Answer:
Escalation
Explanation:
Escalation defines that the higher authority will communicate to the client or customer after communicate with the customer representative.
Just take an example,
Suppose a customer complains in customer care regarding the laptop freezing problem, the customer representative is not able to manage the problem so he or she should forward to the escalation team i.e higher authority that represents they have greater experience for handling the call.
Use the following information for the Exercises below. [The following information applies to the questions displayed below.] Hart Company made 3,400 bookshelves using 22,400 board feet of wood costing $315,840. The company's direct materials standards for one bookshelf are 8 board feet of wood at $14.00 per board foot. Exercise 23-14A Recording and closing materials variances LO P6 Hart Company uses a standard costing system.
(1) Prepare the journal entry to charge direct materials costs to Work in Process Inventory and record the materials variances.
(2) Assume that Hart's materials variances are the only variances accumulated in the accounting period and that they are immaterial. Prepare the adjusting journal entry to close the variance accounts at period-end.
Answer and Explanation:
The Journal entries is shown below:-
1. Goods in Process Inventory Dr, (3,400 × 8 × $14) $380,800
Direct Materials Price Variance $2,240
$22,400 × ($14.00 - $315,840 ÷ $22,400))
To Direct Materials Quantity Variance $67,200
$14.00 × ((3,400 × 8) - 22,400)
To Raw Materials Inventory $315,840
(Being direct material charged is recorded)
2. Direct Materials Quantity Variance $67,200
To Direct Materials Price Variance $2,240
To Cost of Goods Sold $64,960
(being the closing is recorded)
All of the following statements regarding stock dividends are true except : A. Stock dividends provide evidence of management's confidence that the company is doing well. B. Directors can use stock dividends to keep the market price of the stock affordable. C. Stock dividends decrease the number of shares outstanding. D. Stock dividends do not reduce assets or equity. E. Stock dividends transfer a portion of equity from retained earnings to contributed capital.
Answer: Stock dividends decrease the number of shares outstanding.
Explanation:
A stock dividend does not affect the total equity, but rather the transfer amounts that exists between the components of the equity.
Stock dividends also shows evidence of the confidence of the management that the company is doing well and that the directors can use it to keep market price of stock affordable.
The option that Stock dividends decrease the number of shares outstanding is not true.
Helen worked for ABC Motors for 25 years. The president of ABC said to her: "In consideration of your past service for 25 years, I promise to give you a new car next week." However, he did not give the car. Is this promise legally enforceable
Answer:
No, legal consideration is absent
Explanation:
According to the given situation, the President of ABC company was promised to Helen to give a new car next week as Helen worked for 25 years. But the president did not give the car as he promised to the Helen.
In this case, there was a promise which was verbal, not in the way of legal consideration, which means there is no proof so that Helen can claim from the president.
Therefore the correct answer is No, legal consideration is absent
A company is considering the purchase of a new machine for $49,000. Management predicts that the machine can produce sales of $16,100 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhead totaling $7,900 per year including depreciation of $4,100 per year. Income tax expense is $3,280 per year based on a tax rate of 40%. What is the payback period for the new machine?
Answer:
7.47 years
Explanation:
Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.
= amount invested / cash flows
To derive cash flow: (S - C - D) x (1 - t) + D
S = sales = $16,100
C = Cost of goods sold = $7,900
D = deprecation = $4,100
T = tax = 40%
$16,100 - $7,900 - $4,100 = $4100
$4100 × 0.6 = $2460
$2460 + $4,100 = $6560
$49,000 / $6560 = 7.47 years
I hope my answer helps you
Sydney Retailing (buyer) and Troy Wholesalers (seller) enter into the following transactions. May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise. 12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737. 20 Sydney pays Troy for the amount owed. Troy receives the cash immediately. (Both Sydney and Troy use a perpetual inventory system and the gross method.) 1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions. 2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions g g
Answer:
1. Prepare journal entries that Sydney Retailing (buyer) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise purchased on account, terms 3/10, n/90
