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tatuchka [14]
1 year ago
6

In july, lane co. Sells merchandise to avery co. On account. In august, avery pays the balance in full. The entry that lane will

make to record the receipt of cash will include a credit to the _______ account.
Business
1 answer:
vovangra [49]1 year ago
6 0

The entry that lane will make to record the receipt of cash will include a credit to the Accounts Receivable account.

<h3>What is Accounts Receivable?</h3>

Accounts Receivable is the amount, which a company will receive from its customers who have purchased its goods & services on credit.

It refers to the money that the customer owe to the company for the goods or services that they have already received but not yet paid for.

For example- Goods purchase on credit by ABC, the amount gets added to the accounts receivable.

Learn more about the account receivable here:-

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________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in resp
Flauer [41]

<u>An increase in supply</u><u> means the supply curve has shifted to the right, while </u><u>an increase in quantity supplied </u><u>refers to a movement along a given supply curve in response to an increase in price.</u>

What would shift a supply curve down and to the right?

  • In contrast, a drop in input costs will cause the supply curve to move to the right. Technology.
  • An increase in technology will shift the supply curve to the right. Conversely, a decrease in technology will shift the supply curve to the left.

What does it mean when the supply curve shifts to the right?

  • When demand is constant and supply is increasing, the supply curve moves to the right, creating an intersection where quantity and prices are lower.
  • On the other hand, a negative change in supply causes the curve to move to the left, raising prices and lowering quantity.

Which would cause a shift in the supply curve ?

  • When a change is brought about by a source other than price, the supply curve shifts.

Learn more about supply curve

brainly.com/question/14925184

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5 0
2 years ago
On August 1, 2021, Limbaugh Communications issued $30 million of 10% nonconvertible bonds at 104. The bonds are due on July 31,
kodGreya [7K]

Answer:

Answers are journal entries, in the explanation box

<h2>Explanation:</h2><h3><u>Bonds:</u></h3>

Bonds is an interest bearing security or long term promissory note that a company represents while borrowing money with the interested investors.

<h2><u>Requirement 1:</u></h2><h2><u>Prepare the journal entries on August 1, 2021, to record:</u></h2><h3><u>Requirement 1(a):</u></h3>

The issuance of the bonds by Limbaugh (L)

<u>Solution:</u>

<u>Following is the journal entry for the issuance of bonds on August 1, 2021:</u>

<u>1st August 2021:</u>

Debit: Cash  $31,200,000 <u>(Working 1)</u>

Debit: Discount on bonds payable  $3,600,000 <u>(Working 3: Note 1)</u>

Credit: Bonds payable  $30,000,000

Credit: Equity - stock warrants $4,800,000 <u>(Working 2)</u>

<u>Working 1:</u>

Calculation of cash received:

Cash received = Face value × Issued rate

Cash received = $30,000,000 × 104%

Cash received = $31,200,000

<u></u>

<u>Working 2:</u>

<u>Calculation of amount of equity - stock warrants:</u>

Equity - stock warrants = Market price per warrant × number of warrants × number of bonds

Equity - stock warrants = $8 × 20 warrants × (30,000,000÷ 1,000 bonds)

Equity - stock warrants = $4,800,000

<u>Working 3: </u>

<u>Calculate the discount on bonds payable:</u>

Discount on bonds payable = Bonds payable + Equity stock warrants - Cash received

Discount on bonds payable = $30,000,000 + $4,800,000 - $31,200,000

Discount on bonds payable = $3,600,000

<u>Note 1:</u> Since discount on bonds issues is an expense, therefore, it is debited.

<h3><u>Requirement: 1 (b)</u></h3>

<u>Prepare the journal entries on August 1, 2021, to record the investment by Interstate (I).</u>

<u></u>

The following is the journal entry on August 1, 2021 to record the investment by Interstate (I) i.e. investor:

Debit: Investment in stock $960,000 (Working 4)

Debit: Investment in bonds $6,000,000 (Working 5)

Credit: Discount on bonds investment $720,000 (Working 7)

Credit: Cash $6,240,000 (Working 6)

<u>Working 4: </u>

<u>Calculate the investment in stock warrants:</u>

Investment in stock warrant = Equity - stock warrant × 20%

Investment in stock warrant = $4,800,000 × 20%

Investment in stock warrant  = $960,000

Working 5:

Calculate the amount of investment in bonds:

Investment in bonds = Face value × 20%

Investment in bonds = $30,000,000 × 20%

Investment in bonds = $6,000,000

<u>Working 6:</u>

Calculate the amount of cash paid:

Cash paid = Face value × issued rate × 20%

Cash paid = $30,000,000 × 104% × 20%

Cash paid = $6,240,000

<u>Working 7:</u>

<u>Calculate discount on bond investment:</u>

Discount on bond investment = Investment in stock warrants + Investment in bonds - Cash paid

