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Alik [6]
3 years ago
8

5. A business in its first period of trading charges $4,000 of sales tax on its sales and suffers $3,500 of sales tax on its pur

chases which includes $250 irrecoverable sales tax on business entertaining. Prepare the sales tax control account.
Business
1 answer:
Katyanochek1 [597]3 years ago
8 0

The unrecoverable sales tax on business entertaining ($250) has been deducted from $3,500

solution

                                   SALES TAX CONTROL ACCOUNT

Payable s                                             $ 3250        Receivables       $4000

Balance c/d (owned to tax authority)   $ 750

                                                           -------------                                ---------------

                                                             $ 4000                                    $4000

                                                           --------------                               ----------------

                                                                              By balance b/d       $ 750

You might be interested in
Activity Expected Costs Expected Activity Handling materials $ 625,000 100,000 parts Inspecting product 900,000 1,500 batches Pr
bekas [8.4K]

Answer and Explanation:

The computation is shown below:

1. Plant wide overhead rate = Budgeted Overheads ÷ Budgeted Activity.

where,

Budgeted Overheads :

Handling materials                  625,000

Inspecting product                  900,000

 Processing purchase orders   105,000

Paying suppliers                       175,000  

Insuring the factory                 300,000

Designing packaging                75,000

Total Cost                               2,180,000

And, the budgeted activity is 125,000

So, Plant wide overhead rate is

= Budgeted Overheads ÷ Budgeted Activity.

= $2,180,000/125,000

= $17.44 per direct labor hour

Now Assignment of Overheads

As Deluxe model required 2,500 direct labor hours

So, Deluxe model = 2,500 × $17.44

= $43,600

As Basic model required 6,000 direct labor hours

So, Basic model = 6,000 × $17.44

= $104,640

8 0
2 years ago
Copy equipment was acquired at the beginning of the year at a cost of $56,000 that has an estimated residual value of $8,000 and
sergeinik [125]

Answer:

Results are below.

Explanation:

<u>The depreciable cost is the result of deducting from the purchase price the salvage value:</u>

<u></u>

Depreciable cost= 56,000 - 8,000

Depreciable cost= $48,000

<u>The depreciable rate is the depreciation that the asset suffers in one year express as a percentage:</u>

<u></u>

Depreciation rate= 1/5 = 0.2 or 20% per year

<u>Finally, the units of production depreciation for the first year:</u>

Annual depreciation= [(original cost - salvage value)/useful life of production in copies]*number of copies

Annual depreciation= (48,000/1,000,000)*240,000

Annual depreciation= 0.048*240,000

Annual depreciation= $11,520

5 0
3 years ago
Why does the​ self-correcting mechanism stop working when the policy rate hits the zero lower​ bound?
Alex73 [517]

The available options

A. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

B. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses saving and investment and therefore further widens the output gap.

C. The​ self-correcting mechanism stops working because the rising inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses planned spending and further widens the output gap.

D. The​ self-correcting mechanism stops working because the rising inflation produced by a positive output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease enhances planned spending and further widens the output gap.

Answer:

A

Explanation:

For a given situation in the question above the correct answer is Option A, which is: The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

4 0
3 years ago
The balance sheet of Sub America reports total assets of $400,000 and $450,000 at the beginning and end of the year, respectivel
Rudiy27

Answer:

$42,500

Explanation:

Given that,

Beginning total assets = $400,000

Ending total assets = $450,000

Average total assets = (Beginning total assets + Ending total assets) ÷ 2

                                   = ($400,000 + $450,000) ÷ 2

                                   = $425,000

Return on assets = 10%

Net Income ÷ Average total assets = 0.1

Net Income ÷ $425,000 = 0.1

Net Income = 0.1 × $425,000

                   = $42,500

Therefore, the Sub America's net income for the year is $42,500.

6 0
3 years ago
Morrow Enterprises Inc. manufactures bathroom fixtures. The stockholders’ equity accounts of Morrow Enterprises Inc., with balan
algol13

Answer:

Morrow Enterprises Inc.

A. January 1 balances in T-accounts:

                                         Common Stock

                                                Jan. 1     Balance b/d        $7,500,000

                                        Additional Paid-in Capital -Common Stock

                                                Jan. 1     Balance b/d        $825,000

                                        Retained Earnings

                                                Jan. 1     Balance b/d        $33,600,000

                                        Treasury Stock

Jan. 1  Balance b/d $450,000

B1. Journal entries to record the transactions:

Jan. 22

Debit Dividends Payable $28,000

Credit Cash Account $28,000

To record payment of $0.08 dividends per share.

