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NISA [10]
2 years ago
14

LCD Industries purchased a supply of electronic components from Entel Corporation on November 1, 2021. In payment for the $24 mi

llion purchase, LCD issued a 1-year installment note to be paid in equal monthly payments at the end of each month. The payments include interest at the rate of 12%.
Required:
1. Prepare the journal entry for LCD’s purchase of the components on November 1, 2021.
2. Prepare the journal entry for the first installment payment on November 30, 2021.
3. What is the amount of interest expense that LCD will report in its income statement for the year ended December 31, 2021?
Business
1 answer:
Ivan2 years ago
5 0

Based on the details given by LCD Industries such as the amount of the note and the interest rate, the journal entries are:

Date               Account title                         Debit                       Credit

Nov. 1 2021    Inventory                       $24,000,000

                      Note payable                                                   $24,000,000

Nov. 30, 2021 Interest expense                $240,000

                       Note payable                      $1,892,366.66

                       Cash                                                              $2,132,366.66

Amount of interest to be reported in income statement = $481,076.33.

<h3>What are the journal entries?</h3>

Inventory will be debited with the payment amount of $24 million. This amount will also be credited to the Note payable account.

The interest expense will be:

= 24,000,000 x 12% x 1/12 months

= $240,000

Cash payment:

= Amount / Present value interest factor of annuity, 1 year, 12%

= 24,000,000 /  11.2551

= $2,132,366.66

<h3>What is the amount of interest to be reported in the income statement?</h3>

= Interest expense in November + (Note amount - note payable for November ) x 1%

= 260,000 + (24,000,000 - 1,892,366.66) x 1%

= $481,076.33

Find out more on notes payable at brainly.com/question/25148915.

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Answer:

D. The payback period is less than 2 years.

Explanation:

Discount rate                 5%  

                                        0      1          2

intital investment        -10  

cash flow                       0        30

Total cash flow         -10      0        30

NPV                        17.21  

IRR                                 73%  

Therefore, The NPV is 17.21 and is positive, the statement is True.

IRR > 50%, Therefore the statement made is True

Accounting rate of return = {[(30 - 10)/10]^(1/2)} - 1

                                           = 41% > 0

Therefore, The statement made is true.

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3 years ago
One difference between a monopoly and a competitive firm is that A. a monopoly faces a downward sloping demand curve. B. a monop
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Answer:

A. a monopoly faces a downward sloping demand curve.

Explanation:

In business, it is seen to occur because they have no competition, monopolists have no incentive to improve their products. A lot of their focus is instead placed on maintaining monopolistic conditions through bribing their way and other tactics that dissuade competitors from entering the market.

 Demand curve slopes downward, this is said to decreases with each unit of production beyond the profit maximizing quantity and in the eyes of the monopolist, cash is lost with each additional unit been produced, causing marginal cost exceeds marginal revenue. This causes the restricted output and higher costs that characterize products produced by monopolists.

Because the demand curve slopes downward, marginal revenue decreases with each unit of production beyond the profit maximizing quantity. Thus, the monopolist loses money with each additional unit produced, as marginal cost exceeds marginal revenue.

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3 years ago
Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased f
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If Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

First step is to calculate the cash flow to creditor  

Cash flow to creditors   = $21,700 + $29,571  

Cash flow to creditors   = $51,271

 

Second step is to calculate the cash flow to Stockholders

Cash flow to Stockholders =$28,400 - $25,500  

Cash flow to Stockholders =$2,900

Now let determine the cash flow from assets using this formula

Cash flow from assets = Cash flow to creditors + Cash flow to stockholders

Let plug in the formula  

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Cash flow from assets = $48,371

Inconclusion if Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

Learn more here:

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Answer:

the answer is A, hope i helped (:

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Explanation:

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