Dr Merchandise inventory 39,500
Cr Accounts payable 39,500
May 11, freight costs
Dr Merchandise inventory 470
Cr Cash 470
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Accounts payable 1,100
Cr Merchandise inventory 1,100
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Accounts payable 38,400
Cr Cash 37,248
Cr Purchase discounts 1,152
2. Prepare journal entries that Troy Wholesalers (seller) records for these three transactions.
May 11 Sydney accepts delivery of $39,500 of merchandise it purchases for resale from Troy: invoice dated May 11; terms 3/10, n/90; FOB shipping point. The goods cost Troy $26,465. Sydney pays $470 cash to Express Shipping for delivery charges on the merchandise.
May 11, merchandise sold on account, terms 3/10, n/90
Dr Accounts receivable 39,500
Cr Sales revenue 39,500
Dr Cost of goods sold 26,465
Cr Merchandise inventory 26,465
12 Sydney returns $1,100 of the $39,500 of goods to Troy, who receives them the same day and restores them to its inventory. The returned goods had cost Troy $737.
May 12, merchandise is returned
Dr Sales revenue 1,100
Cr Accounts receivable 1,100
Dr Merchandise inventory 737
Cr Accounts receivable 737
20 Sydney pays Troy for the amount owed. Troy receives the cash immediately.
May 20, invoice is paid
Dr Cash 37,248
Dr Sales discounts 1,152
Cr Accounts receivable 38,400
When deleting a check all of the following is true except: Multiple Choice It is better to delete the check than void the check in order to erase all records of the transaction The deleted check no longer appears in the check register QuickBooks changes the amount deducted in the check register to zero All of the choices are correct
Answer: It is better to delete the check than void the check in order to erase all records of the transaction
Explanation:
When a check is deleted, it should be noted that such check is being removed entirely from the system and also the transaction of the check will no longer be visible anywhere in the system.
Voiding a check mean that the amount of the transaction on the check will be changed to zero but it should be ited that a record of such transaction will still be kept in QuickBooks but deleting it will help remove the transaction in QuickBooks.
When a check is voided, the check details like the check number, account, payee, memo and date will be unchanged, even though the amount will change to zero.
Therefore, the option that says that it is better to delete the check than void the check in order to erase all records of the transaction isn't true.
Elias is a risk-averse investor. David is a less risk-averse investor than Elias. Therefore, Group of answer choices for the same risk, Elias requires a lower rate of return than David. for the same return, David tolerates higher risk than Elias. Cannot be determined. for the same risk, David requires a higher rate of return than Elias. for the same return, Elias tolerates higher risk than David.
Answer:
for the same return, David tolerates higher risk than Elias
Explanation:
The risk averse investor means that investors who know about the risk due to which they prefer less returns as compared with the risk i.e unknown
Therefore in the given case it is given that David is less risk averse investor as compared with Elias therefore for the same return David would be in high risk position as compared with the Elias due to risk averse condition
Hence, the second option is correct
Among the responsibility centres listed, which type of responsibility centre is most likely to use "Growth in Sales" as a performance measure
Answer:
C. Revenue
Explanation:
Growth in sales is an important metric in determining revenue for an organization. It is the ability of an organization or a team within the organization to increase its revenue over a period of time. Most business managers measure the revenue generated through the growth in sales. To achieve growth in sales, sales teams would need to set monthly, quarterly, and yearly targets for themselves.
An increase in sales growth, which is directly proportional to an increase in revenue, assures the stakeholders in a business that there is progress and that the organization is thriving.
You know that the assets of a firm BIG are today worth 100mil. You reasonably feel that in a year they will be either worth 110mil or 90mil. You also know that a riskless zero coupon bond maturing in one year is offering today a yield of 5%. The firm has issued a zero-coupon bond that matures in one year and has a face value of 100mil. 1. What should be the value of this corporate bond today? 2. What should be its yield to maturity? 3. What should be the value of the equity of the firm? 4. Can you do a further analysis of this problem?
