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N76 [4]
3 years ago
11

On January 1, Year 2, Grande Company had a $69,000 balance in the Accounts Receivable account and a $2,500 balance in the Allowa

nce for Doubtful Accounts account. During Year 2, Grande provided $180,000 of service on the account. The company collected $210,100 cash from accounts receivable. Uncollectible accounts are estimated to be 1% of sales on account.
Based on this information, the amount of cash flow from operating activities that would appear on the Year 2 statement of cash flows is _____.
Business
1 answer:
attashe74 [19]3 years ago
5 0

Answer:The amount of uncollectible accounts expense recognized on the Year 2 income statement is $1,800.

Explanation:The amount of uncollectible accounts expense recognized on the Year 2 income statement is $1,800 ($180,000 x 1%), which has been computed by multiplying the percentage of allowance for uncollectible account with the total on account sales.

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R. J. Graziano Wholesale Corp. uses the LIFO method of inventory costing. In the current year, profit at R. J. Graziano is runni
Nata [24]

Answer:

a. What is the effect of this transaction on this year's and next year's income statement and income tax expense? Why?

The inventory account is a permanent asset account in the balance sheet, so it doesn't matter if the company purchases all that it can during the last days of December, it will not affect the income statement, nor their tax liability for the current year. A company only recognizes cost of goods sold when the goods are actually sold, not when they are purchased.

Since the company uses the LIFO (last in, first out) inventory method, all it will do is increase the value of ending inventory which changes into beginning inventory next year. You can reduce next year's income more by purchasing the goods next year.

b. If R. J. Graziano Wholesale had been using the FIFO method of inventory costing, would the president give the same directive?

If the company used the FIFO method, the result will be the same. Inventory is not COGS, whether you use FIFO, LIFO weighted average, specific identification, or any other acronym that you might come up with. At beginning of the year, inventory must be average to determine beginning inventory. it might help to increase COGS a little, therefore, decreasing net income, but the effects shouldn't be significant.

c. Should the plant accountant order the inventory purchase to lower income? What are the ethical implications of this order?

It is useless, and he should know it. The only implication is that this will help him realize his low IQ.

6 0
3 years ago
A salesman at a music store always begins by showing his customers high-priced instruments. When the customers refuse these, the
quester [9]

Answer: Rejection-then-retreat approach.

Explanation: The musical equipment salesman is using the Rejection-then-retreat approach to sell his musical items. This method is used to frighten the customers with higher priced items then make them settle for lesser priced items.

4 0
3 years ago
Read 2 more answers
A company issues a ten-year bond at par with a coupon rate of 6.5% paid semi-annually. The YTM at the beginning of the third yea
Montano1993 [528]

Answer:

$880.31

Explanation:

For computing the new price of the bond we need to apply the present value formula i.e to be shown in the attachment

Given that,  

Assuming Future value = $1,000

Rate of interest = 8.6%  ÷ 2 = 4.3%

NPER = 8 years  × 2 =

PMT = $1,000 × 6.5% ÷ 2  = $32.5

The formula is shown below:

= -PV(Rate;NPER;PMT;FV;type)

So, after applying the above formula, the present value is $880.31

5 0
3 years ago
Steel Company as lessee signed a lease agreement for equipment for 5 years, beginning December 31, 2017. Annual rental payments
balu736 [363]

Answer:

a.

                                                                       Debit   Credit

December 31, 2017

Lease Equipment Under Capital Leases    $166,794  

                                                      Lease Liability    $166,794

December 31, 2017/January 1, 2018

Lease Liability                                        $40,000  

                                                         Cash             $40,000

b.                                           Debit               Credit

December 31, 2018

Depreciation Expense  $23,828  

          Accumulated Depreciation      $23,828

December 31, 2018/January 1, 2019

Interest Expense           $12,679  

Lease Liability          $27,321  

                           Cash                     $40,000

c.                                             Debit     Credit

December 31, 2019

Depreciation Expense        $23,828  

  Accumulated Depreciation  $23,828

December 31, 2019/January 1, 2020

Interest Expense                    $9,947  

Lease Liability                 $30,053  

                Cash                         $40,000

d. Balance Sheet

December 31,2019

Property Plant and Equipment                             Current Liabilities  

Leased Equipment Under Capital Leases $166,794 Lease Liability $33,058

Less Accumulated Depreciation $47,656  

                                                        $119,138                Long Term  

                                                                                      Lease Liability $36,362

Explanation:

a. The journal entries, that should be recorded on January 1, and December 31, 2017, by Steel would be as follows:

                                                                       Debit   Credit

December 31, 2017

Lease Equipment Under Capital Leases    $166,794  

                                                      Lease Liability    $166,794

December 31, 2017/January 1, 2018

Lease Liability                                        $40,000  

                                                         Cash             $40,000

Lease Equipment Under Capital Leases=(40,000*PVIFA(10%,Years = 40,000*4.16986))= $166,794  

b. The journal entries, that should be recorded on January 1 and December 31, 2018, by Steel would be as follows:

                                          Debit               Credit

December 31, 2018

Depreciation Expense  $23,828  

          Accumulated Depreciation      $23,828

December 31, 2018/January 1, 2019

Interest Expense           $12,679  

Lease Liability          $27,321  

                           Cash                     $40,000

Depreciation Expense= (166,794/7)=$23,828

Interest Expense [(166,794 - 40,000)*10%]=$12,679  

Lease Liability=(40,000 - 12,679)=$27,321

c. The journal entries, that should be recorded on January 1, and December 31, 2019, by Steel would be as follows:

                                            Debit     Credit

December 31, 2019

Depreciation Expense        $23,828  

  Accumulated Depreciation  $23,828

December 31, 2019/January 1, 2020

Interest Expense                    $9,947  

Lease Liability                 $30,053  

                Cash                         $40,000

d. The amounts that would appear on Steel's December 31, 2019, balance sheet relative to the lease arrangement would be as follows:

Balance Sheet

December 31,2019

Property Plant and Equipment                             Current Liabilities  

Leased Equipment Under Capital Leases $166,794 Lease Liability $33,058

Less Accumulated Depreciation $47,656  

                                                        $119,138                Long Term  

                                                                                      Lease Liability $36,362

8 0
3 years ago
Due to ____, market forces should realign the cross exchange rate between two foreign currencies based on the spot exchange rate
aksik [14]

Answer:

Triangular Arbitrage

Explanation:

Arbitrage is the financial practice in which the prices of two or more different markets are taken advantage of to make profit as a result of tthe imbalance in the prices of the markets.

Also known as 3 point or cross currency arbitrage, Triangular arbitrage is the taking advantage/ exploiting of the pricing differences between 3 currencies on the foreign exchange market.

Simply put, triangular arbitrage is a situation in which the exchange rates between 3 currencies are not the same.

Triangular arbitrage is difficult to come by as it requires very advanced computer systems to detect and take advantage of.

I hope this helps.

6 0
3 years ago
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