A seller uses a perpetual inventory system, and on April 17, a customer returns $1,000 of merchandise previously purchased on cr
edit on April 13. The seller's cost of the merchandise returned was $480. The merchandise is not defective and is restored to inventory. The seller has not yet received any cash from the customer. Complete the two journal entries (the first for the revenue part of the transaction and the second for the cost part) to record the sales return transaction by selecting the account names and dollar amounts from the drop-down menus
1 answer:
You might be interested in
Answer:
b. 8.225%
Explanation:
In this question, we use the Rate formula which is shown in the spreadsheet.
The NPER represents the time period.
Given that,
Present value = $754.08
Assuming figure - Future value or Face value = $1,000
PMT = 1,000 × 7.25% ÷ 2 = $36.25
NPER = 9 years × 2 = 18 years
The formula is shown below:
= Rate(NPER,PMT,-PV,FV,type)
The present value come in negative
So, after solving this,
1. The pretax cost of debt is 11.75%
2. And, the after tax cost of debt would be
= Pretax cost of debt × ( 1 - tax rate)
= 11.75% × ( 1 - 0.30)
= 8.225%