Answer:
(1) 95.23 (2)5.008% or 5% (3) The value of equity is zero (4)The future value of the firm will be 110 mil. than Firm equity will be 110-100 =10 mil not zero
Explanation:
Solution
Given that:
The worth in good in this example= 110 mil
Worth in bad in this example =90 mil
The future value =( 110+90)/2
=100
Future value = 100
Now
(1) The Present value = F/(1+r)^n
=100/1.05
=95.23
(2) the yield to maturity is given below:
YTM = (FV/PV)^n -1
Here
FV = future value
PV = present value
n=years
Thus
(100/95.23)^1 -1
=5.008% or 5%
Since the bond are zero coupon bond so interest rate is equal to YTM
(3) The total worth =100 mil
Thus
The Debt +equity =100
100+equity =100
Equity =100-100
=0
Hence the value of equity is zero.
The firm BIG is only debt firm. Firm do not have equity.
(4) The future value of the firm will be 110 mil. than Firm equity will be 110-100
=10 mil not zero
XYZ Company received $18,000 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is
Answer:
Dr Rent revenue
Cr Unearned rent revenue, $4,500
Explanation:
Preparation of XYZ Company Journal entry
Since we were told that the Company received the amount of $18,000 on April 1, 2020 for a one year's rent paid in advance in which the transaction has a credit to a nominal account, this means we have to record the transaction by Debiting Rent revenue with 4,500 and Crediting Unearned rent revenue, with the same amount of $4,500 calculated as
(3/12 x $18,000 ).
Dr Rent revenue
Cr Unearned rent revenue, $4,500
(3/12 x $18,000 )
A company issued 6-year, 8% bonds with a par value of $450,000. The market rate when the bonds were issued was 7.5%. The company received $454,500 cash for the bonds. Using the straight-line method, the amount of recorded interest expense for the first semiannual interest period is:
Answer:
$17,667
Explanation:
Premium on bonds
= $454,000 - $450,000
= $4,000
Cash interest paid
= $450,000 × 8% × 6/12
= $18,000
Amortization of premium for each period
= $4,000 ÷ 12
= $333
Therefore,
Interest expense
= $18,000 - $333
= $17,667
Setrakian Industries needs to raise $96.2 million to fund a new project. The company will sell bonds that have a coupon rate of 6.04 percent paid semiannually and that mature in 30 years. The bonds will be sold at an initial YTM of 6.85 percent and have a par value of $2,000. How many bonds must be sold to raise the necessary funds? (Round your intermediate calculations to two decimal places and final answer to the nearest whole number.)
a) 66,997 bonds
b) 185,900 bonds
c) 53,598 bonds
d) 96,200 bonds
e) 48,100 bonds
Answer:
OPTION C is correct
number of bonds that must be sold to raise the necessary funds is 53,597 Bonds
Explanation:
First we need to determine how much they sold each bond of $2,000 face value, this can be done using Excel function -pv(rate,nper,pmt,fv)
But we were told that coupon rate of 6.04 percent was paid semiannually and that mature in 30 years, Then the rate used in that function is the coupon rate/2 = 6.85%/2=3.425 which is tied to maturity.
pmt function used = [$2,000×(6.04/100)×(6/12)]=60.5 which is the coupon amount
nper function is (30years× 2) since it is been paid paid semiannually
Note that we were given a face value of $2,000 per bond, then the function can be analyse as
=-pv(6.85%/2,60,60.40,2000)
= 1,794.9
Therefore, single bond =$ 1,794.9 then
Then number of bonds that must be sold to raise the necessary funds
=(96,200,000)/1,794.9
= 53,597
Cainas Cookies purchased a commercial oven on 1/1/14 for a total cost of 35,000. Estimated useful life is 6 years, with a salvage value of 5,000 at the end of that time. Cainas estimates that the equipment will be used for 12,000 baking hours. For the first year of operations, Cainas had 2,500 backing hours. For the second year Cainas had 1,700 hours. Compute the depreciation for YEAR 2. Group of answer choices
Answer:
Units of production = $4250
Straight line depreciation expense = $5,000
Double declining method = $7.777
Explanation:
The depreciation method to he used wasn't stated, so I calculated the depreciation expense using 3 depreciation methods
Straight line depreciation expense = (Cost of asset - Salvage value) / useful life
(35,000 - 5,000) / 6 = $5,000
The depreciation expense each year would be $5000
Depreciation expense using the double declining method = Depreciation factor x cost of the asset
Depreciation factor = 2 x (1/useful life)
2 / 6 = 0.3333
Deprecation expense in year 1 = 0.3333 x $35,000 = $11,666.67
Book value = $35,000 - $11,666.67 = $23,333.33
Depreciation expense in year 2 = $23,333.33 × 0.3333 = $7.777
Depreciation expense using units of production = ( hours used in year / total estimated hours of the machine) x (Cost of asset - Salvage value)
(1,700 / 12,000) x (35,000 - 5,000) = $4250
I hope my answer helps you
The Cainas Cookies' depreciation expense for year 2 is C. $4,250.