April 10

Debit Cash Account $1,800,000

Credit Common Stock $1,500,000

Credit Additional Paid-in Capital $300,000

To record the issue of 75,000 shares for $24 per share.

June 6

Debit Cash Account $650,000

Credit Treasury Stock $450,000

Credit Additional Paid-in Capital $200,000

To record reissue of 25,000 shares of treasury stock at $26 per share and close the Treasury Stock balance to Additional Paid-in Capital.

July 5

Debit Stock Dividends $450,000

Credit Dividends Payable $450,000

To record the declaration of the 4% stock dividend on 450,000 shares of common stock.

August 15

Debit Dividends Payable $450,000

Credit Common Stock $360,000

Credit Additional Paid-in Capital $90,000

To record the  issue of a 4% stock dividend certificates on 450,000 shares at $25

Nov. 23

Debit Treasury Stock $570,000

Credit Cash Account $570,000

To record the purchase of 30,000 shares of treasury stock for $19 per share.

Dec. 28

Debit Dividends $42,000

Credit Dividends Payable $42,000

To record the declaration of a $0.10 per share dividend on 420,000 shares of common stock.

Dec. 31

Debit Income Summary Account $1,125,000

Credit Retained Earnings $1,125,000

To close the credit balance of the income summary.

Dec. 31

Debit Retained Earnings $492,000

Credit Stock Dividends $450,000

Credit Dividends $42,000

To close the two dividends accounts.

B2) Posting to the selected accounts:

                                        Common Stock

Dec. 31 Balance c/d  $9,360,000 Jan. 1    Balance b/d         $7,500,000

                                                        Apr. 10  Balance b/d         $1,500,000

                                   <u>                   </u>  Aug 15  Dividend Payable  <u>$360,000</u>

                                  <u>$9,360,000 </u>                                          <u>$9,360,000</u>

                                                        Jan. 1 Balance b/d           $9,360,000

                                        Additional Paid-in Capital -Common Stock

Dec. 31 Balance c/d $1,415,000 Jan. 1   Balance b/d               $825,000

                                                   Apr. 10     Balance b/d            $300,000

                                                   Jun. 6   Treasury Stock         $200,000

                                <u>                 </u>  Aug 15  Dividend Payable      <u> $90,000</u>

                               <u> $1,415,000</u>                                               <u>$1,415,000</u>

                                                   Jan. 1 Balance b/d                $1,415,000

                                        Retained Earnings

Dec. 31 Stock Dividends   $450,000 Jan. 1    Balance b/d       $33,600,000

Dec. 31 Dividends               $42,000 Dec. 31  Income Summary $1,125,000

Dec. 31 Balance c/d     <u>$34,233,000</u>                                          <u>                     </u>

                                    <u>$34,725,000</u>                                          <u>$34,725,000</u>

                                                           Jan. 1 Balance b/d           $34,233,000

                                        Treasury Stock

Jan. 1      Balance b/d $450,000  Jun. 6 Cash                          $450,000

Nov. 23  Cash            <u>$570,000</u>   Dec. 31 Balance c/d             <u>$570,000</u>

                                <u>$1,020,000</u>                                               <u>$1,020,000</u>

Jan. 1   Balance b/d   $570,000

                                        Dividends Payable

Jan. 22  Cash                    $28,000  Jan. 1 Balance b/d             $28,000

Aug. 15 Common Stock $360,000   Jul. 5 Stock Dividends   $450,000

Aug. 15 Additional Paid-in$90,000   Dec. 23 Cash Dividends $42,000

Dec. 31 Balance c/d          <u>$42,000</u>                                           <u>                </u>

                                       <u>$520,000</u>                                          <u>$520,000</u>

                                                           Jan. 1 Balance b/d           $42,000

                                        Stock Dividends

Jul. 5 Dividends Payable $450,000 Dec. 31 Retained Earnings $450,000

                                      Cash Dividends

Dec. 28 Dividends Payable $42,000 Dec. 31 Retained Earnings $42,000

 

                                       Income Summary Account

Dec. 31  Retained Earnings $1,125,000 Dec. 31 Balance b/d   $1,125,000

C. Retained Earnings Statment for the year ended December 31, 2016:

Beginning Balance     $33,600,000

Income Summary           $1,125,000

Stock Dividends             ($450,000)

Cash Dividends               ($42,000)

Ending Balance         $34,233,000

Explanation:

a)                                       Cash Account                                                            

Apr. 10   Common Stock  $1,500,000 Jan. 22  Dividends Payable$28,000

April 10  Additional Paid-in $300,000  Nov. 23 Treasury Stock   $570,000

Jun. 6    Treasury Stock     $450,000  

Jun. 6    Additional Paid-in $200,000

6 0
2 years ago
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