Discount on bond investment = $960,000 + $6,000,000 - $6,240,000

Discount on bond investment = $720,000

<h2><u>Requirement 2:</u></h2><h2><u>Prepare the journal entries for both Limbaugh and Interstate in February 2032, to record the exercise of the warrants.</u></h2>

<h3><u>Requirement 2(a)</u></h3>

<u>Prepare the journal entries for Limbaugh in February 2032, to record the exercise of the warrants.</u>

Solution:

Following is the journal entry for exercise of warrants by <u>Limbaugh</u>:

Debit: Cash: $7,200,000 (Working 8)

Debit: Equity - stock warrants $960,000 (Working 9)

Credit: Common stock - equity $8,160,000

<u>Working 8: </u>

<u>Amount of cash received from the exercise:</u>

Amount of cash received from the exercise = Exercise price per warrant × Number of warrants × Number of bonds × 20%

Amount of cash received from the exercise = $60 × 20 warrants × ($30,000,000/$1,000) × 20%

Amount of cash received from the exercise = $7,200,000

<u>Working 9:</u>

<u>Amount of equity - stock warrants from exercise:</u>

Equity - stock warrants = Total equity stock-warrants × 20%

Equity - stock warrants = $4,800,000 × 20%

Equity - stock warrants = $960,000

<u>Working 10:</u>

<u>Amount of common stock:</u>

Amount of common stock = Cash received + equity - stock warrants

Amount of common stock = $7,200,000 + $960,000

Amount of common stock = $8,160,000

<h3><u>Requirement 2(b)</u></h3>

<u>Prepare the journal entries for Interstate in February 2032, to record the exercise of the warrants.</u>

Solution:

The journal entry is as follows:

Debit: Investment in common stock: $8,160,000 (Working 13)

Credit: Investment in stock warrants: $960,000 (Working 11)

Credit: Cash: $7,200,000 (Working 12)

Working 11:

<u>Amount of equity - stock warrants from exercise:</u>

Equity - stock warrants = Total equity stock-warrants × 20%

Equity - stock warrants = $4,800,000 × 20%

Equity - stock warrants = $960,000

<u>Working 12:</u>

<u>Calculate the amount of cash paid for exercise:</u>

Amount of cash paid for the exercise = Exercise price per warrant × Number of warrants × Number of bonds × 20%

Amount of cash paid for the exercise = $60 × 20 warrants × ($30,000,000/$1,000) × 20%

Amount of cash paid for the exercise = $7,200,000

<u>Working 13:</u>

<u>Investment in common stock:</u>

<u>Amount of common stock:</u>

Investment in common stock = Cash paid + Investment in stock warrants

Investment in common stock = $7,200,000 + $960,000

Investment in common stock = $8,160,000

3 0
3 years ago
Setting prices for products and services requires entrepreneurs to balance a multitude of complex forces as entrepreneurs determ
Kobotan [32]

Answer:

produce a profit

Explanation:

<u>Price</u> refers to the amount of money that is paid by one party to another to acquire a particular commodity or in return for unit of commodities. Some of the factors that determines the price of a commodity include cost of production, product demand, product supply, targeted profit, and among others.

A <u>profit</u> is the amount earned from selling a commodity minus the amount expended to purchase, operate, or produce the commodity.

The primary aim of an entrepreneur is to make a profit, and price setting is one of the important activities that influences a profit. Since the higher the price, the higher may be the profit. However, a higher price may also dicourage customers from buying a product and then reduces profit.

Therefore, setting prices for products and services requires entrepreneurs to balance a multitude of complex forces as entrepreneurs determine prices for their goods and services that will draw customers and <u>produce a profit</u>.

3 0
3 years ago
The price elasticity of demand is: ________ A. negative, but the minus sign is ignored. B. positive, but the plus sign is ignore
stira [4]

Answer:

A. negative, but the minus sign is ignored.

Step-by-step explanation:

The price elasticity of demand is negative, but the minus sign is ignored.

By definition, price elasticity of demand can be defined as the degree of responsiveness of a change in quantity demanded as a result of a change in price of the commodity.

That is, one percent change in price leads to one percent change in quantity demanded.

Price elasticity of demand is negative but the minus sign is ignored. In economics, we interpret the value in absolute terms such that the minus sign is ignored. When PED is negative, it implies that a one percent change in price of a commodity will lead to a small change in quantity demanded of the commodity. In this case, PED is fairly inelastic; that is, Ed < 1. The commodity in question is a normal good and is conformed to law of demand which states that the higher the price of a commodity, the lower the quantity demanded, and vice versa, all things being equal (celeris paribus).

6 0
3 years ago
Brodigan Corporation has provided the following information concerning a capital budgeting project:
Alecsey [184]

Answer: $36604.7

Explanation:

The net present value sometimes called the net present worth is applied to a series of cash flows that occurs at different times. Present value of a cash flow depends on time interval between now, the cash flow and on the discount rate. The net present value accounts for the time value of money.

The answer is $36604.7. The solution is attached.

7 0
3 years ago
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