The correct choice of answer is not A. $7,292 , B. $6,250 , or D. $4,598.
Data and Calculations:
Cost of commercial oven = $35,000
Salvage value = $5,000
Depreciable amount = $30,000 ($35,000 - $5,000)
Estimated useful life = 12,000 baking hours
Depreciation rate per baking hour = $2.50 ($30,000/12,000)
Depreciation expense for Year 2 = $4,250 ($2.50 x 1,700)
Thus, the depreciation expense for year 2 is $4,250.
Learn more: brainly.com/question/17312012
Kallard Manufacturing Company produces t-shirts screen-printed with the logos of various sports teams. Each shirt is priced at $13.50 and has a unit variable cost of $9.85. Total fixed cost is $197,600. Required: 1. Compute the break-even point in units. Round your answer to the nearest whole unit. units
Answer:
You would need to sell 54,137 units in order to cover your fixed costs
Explanation:
What will a bond be worth on the day it matures? Group of answer choices $0 $100 its face value (plus remaining coupon, if applicable) its remaining coupon, if applicable
Answer: Its face value (plus remaining coupon
Explanation:
On the day a bond matures it is to be paid back to the investors therefore it will be at it's face value to reflect the amount owed to investors. The last coupon may still have to be paid so it also be added to the bond on this date.
For example, if a bond is issued at $100 face value and will.mature in 5 years but is currently trading at $95, at the end of the 5th year it will be trading at $100 because that it what the Issuer of the bond will pay back.
Given the following selected information on McMillen's Chocolate, Inc., calculate Cash Flow from Operating Activities for 2012. Show your work.
2011 2012
EAT $ 600,000 800,000
Depreciation Exp. 100,000 120,000
Dividends 400,000 550,000
Accounts Receivable 1,500,000 1,000,000
Inventory 3,500,000 4,100,000
Accts. Payable 350,000 350,000
Accruals 250,000 200,000
Long-Term Debt 2,300,000 2,000,000
Common Stock 2,200,000 3,000,000
Interest expenses 50,000 60,000
Retained Earnings 6,150,000 6,400,000
Answer:
Cash flow from operating activities for the Year 2012 = $770000.
Explanation:
Particulars Amount ($)
Earnings after tax (EAT) 800,000
+ Depreciation (Non-cash expenditure) 120,000
Operating profit before working 920,000
capital changes
+ Decrease in accounts receivable 500,000
(1,500,000 - 1,000,000)
- increase in inventory 600,000
(4,100,000 - 3,500,000)
- Decrease in accrual 50,000
(250,000 - 200,000)
Cash flow from operating activities 770,000
Conclusion:- Cash flow from operating activities for the Year 2012 = $770000.
Rice Corp. recognizes revenue over time to account for long-term contracts and has the following information for the first year of the contract:
Contract price $500,000
Total expected costs on contract 400,000
Costs incurred in current year 60,000
Costs incurred in previous years 0
What is the amount of revenue recognized in year 1?
