities $800 = $85,700
Explanation:
Cash 9,700 Accounts Payable 1,500 Accounts Receivable 4,500 Debt 2,900 Inventory 3,800 Other Liabilities 800 Property Plant & Equipment 16,400 Total Liabilities 5,200 Other Assets 1,700 Paid-In Capital 7,300 Retained Earnings 23,600 Total Equity 30,900 Total Assets 36,100 Total Liabilities & Equity 36,100
1. Buy $15,000 worth of manufacturing supplies on credit
Supplies Accounts payable
debit credit debit credit
15,000 1,500
15,000
16,500
2. Issue $85,000 in stock
Cash Paid-In Capital
debit credit debit credit
9,700 7,300
85,000 85,000
94,700 92,300
3. Borrow $63,000 from a bank
Cash Debt
debit credit debit credit
94,700 2,900
63,000 63,000
157,700 65,900
4. Pay $5,000 owed to a supplier
Cash Accounts payable
debit credit debit credit
157,700 16,500
5,000 5,000
152,700 11,500
5. Receive payment of $12,000 owed by a customer
Cash Accounts receivable
debit credit debit credit
152,700 4,500
12,000 12,000
164,700 7,500
Due to some strange reason, accounts receivable has a debit balance (= $4,500 - $12,000). Since that is not possible, the remaining part $7,500 must be included under unearned revenue:
Accounts receivable Unearned revenue
debit credit debit credit
7,500 0
7,500 7,500
0 0 7,500
A small business produces a single product and reports the following data: Sales price $ 8.50 per unit Variable cost $ 5.30 per unit Fixed cost $ 21 comma 000 per month Volume 10 comma 000 units per month The company believes that the volume will go up to 13 comma 000 units if the company reduces its sales price to $ 7.25. How would this change affect operating income?
Answers
Answer:
If the current price is reduced from $8.50 to $7.25 per unit, operating income will decrease by $6,650 (from $11,000 to $4,350). This happens because variable costs will increase dramatically while total revenue will only increase a little.
Explanation:
current revenue = $8.50 x 10,000 = $85,000
- variable costs = $5.30 x 10,000 = ($53,000)
- fixed costs = ($21,000)
operating income = $11,000
alternative price = $7.25 x 13,000 = $94,250
- variable costs = $5.30 x 13,000 = ($68,900)
- fixed costs = ($21,000)
operating income = $4,350
