Deciding on an income usage would be useful.
I think that’s true but I’m not sure
If we used the retail method to estimate the ending inventory first we get the given of the problem that can be used in solving.
Given
Sales - 200,000
Goods available for sale - 261,000 (cost) & 450,000 (retail)
First, we need to get the cost of retail ratio. the formula is
Cost to Retail ratio= Cost/ Retail
261,000
CRR= ------------- = 0.58
450,000
Next is to get the ending inventory by following this steps
Cost Retail
Cost of Goods Available for Sale $261,000 $450,000
- Sales $200,000
------------------
Ending Inventory $250,000
x Cost to Retail Ratio .58
------------------
Ending Inventory $145,000
So, the estimated ending inventory for the month of July is $145,000.
Answer:
Explanation:
The journal entries are shown below:
Cash A/c Dr $55,000,000
To Notes payable $55,000,000
(Being note payable issued for cash)
Interest expense A/c Dr $1,787,500
To Interest payable A/c $1,787,500
(Being interest recorded)
The interest expense is computed by
= Borrowed amount × interest rate × number of months ÷ (total number of months in a year)
= $55,000,000 × 13% × (3 months ÷ 12 months)
= $1,787,500
The 3 months is computed from the October 1 to December 31