A.) $100,000
B.) $500,000
C.) $60,000
D.) $75,000
Answer:
D.) $75,000
Explanation:
Amount of revenue recognized = Cost incurred to date / Estimated total cost * Contract price
Cost incurred to date=60,000
Estimated total cost=400,000
Contract price=500,000
Amount of revenue recognized= 60,000/400,000 * 500,000
=0-15 * 500,000
=$75,000
Amount of revenue recognized in year 1 is $75,000
The servicescape factor that takes into consideration how easy it is for customers to find what they want as they move through a facility is known as:
Answer:
Functionality
Explanation:
Booms and Bitner developed the servicescape model. A servicescape can be defined as the physical surroundings and entire ambience in which a service can take place or occur. Basically, the servicescape emphasizes the importance and impact of the physical surroundings in which services can occur or take place.
The purpose of the servicescape is to evaluate and analyze the environment in which a service is situated and allows both the seller and customer to interact, plus tangible resources which would facilitate business transactions performance and communications.
The servicescape factor that takes into consideration how easy it is for customers to find what they want as they move through a facility is known as functionality.
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
A B
Direct materials used $270,000 Beginning work in process $40,000
Direct labor 200,000 Ending work in process 20,000
Manufacturing overhead 300,000 Beginning finished goods 50,000
Operating expenses 350,000 Ending finished goods 30,000
A) $750,000 $790,000
B) $770,000 $750,000
C) $790,000 $810,000
D) $770,000 $790,000
2) Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below:
Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-
The company requires a 10% rate of return on all new investments.
Present Value of an Annuity of 1
Periods 9% 10% 11% 12%
5 3.890 3.791 3.696 3.605
6 4.486 4.355 4.231 4.111
The annual rate of return for Project Soup is:
A) 55%.
B) 7.5%.
C) 27.5%.
D) 15.0%.
Answer:
1. Glennon Company
Total manufacturing costs and costs of goods sold:
C) $790,000 $810,000
2. Carr Company
Annual Rate of Return for Project Soup:
B) 7.5%.
Explanation:
1A) Total Manufacturing costs
Direct materials used $270,000
Beginning work in process 40,000
Direct labor 200,000
Ending work in process (20,000 )
Manufacturing overhead 300,000
Total manufacturing costs $790,000
1B) Costs of goods sold:
Beginning finished goods 50,000
Costs of goods manufactured 790,000
less Ending finished goods (30,000)
Cost of goods sold $810,000
2) Project Soup Project Nuts
Initial investment $400,000 $600,000
Annual net income 30,000 46,000
Net annual cash inflow 110,000 146,000
Annual Rate of Return = Annual net income/Initial Investment
= $30,000/$400,000 x 100 = 7.5%
On December 28, 20X3, Stern Corporation and Ram Company established S&R Partnership, with cash contributions of $14,000 and $42,000, respectively. The partnership’s purpose is to purchase from Stern accounts receivable that have an average collection period of 90 days and hold them to collection. The partnership borrows cash from Midtown Bank and purchases the receivables without recourse but at an amount equal to the expected percent to be collected, less a financing fee of 5 percent of the gross receivables. Stern and Ram hold 20 percent and 80 percent of the ownership of the partnership, respectively, and Stern guarantees both the bank loan made to the partnership and a 15 percent annual return on the investment made by Ram. Stern receives any income in excess of the 15 percent return guaranteed to Ram. The partnership agreement provides Stern total control over the partnership’s activities. On December 31, 20X3, Stern sold $8,080,000 of accounts receivable to the partnership. The partnership immediately borrowed $7,580,000 from the bank and paid Stern $7,440,000. Prior to the sale, Stern had established a $414,000 allowance for uncollectibles on the receivables sold to the partnership. The balance sheets of Stern and S&R immediately after the sale of receivables to the partnership contained the following:
Stern Corporation S&R Partnership
Cash $8,036,000 $373,000
Accounts Receivable 4,380,000 8,080,000
Allowance for Uncollectible Accounts (212,000) (414,000)
Other Assets 5,420,000
Prepaid Finance Charges 404,000
Investment in S&R Partnership 11,000
Accounts Payable 942,000
Deferred Revenue 404,000
Bank Notes Payable 7,580,000
Bonds Payable 9,770,000
Common Stock 697,000
Retained Earnings 6,630,000
Capital, Stern Corporation 11,000
Capital, Ram Company 44,000
Required:
Assuming that Stern is S&R's primary beneficiary, prepare a consolidated balance sheet for Stern at January 1, 20X4.
