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Firdavs [7]
1 year ago
15

On June 30, 2024, the Esquire Company sold some merchandise to a customer for $54,000. In payment, Esquire agreed to accept a 7%

note requiring the payment of interest and principal on March 31, 2025. The 7% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2024 interest accrual, and the March 31, 2025 collection. 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over- or understated in 2024 and 2025?
Business
1 answer:
Paraphin [41]1 year ago
5 0

The income before income taxes is 2024 understated by $1,890 and 2025 overstated by $1,890.

<h3>Income before taxes</h3>

Esquire Company journal entries

June 30, 2024

Debit Note receivable            $54,000

Credit Sales                              $54,000                  

Dec 31, 2024

Debit Interest receivable       $1,890

Credit Interest Income           $1,890

($54,000 x 7% x6/12)

March 31, 2025

Debit Cash      $56,835                      

Credit Interest receivable          $1,890

Credit Interest income          $945

($54000 x 7% x 3/12 )

Credit Note Receivable    $54,000

Therefore the income before income taxes is 2024 understated by $1,890 and 2025 overstated by $1,890.

Learn more about Income before taxes here:brainly.com/question/14644556

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Own price increases are associated with decreases in quantity demanded, ceteris paribus. These decreases in quantity demanded ar
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Answer:

Income effect

Explanation:

Own price increases are associated with decreases in quantity demanded, ceteris paribus. These decreases in quantity demanded are composed of two effects, the substitution effect and the<u> Income effect.</u>

We know as per the law of demand, price increases lead to decrease in the quantity demanded if factor remain constant.

Quantity demanded has effect of two other major factors:

  • Subtitution effect.
  • Income effect.

Subtitution effect: It is the price of subtitution goods & services also lead to increase and decrease of demand for any particular goods.

Example: Price of tea and coffee.

Income effect: It is the income of consumer that effect the demand of any goods & sevices, as with the increase in income of consumer, their demand for inferior goods decreases and demand for branded goods increases.

Example: Non branded clothes and branded clothes.

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A microeconomist — as opposed to a macroeconomist — might study
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What is the difference between a national bank and a state bank?
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a car is purchased for $43,000. each year it loses 25% of its value. after how many years will the car be worth $9200 or less? (
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After a car is purchased at $43000 and looses 25% worth every year then the car will be worth $9200 or less after four(4) years.

What does Purchase mean?

Purchase is a term used to refer to the acquisition of goods or services in exchange for money. It is a common business transaction and can involve buying something outright or entering into an agreement to pay for it over time.

What does Services mean?

Services is a broad term that refers to any type of work or activity performed to meet the needs of a customer. Services can range from professional services like accounting or consulting to tangible products like food or clothing. Services are typically intangible in the sense that they cannot be touched, felt, or seen, but the benefits they provide are very real.

As per the price of the car which is $43,000  and it looses 25% each year which is $10750. From this we come to know that the car will  be worth of $9200 or less within 4 years.

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