Answer:
$2,250
Explanation:
Since terms require you to amortize the loan with 7 equal end-of-year payments, it implies that interest will be paid on the amount outstanding balance for a whole year.
The would be paid in Year 2 can therefore be calculated as follows:
Equal amount of the loan principal = Loan amount / Number of equal end-of-year payments = $35,000 / 7 = $5,000
Loan balance outstanding throughout Year 2 = Loan amount - Year 1 end-of-year payment = $35,000 - $5,000 = $30,000
Year 2 interest payable = Loan balance outstanding throughout Year 2 * Annual interest rate = $30,000 = 7.5% = $2,250.
Therefore, you would be paying $2,250 interest in Year 2.
Answer:
a. 32 refrigerators
b. 29 refrigerators
Explanation:
a. The computation of the economic order quantity is shown below:
= 32 refrigerators
b. Now the reorder point is
= Annual demand ÷ total number of days in a year × lead time + (service level × standard deviation for the lead time)
= 500 units ÷ 365 days × 7 days + (1.90 × 10 units)
= 9.59 + 19
= 29 refrigerators
The only answer here that would appear in the stockholders' equity section is retained earnings. Having a net loss in the income statement would mean there is less earnings to retain.
The complete question is:
When a magazine company collects cash for selling a subscription, it is an example of:
1. A deferred revenue transaction
2. An accrued receivable transaction
3. A prepaid expense transaction
4. An accrued liability transaction
Answer:
A deferred revenue transaction.
Explanation:
In this scenario the magazine company has collected cash for a subscription. Subscriptions are payments that are made to gain access to a certain service. Take for example if a subscription has to be paid to a company to access their website for information. The cash has been collected but service is to be provided in the future. When service is not yet provided and payment is collected it is referred to as deferred revenue.
This is because the service has not yet been performed so revenue is not yet earned. When service is provided then the revenue is recognised.