Answer:
Total Assets $25,663,000
Total Liabilities and Stockholders’ Equity $25,663,000
Explanation:
Preparation of the prepare a consolidated balance sheet for Stern at January 1, 20X4
Stern CorporationConsolidated Balance StatementJanuary 1, 20X4
ASSET:
Cash $8,409,000
($8,036,000 +$373,000)
Accounts Receivable $12,460,000
( 4,380,000 +8,080,000)
Allowance for Uncollectible Accounts ($626,000)
[(212,000) (414,000)]
Other Assets 5,420,000
Total Assets $25,663,000
LIABILITIES:
Accounts Payable 942,000
Bank Notes Payable 7,580,000
Bonds Payable 9,770,000
Shareholders’ Equity
Controlling Interest:
Common Stock 697,000
Retained Earnings 6,630,000
Total Controlling interest $7,327,000
(6,630,000+697,000)
Non controlling interest $44,000
Total Liabilities and Stockholders’ Equity $25,663,000
Therefore consolidated balance sheet for Stern at January 1, 20X4 will have a Total Assets of $25,663,000 and a Total Liabilities and Stockholders’ Equity of $25,663,000
Welfare analysis: Basic conceptsIdentify whether each of the following statements best illustrates the concept of consumer surplus, producer surplus, or neither. Statement Consumer Producer Neither Surplus Surplus I sold a used laptop for $149, even though I was willing to go as low as $140 in order to sell it. I sold a watch for $59 on eBay last week. This week, someone offered me $145 for it. Even though I was willing to pay up to $46 for a jersey sweater, I bought a jersey sweater for only $39.
Answer:
Producer surplus
Neither
Consumer surplus
Explanation:
Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.
Producer surplus is the difference between the price of the good and the least price the seller is willing to sell his product.
1. Price = $149
least price seller was willing to sell his laptop = $140.
Hence it's producer surplus.
2. Price = $59
there's no information on the least price the seller was willing to sell or the highest amount the buyer was willing to buy.
hence it's neither producer or consumer surplus
3. Price = $39
highest amount buyer was willing to buy = $46
Hence, it's consumer surplus
I hope my answer helps you
Gates Appliances has a return-on-assets (investment) ratio of 19 percent. a. If the debt-to-total-assets ratio is 20 percent, what is the return on equity
Answer:
23.8%
Explanation:
Gates appliances has a return-on-assets(investment) of 19%
The debt-to-total-assets ratio is 20%
Therefore, the return on equity can be calculated as follows
Return on equity= Return on assets(investment)/(1-debt/asset)
= 19/(1-20/100)
= 19/(1-0.2)
= 19/0.8
= 23.8%
Hence the return on equity is 23.8%
Charter Company, which uses the perpetual inventory method, purchases different letters for resale. Character had a beginning inventory comprised of nine units at $3 per unit. The company purchased four units at $5 per unit in February, sold seven units in October, and purchased five units at $6 per unit in December. If Charter Company uses the LIFO method, what is the cost of goods sold for the year
Answer:
Cost of Goods sold is $29
Explanation:
Under the perpetual LIFO or Last In First Out method of inventory valuation, we value the Cost of Goods Sold based on the price of the most recently purchased inventory before sale. Thus the units of closing inventory contains the inventory that was purchased first.
The cost of goods sold under LIFO will be,
Beginning Inventory (9* 3) = 27
Feb purchases (4 * 5) = 20
Oct sales (4 * 5 + 3 * 3) = (29)
Dec purchases (5 * 6) = 30
Ending Inventory = 48
So, the cost of goods sold under perpetual LIFO will comprise of the most recently purchased inventory before sale. The most recently purchased inventory before October sale was of February purchases. Thus, out of the 7 units sold, 4 will comprise of the February purchases and the remaining, 3 units, will be from the beginning inventory.
