Answer:
1. Allowance for uncollectible accounts A/c Dr $15,000
To Account receivable A/c $15,000
(Being write off amount is recorded)
2. $1,000 debit
Explanation:
1. The journal entry is shown below:
Allowance for uncollectible accounts A/c Dr $15,000
To Account receivable A/c $15,000
(Being write off amount is recorded)
2. And, the balance of Allowance for Uncollectible Accounts would be
= Beginning balance of estimated uncollectible accounts - written off balance
= $14,000 - $15,000
= $1,000 debit
Answer:
a. Investment at Amortized Cost
a. the journal entry to record Tanner-UNF's investment :
Debit : Investment in Bonds 140.0 million.
Credit : Cash 140.0 million.
Explanation:
Definition and Recognition
<em>IAS 32</em> defines a Financial Asset as any asset that is cash, equity instrument of another entity, a contractual right to receive cash or another asset. The bonds acquired by Tanner-UNF Corporation presents a <em>contractual right to receive cash</em> therefore it is a Financial Asset.
Classification
<em>IFRS 9</em> deals with the classification of Financial Assets. Financial Assets can be classified at Amortized Cost, Fair Value through other Comprehensive Income and Fair Value through Profit and loss.
If the entity`s model is <em>to collect the contractual cash flows</em> and if these cash flows give rise <em>to payments of principle and interest</em>, the Financial will be classified as Amortized Cost. Since Tanner-UNF Corporation management has the positive intent and ability to hold the bonds until maturity, they will classify the Investment at Amortized Cost.
Initial measurement
All financial investments are initially measured at Fair Value. Thus, investment in $170 million of 6.0% bonds will be measured at $140.0 million.
Journal entry :
Debit : Investment in Bonds 140.0 million.
Credit : Cash 140.0 million.
Answer:
Matching concept
Explanation:
This accounting principle is of the opinion that the expenses incurred in generating revenue should be matched with the revenue or income in order to ascertain whether or not profit or loss has been made,in other words,reporting only the revenue without considering the fact some amount has been incurred in a bid to generate the revenue does not a clear picture of the business underlying transactions.
It is simply aggregating like with like since costs incurred in the period are deducted from revenue in the same period.
Answer:
the company's WACC is 16.88%
Explanation:
<u>Cost of Common Stock is Calculated as follows :</u>
The available data allows us to use the (Capital Asset Pricing Model ) CAPM to calculate the cost of equity.
Cost of Common Stock = Risk free rate + Company`s Beta × Risk Premium
= 5.9 % + 1.12× 10 %
= 17.10%
<u>Cost of Bonds is Calculated as follows :</u>
Cost of Debt = Interest × (1- tax rate)
= 7.90% × ( 1- 0.30)
= 5.53%
<em>Capital Source Market Value Weight Cost Total</em>
Common Stock $35,190,000 98.05% 17.10% 16.77%
Bonds $699,840 1.95% 5.53% 0.11%
Total $35,889,840 100.00% 16.88%
Answer:
Cash received from customers is $66,000.
Explanation:
Cash Received from Customers is determined by opening a Total Accounts Receivables T- Account as follows :
Total Accounts Receivables T- Account
<u>Debit :</u>
Opening Balance $13,000
Sales $62,000
Totals $75,000
<u>Credit:</u>
Closing Balance $9,000
Cash <em>(Balancing figure)</em> $66,000
Totals $75,000
Conclusion:
Cash received from customers is $66,000.