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2 years ago

Nihon Company had the following transactions involving notes payable.

Business

1 answer:

scoundrel [369]2 years ago

6 0

The preparation of the journal entries for each of the transactions for Nihon Company is as follows:

<h3>Journal Entries:</h3>

July 1, 2017 Debit Cash $50,000

Credit Note Payable (First National Bank) $50,000

To record the receipt of loan on note payable at 12% for 6-months.

Dec. 31, 2017 Debit Interest Expense $3,000

Credit Interest Payable (First National Bank) $3,000

To accrue interest expense.

Apr. 1, 2018 Debit Interest Expense $1,500

Credit Interest Payable (First National Bank) $1,500

To accrue interest expense.

Debit Note Payable (First National Bank) $50,000

Debit Interest Payable (First National Bank) $4,500

Credit Cash $54,500

To record the payment of note payable and interest.

<h3>Transaction Analysis:</h3>

July 1, 2017 Cash $50,000 Note Payable (First National Bank) $50,000

a 6-month, 12% note.

Dec. 31, 2017 Interest Expense $3,000 Interest Payable (First National Bank) $3,000

Apr. 1, 2018 Interest Expense $1,500 Interest Payable (First National Bank) $1,500

Note Payable (First National Bank) $50,000 Interest Payable (First National Bank) $4,500Cash $54,500

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Gross profit under LIFO = $40,570 - $26,340 = $14,230

Gross profit under FIFO = $40,570 - $24,520 = $16,050

Gross profit under average cost = $40,570 - $26,238.46 = $14,331.54

Gross profit under specific ID = $40,570 - $26,070 = $14,500

Explanation:

I divided the purchases and sales:

Mar. 1 Beginning 130 units $51.60 per unit

Mar. 5 Purchase 240 units $56.60 per unit

Mar. 18 Purchase 100 units $61.60 per unit

Mar. 25 Purchase 180 units $63.60 per unit

Totals 650 units, $37,900

Mar. 9 Sales 290 units $86.60 per unit

Mar. 29 Sales 160 units a $96.60 per unit

Totals 450 units. $40,570

COGS under LIFO:

(240 x $56.60) + (50 x $51.60) = $16,164

160 x $63.60 = $10,176

total = $26,340

COGS under FIFO:

(160 x $56.60) + (130 x $51.60) = $15,764

(110 x $56.60) + (50 x $61.60) = $8,756

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COGS under average cost:

($37,900 / 650) x (290 + 160) = $26,238.46

COGS under specific ID:

(80 x $51.60 ) + (210 x $56.60) = $16,014

(60 x $61.60) + (100 x $63.60) = $10,056

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4 years ago

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In the long run, most economists agree that a permanent increase in government spending leads to <u>complete</u>.

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Answer:

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