The cost of goods sold is,
COGS = 4 * 5 + 3 * 3
COGS = 29
McGaha VIllage operates a sanitation department as part of its general government activities. McGaha Village will acquire new sanitation trucks that will be financed through the issuance of general obligation bonds. McGaha Village uses a Capital Projects Fund and a Debt Service Fund to account for the transactions. Make journal entries to record the following transactions and events and indicate the appropriate fund in which the transactions are recorded.
1. April1. McGaha Village issues bonds for their face amount of $300,000
2. April1. McGaha Village acquires sanitation trucks at a total cost of $300,000 for cash. The trucks have an estimated useful life of 10 years.
3. October 1. McGaha Village records the fund liability and pays the first installment of principal ($15,000) and interest ($7,500) on the long term debt.
Answer:
McGaha Village
Journal Entries:
April 1:
Debit Cash Account $300,000
Credit Bonds Payable $300,000
To record the issue of bonds.
April 1:
Debit Sanitation Trucks $300,000
Credit Cash Account $300,000
To record the acquisition of sanitation trucks for cash.
April 1:
Debit Cash Account $300,000
Credit Debt Service Fund $300,000
To record the transfer of funds.
October 1:
Debit Capital Projects Fund $300,000
Credit Debt Service Fund $300,000
To record the funds liability.
Debit Bonds Payable $15,000
Credit Cash Account $15,000
To record the repayment of the bonds.
Debit Interest Expenses $7,500
Credit Cash Account $7,500
To record the payment of interest on the long-term debt.
Explanation:
Journal entries help to initiate the recording of transactions. They show the accounts to be debited and credited in the General Ledger. They have some short narrations which explain the transaction.
Fetzer Company declared a $0.35 per share cash dividend. The company has 200,000 shares authorized, 190,000 shares issued, and 8,000 shares in treasury stock. The journal entry to record the dividend declaration is:
Answer:
The journal entry to record the dividend declaration would be as follows:
Debit Credit
retained earnings $63,700
common dividend payable $63,700
Explanation:
According to the given data we have the following:
shares issued=190,000
treasury stock=8,000
cash dividend=$0.35
Therefore, to prepare the journal entry to record the dividend declaration we would have to calculate the retained earnings as follows:
retained earnings=(shares issued-treasury stock)*cash dividend per share
retained earnings=(190,000-8,000)*$0.35
retained earnings=$63,700
Hence, The journal entry to record the dividend declaration would be as follows:
Debit Credit
retained earnings $63,700
common dividend payable $63,700
An underpinning of all commerce is effective communications, knowledge of where goods and services exit and where they are needed and the ability to communicate instantaneously across vast distances. Facilitation this movement into the future one can observe which shifts in examining world population and telecommunications?
Explanation:
Analyzing the historical context, it is possible to see how the new communication technologies were essential for the development of commerce. We currently live in the digital age, where almost every individual has access to a cell phone with internet and can communicate within seconds with any part of the world.
This technological revolution also had a great economic impact, generating new business models.
Companies have to adapt to this reality and insert themselves in the new market based on the internet, in creating relationships with consumers, in the practice of positive social and environmental attitudes, etc. Some companies needed to reinvent themselves to adapt to the new economic context, or they would lose strength in the market and would cease to exist.
The fact is that the technological revolution has impacted commercial relations around the world, today the consumer seeks the solution to his problems and desires, not being restricted to local consumption, which causes a new redesign of commerce and manages impacts on the economy of the world.
Vargas, Inc. sold goods with a selling price of $ 54,000 in 2019 and estimated 4%warranty expense for the year. Customers complained of defects, and goods with a cost of $ 3,500 had to be replaced. Which of the following is the correct journal entry for honoring the warranties with goods?
A. Estimated Warranty Payable 1,500 Cash 1,500B. Estimated Warranty Payable 1,500 Warranty Expense 1,500C. Warranty Expense 1,500 Merchandise Inventory 1,500D. Estimated Warranty Payable 1,500 Merchandise Inventory 1,500
Answer:
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
Explanation:
Vargas, Inc.
