Let us assume that the company Taylor Industries bought merchandise from X company. Taylor Industries will record Accounts Payable while X company will record Accounts Receivable.
Since Taylor Industries will no longer be able to pay off its Account Receivable, X company will have to write off the Accounts Receivable. Writing off Accounts Receivable can be done in two ways.
1) Allowance method:
Bad Debt Expense xxxxx
Allowance for Doubtful accounts xxxxx
Writing Off Bad Debt:
Allowance for Doubtful Accounts xxxxx
Accounts Receivable xxxxx
2) Direct Write-off method.
Bad Debt Expense xxxxx
Accounts Receivable xxxxx
In the books of Taylor Industries, it must recognize the cancellation of the Accounts Payable from the transaction with X company.
Accounts Payable xxxxx
Other Income xxxxx
The Board of Directors does not define the selling price when authorizing the issuance of bonds.
An executive body that jointly manages an organization's activities is called a board of directors. This group could be a business, a nonprofit, or a government entity. It could also be for-profit. The board of directors' responsibilities and authority are governed by governmental regulations as well as the organization's own bylaws and constitution. These authority may specify the number of board members, how they will be chosen, and how frequently they will meet. The board of such an organization is accountable to and may be subordinate to the entire membership, who normally elect the board members in organizations with voting members. In a stock corporation, non-executive directors are elected by the shareholders, and the board has the following authority.
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Answer:
Option (B) is correct.
Explanation:
Given that,
Total Assets = $23,610
Interest-Bearing Debt (market value) = $11,070
Average borrowing rate for debt = 10.2%
Common Equity:
Book Value = $6,150
Market Value = $25,830
Marginal Income Tax Rate = 37%
Market Beta = 1.73
Hence,
Weight on equity capital = Equity ÷ (Debt + Equity)
= 25,830 ÷ (11,070 + 25,830)
= 25,830 ÷ 36,900
= 70%
Therefore, the weight on equity capital is 70%.
Answer:
Debit Advertising expense $916.67
Credit Prepaid Advertising $916.67
Being entries to recognize advertising expense incurred for 5 months.
Explanation:
When an amount is paid in advance, the entries posted are
Debit Prepaid Advertising
Credit Cash account (with the amount prepaid)
As the expense is incurred, entries required would be
Debit Advertising expense
Credit Prepaid Advertising (with the amount incurred)
Expense incurred in 5 months
= 5/6 × $1100
= $916.67
Hence the entries required will be
Debit Advertising expense $916.67
Credit Prepaid Advertising $916.67
Being entries to recognize advertising expense incurred for 5 months.
Answer:
A closed shop refers to business which employs union workers alone, whereas in case of a lockout, such a business does not permit employment of union workers.
Lockout serves as a mean to curb labor union demands. In lockouts, the owners of such businesses lock out or block the entry/employment of union workers.
In case of a closed shop, all the employees represent members of labor union. The two concepts represent exactly opposite scenarios.
