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Virty [35]
3 years ago
12

Mama's Pizza Shoppe borrowed $7,200 at 12% interest on May 1, 2021, with principal and interest due on October 31, 2022. The com

pany's fiscal year ends June 30, 2021. What adjusting entry is necessary on June 30, 2021
Business
1 answer:
olganol [36]3 years ago
7 0

Answer:

<h2>Mama's Pizza Shoppe</h2>

Adjusting Entry on June 30, 2021:

Debit Interest Expense $144

Credit Interest Payable $144

To accrue interest expense for the year (2 months).

Explanation:

a) Calculation: The interest on the borrowing is $144 ($7,200 x 12%)/12 x 2

b) Adjusting entries are prepared at the end of the accounting period in order to recognize non-cash expenses and revenue, prepaid expenses, and revenue received in advance, and depreciation expense for the period.  It is in accordance with the accrual concept and matching principle of generally accepted accounting principles.  These require that expenses and revenue are recognized on the accrual basis whether cash is paid or received for them or not.  And that expenses and revenue are matched to the period they occur.

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Net Present Value Method
arsen [322]

Answer:

year               net cash flow

0                     -$150,000

1                        $80,000

2                       $65,000

3                       $50,000

4                       $40,000

A) NPV = -$150,000 + ($80,000 x .87) + ($65,000 x .756) + ($50,000 x .658) + ($40,000 x .572) = -$150,000 + $69,600 + $49,140 + $32,900 + $22,880 = -$150,000 + $174,520 = $24,520

B) Yes , because the net present value indicates that the return on the proposal is greater than the minimum desired rate of return of 15%. Since the NPV is positive ($24,520), it means that the cash inflows are higher than the cash outflows when we use a 15% discount rate.

4 0
3 years ago
McCann Publishing has a target capital structure of 35% debt and 65% equity.This year's capital budget is $850,000 and it wants
Nataliya [291]

Answer:

B) $952,500

Explanation:

Calculation for how much net income must it earn to meet its capital budgeting requirements and pay the dividend

Using this formula

Net income = Dividends + (Capital budget ×Equity)

Let plug in the formula

Net Income=$400,000+($850,000×65%)

Net Income=$400,000+$552,500

Net Income=$952,500

Therefore how much net income must it earn to meet its capital budgeting requirements and pay the dividend dividend,all while keeping its capital structure in balance is $952,500

8 0
2 years ago
Identify and demonstrate processes for making long-term goals and short-term goals
matrenka [14]
Long term 4-6+ years  goals like having a career having a business or some , short term 0 months-1/2 years and that's like making It to the next grade.
8 0
3 years ago
8. As a generic legal term.
Serga [27]

Answer: C) Corporation

Explanation: A Corporation can be Simply defined as a legal entity who's privileges, liabilities and rights are different or separate from the group of person who created it. That is, if the business get sued to court, what ever the punishment or retribution is, it will not directly affect the owners but the business itself. If the company's car on duty accidentally crashed into a person's shop, the company will pay for it, not the driver or the owners of the business.

So corporation means any group of person with a legal entity.

7 0
3 years ago
You invested $5,000 in the stock market one year ago. Today, the investment is valued at $5,500. What return did you earn? What
Alex17521 [72]

Answer:

A

Explanation:

Rate of return in one period = (value in year 1 / initial value) - 1

(5500 / 5000) - 1 = 0.1 = 10%

(5000 / 5500) - 1 = -9.09%

6 0
2 years ago
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