Sales $ 54,000
Warranty 4%
Defected Items $ 3500
The Estimated Warranty Payable is a deferred liability and is posted in the journal unless paid . It is debited when an equal amount of merchandise inventory is credited . An equal amount of inventory is credited to honor the warranty charges which are a liability of the seller if the deal is not accordingly set. So the correct entry is
Estimated Warranty Payable 3,500 Debit
Merchandise Inventory 3,500 Credit
The amount is equal to the defected items claimed. But from the given choices it is
Estimated Warranty Payable 1,500 Debit
Merchandise Inventory 1,500 Credit
On December 31, Jarden Co.'s Allowance for Doubtful Accounts has an unadjusted credit balance of $14,000. Jarden prepares a schedule of its December 31 accounts receivable by age. Accounts Receivable $ 860,000 344,000 68,800 34,400 13,760 Age of Accounts Receivable Not yet due 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Over 90 days past due Expected Percent Uncollectible 1. 20% 1.95 6.45 32.50 67.00
Required:
1. Compute the required balance of the Allowance for Doubtful Accounts at December 31.
Accounts Receivable Percent Uncollectible (#.##%) Estimated Uncollectible Not due: 1 to 30: 31 to 60: 61 to 90: Over 90: Estimated balance of allowance for uncollectibles
2. Prepare the adjusting entry to record bad debts expense at December 31. (Round percentage answers to nearest whole percent. Do not round intermediate calculations.)
Answer and Explanation:
a. The required balance of allowance for doubtful debts is shown below:
Particulars Account receivable % Estimated uncollectible
Not yet due $860,000 1.20% $10,320
1 to 30 days $344,000 1.95% $6,708
31 to 60 days $68,800 6.45% $4,438
61 to 90 days $34,400 32.50% $11,180
Over 90 days $13,760 67.00% $9,219
Estimated balance $41,865
b. The adjusting entry is
Bad debt expense Dr ($41,865 - $14,000) $27,865
To Allowance for doubtful debts $27,865
(being the bad debt expense is recorded)
For recording this we debited the bad debt expense as it increased the expenses and credited the allowance for doubtful debts as it decreased the assets
Gullett Corporation had $32,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $81,000 of raw materials. The journal entry to record the purchase of raw materials would include a:
Answer:
Dr Raw materials $81, 000
Cr Accounts payable $81,000
Explanation:
Preparation of the journal entry to record the purchase of raw materials for Gullett Corporation
Since we were told that the Corporation already had the amount of $32,000 of raw materials on hand in which they later purchased an additional amount of $81,000 of the raw materials this means we are going to record the Journal entry by Debiting Raw materials with the amount of $81, 000 which is the additional amount of the raw materials purchased and to Credit Accounts payable with the same amount of $81,000.
Dr Raw materials $81, 000
Cr Accounts payable $81,000
(To record purchase of raw materials)
Ferris Company began January with 6,000 units of its principal product. The cost of each unit is $5. Merchandise transactions for the month of January are as follows: Purchases Date of Purchase Units Unit Cost* Total Cost Jan. 10 5,000 $ 6 $ 30,000 Jan. 18 6,000 7 42,000 Totals 11,000 72,000 * Includes purchase price and cost of freight. Sales Date of Sale Units Jan. 5 3,000 Jan. 12 2,000 Jan. 20 4,000 Total 9,000 8,000 units were on hand at the end of the month. Required: 1. Calculate January's ending inventory and cost of goods sold for the month using FIFO, periodic system.
Answer:
Cost of goods sold = $210,000
Ending inventory = $54,000
Explanation:
The computation of the ending inventory and the cost of goods sold using the FIFO periodic system is shown in the attachment below
The periodic inventory system is the system in which the inventory is maintained in periodic intervals like monthly, half-yearly, quarterly, yearly. There is no need to update the inventory to the latest date.
While the FIFO method refers to the method in which the inventory that is first purchased should be considered first and then the remaining inventory should be considered on date wise