Answer:
b. $588
Explanation:
Terms 2/10, n/30 means that 2% discount for the payment within 10 days and the full amount to be paid within 30 days.
When Larson Company sold merchandise, the following entry was made to recording revenue (sales) and the receivable:
Debit Receivable Account $1,000
Credit Revenue $1,000
On July 20 Stuart Co. returns merchandise, the entry is made to record the decreasing of Receivable Account:
Debit Revenue $400
Credit Receivable Account $400
The balance Receivable Account of Stuart Co. = $1000-$400 = $600
On July 24, Stuart Co. makes the payment, the sales discount was:
$600 x 2% = $12
The amount of cash received = $600-$12=$588
The following entry is made:
Debit Cash: $588
Debit Sales discount: $12
Credit Receivable Account $600
Answer:
A.
Debit Unearned Revenue $11,250
Credit Sales $11,250
Explanation:
B. It is an income for the company. Prepaid subscription is an expense for the company. Therefore, it is incorrect.
C. It is contradictory as the company already recorded the first quarter transaction. Therefore, Unearned revenue should be debit. So, it is also incorrect.
D. According to the revenue recognition, revenue is recognized when they are earned. Therefore, the company acquired the cash when the company received last year. So, it is incorrect.
E. Again, cash cannot be credit. Therefore, it is incorrect.
A is the correct answer. As, when the company received the payment, unearned revenue was credit. As the income is now recorded for the first quarter, $(45,000/4) = $11,250 of unearned revenue becomes earned. So, it is debit. Since it is a sale of a company, the sale becomes credit.
Answer:
6% = 4500
5% = 3500
Explanation:
wo equations can be derived from the question
x + y = $8,000 equation 1
0.05x + 0.06y = $445. equation 2
x = amount invested in 5%
y = amount invested in 6%
multiply equation 1 by 0.05
0.05x + 0.05y = 400 equation 3
subtract equation 3 from 2
0.01y = 45
y = $4500
substitute for y in equation 1
8500 - 4500 = 3500
Answer: Selling price or product price.
Answer:
The bad debt expense for the year is 3,000 dollars
Explanation:
We should solve for the bad debt expense with a reverse engineer on the allowance T account
Allowance
<u> DEBIT CREDIT </u>
Beginning 25,000
write-off 10,000
bad debt <u> X </u>
Ending 18,000
25,000 - 10,000 + X = 18,000
15,000 + X = 18,000
X = 18,000 - 15,000
X = 3,000