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horsena [70]
3 years ago
8

Several years ago, Nicole Company issued bonds with a face value of $1,030,000 for $960,000. As a result of declining interest r

ates, the company has decided to call the bond at a call premium of 6 percent over par. The bonds have a current book value of $1,013,000. Record the retirement of the bonds, using a discount account.
Business
1 answer:
EleoNora [17]3 years ago
8 0

Answer:

Journal Entry

Explanation:

The Journal Entry is shown below:-

Bonds payable Dr,                      $1,030,000

Loss on retirement of bond Dr,       $78,800

($1,091,800 - $1,013,000)

          To discount on bond                      $17,000

          To cash                                            $1,091,800

($1,030,000 × 106%)

(Being retirement of the bonds is recorded)

You might be interested in
The Reuschel Company began 2018 with inventory of 21,000 units at a cost of $8 per unit. During 2018, 61,000 units were purchase
PtichkaEL [24]

Answer:

1. The Cost of Goods Sold for the period ended 2018 is 682,950.

2. If FIFO method has been used, the Cost of Goods Sold would have been 660,525. Hence, LIFO method has reduced Gross Profit by 22,425 (682,950 - 660,525).

Explanation:

LIFO is one of the methods to calculate cost of goods sold. It assumes that the recently purchased stock is sold first. When a company uses LIFO method, it gets a higher cost of goods sold figure because of Inflation factor.

In the example shared, the company has opening stock of 21,000 units which were purchased at a unit price of $8. During the Year, further units were purchased but this time at a unit cost of $9.95. It is given that the Sales were of 70,500 units. Since the company uses LIFO method, it must remove the recently purchased stock from its books first. So,

61,000 * 9.95 = $606,950.

But the company sold 70,500 units. It means that 61,000 of recently purchased goods were sold and the remaining (70,500 - 61,000) from opening stock.

9,500 * 8 = $76,000. This gives us total CGS of $682,950 (606,950 + 76,000).

If you have any further queries, feel free to ask me. Thanks!

5 0
3 years ago
At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 918,000 Credit sales 31
Over [174]

Answer:

The journal entries are as follows:

(a) 5% of credit sales,

Bad debts expense A/c Dr. $15,900

       To Allowance for doubtful accounts   $15,900

(To record the bad debt expense)

Workings:

Uncollectibles:

= 5% × Credit sales

= 5% × $318,000

= $15,900

(b) 3% of total sales,

Bad debts expense A/c Dr. $37,080

       To Allowance for doubtful accounts   $37,080

(To record the bad debt expense)

Workings:

Uncollectibles:

= 3% × Total sales

= 3% × ($318,000 + $918,000)

= $37,080

(c) 8% of year-end accounts receivables,

Bad debts expense A/c Dr. $18,240

       To Allowance for doubtful accounts   $18,240

(To record the bad debt expense)

Workings:

Uncollectibles:

= (8% × year end accounts receivables) + Allowance for doubtful accounts balance

= (8% × $143,000) + $6,800

= $18,240

4 0
3 years ago
Problem 5-7 Analyzing Transactions
7nadin3 [17]
I don’t see anything :/
4 0
3 years ago
Why is the demand for most services--such as popular restaurants--extremely time-and-place dependent?
arlik [135]
The reason why the demand is extremely time-and-place dependent would be: <span>Because customers must be present for service to be delivered
</span>customers must be present for services businesses because Unlike merchandising business, service business focused on the enhance Customer's experience rather than focus on selling the product.
8 0
3 years ago
Look at the sales prices change that is being suggested. In particular, Winetki talks about one of the product's prices as doubl
PilotLPTM [1.2K]

The calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

<h3>What is the weighted-average contribution margin?</h3>

The weighted-average contribution margin shows the average amount that a group of products or services contribute to meet the fixed costs.

The weighted-average contribution margin can be computed as Aggregate sales - Aggregate variable expenses) ÷ Number of units sold.

<h3>Data and Calculations:</h3>

Aggregate sales revenue = $1,800,000

Aggregate variable costs = $1,125,000

Aggregate contribution margin = $675,000 ($1,800,000 - $1,125,000)

Total units sold = 1,500,000

Total fixed costs = $520,000

Weighted average contribution margin = $0.45 ($675,000/1,500,000)

Break-even point in units = 1,155,556 units ($520,000/$0.45)

Thus, the calculation of a revised break-even point in units for the firm as a whole, using the weighted-average contribution margin approach is 1,155,556 units.

Learn more about break-even analysis at brainly.com/question/21137380

#SPJ1

4 0
1 year ago
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