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4 years ago

The following items were selected from among the transactions completed by O’Donnel Co. during the current year:

Business

1 answer:

Reptile [31]4 years ago

5 0

Answer:

O’Donnel Co.

a) Journal Entries:

Jan. 10:

Debit Purchases with $144,000

Credit Accounts Payable (Laine Co.) with $144,000

To record purchase of merchandise on account, terms n/30.

Feb. 9:

Debit Accounts Payable (Laine Co.) with $144,000

Credit Notes Payable (Laine Co.) with $144,000

To record issue of a 30-day, 8% note.

Mar. 11:

Debit Notes Payable with $144,000

Credit Cash Account with $144,000

To record payment of the note

May 1:

Debit Cash Account with $174,000

Credit Notes Payable (Tabata Bank) with $174,000

To record issue of a 45-day, 9% note.

June 1:

Debit Equipment (Tools) with $120,000

Credit Notes Payable (Gibala Co.) with $120,000

To record purchase of tools with a 60-day note, 6%.

June 15:

Debit Interest Expense with $15,660

Credit Cash Account with $15,660

To record payment of interest, 9% on $174,000 note.

June 15:

Debit Notes Payable with $174,000

Credit Notes Payable (Tabata Bank) with $174,000

To record issue of 45-day, 7% note.

July 30:

Debit Notes Payable with $174,000

Debit Interest on Notes with $12,180

Credit Cash Account with $186,180

To record payment of note with 7% interest.

July 30:

Debit Notes Payable with $120,000

Debit Interest on Notes with $3,600

Credit Cash Account with $123,600

To record payment of note with 6% interest for 1 month.

Dec. 1:

Debit Office Equipment with $120,000

Credit Cash with $20,000

Credit Notes Payable (Warick Co.) with $100,000

To record purchase and issue of a series of ten 5% notes for $10,000 each, coming due at 30-day intervals.

Dec. 15:

Debit Litigation Claims Loss with $77,000

Credit Litigation Claims Payable with $77,000

To record a product liability claim.

Dec. 31:

Debit Notes Payable with $10,000

Debit Interest on Notes with $500

Credit Cash Account with $10,500

To record payment of note and interest.

Explanation:

Notes Payable refer to the formalization of business transactions done on account with notes. This enables the creditor to enforce legal claims and receive agreed interest.

It reduces the risk of credit default for goods purchased on credit. In addition, the recipient is entitled to agreed interest which accrues thereon.

It eliminates Accounts Payable when a note is drawn and transfers the amount due to the Notes Payable. It is also a means of extending the credit period beyond the normal trade terms.

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Answer:

The variable should be included or excluded based on its significance.

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3 years ago

Tom Tom LLC purchased a rental house and land during the current year for $150,000. The purchase price was allocated as follows:

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Answer:

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3 years ago

Clean N Green is a two-year-old company that makes wind turbines. The business owner, Janelle, is struggling to compete. Finding

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By simplifying work and increasing output per worker is this approach to job design most likely to help Clean N Green

Explanation:

Job design is the organisation of work into the tasks necessary to perform a certain task. Job design includes conscious efforts to organise tasks, assignments and duties into some kind of unit of work to reach certain goals.

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3 years ago

The following information relates to next year's projected operating results of the Children's Division of Grunge Clothing Corpo

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Answer:

The annual financial disadvantage of eliminating the division is $30,000.

Explanation:

contribution margin = revenue - variable costs = $200,000

fixed expenses = $500,000

net loss = $300,000.

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3 years ago

Pirates Incorporated had the following balances at the beginning of September.

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Answer:

Journal Entries:

September 1:

Debit Cash $3,700

Credit Service Revenue $3,700

To record the provision of services for cash.

September 2:

Debit Land $5,400

Credit Long-term Note Payable $5,400

To record the purchase of land from Crimson company.

September 8:

Debit Accounts Receivable $5,000

Credit Service Revenue $5,000

To record the provision of services on account.

September 10:

Debit Supplies $1,000

Credit Accounts Payable $1,000

To record the purchase of supplies on account.

September 13:

Debit Long-term Notes Payable $3,000

Credit Cash Account $3,000

To record the payment to Crimson Company on long-term note.

September 18:

Debit Cash Account $4,000

Credit Accounts Receivable $4,000

To record the cash receipt from customers.

September 20:

Debit Rent Expense $800

Credit Cash Account $800

To record the payment of September's rent.

September 30:

Debit Utilities Expense $1,500

Credit Cash Account $1,500

To record the payment of September's utility bill.

September 30:

Debit Salaries Expense $3,000

Credit Cash Account $3,000

To record the payment of salaries for the month.

September 30:

Debit Dividend $1,000

Credit Cash Account $1,000

To record the payment of cash dividend to shareholders.

Explanation:

a) PIRATES INCORPORATED

Trial Balance

As of September 1

Accounts Debits Credits

Cash $5,500

Accounts Receivable 1,500

Supplies 6,600

Land 10,200

Accounts Payable 6,500

Notes Payable 2,000

Common Stock 8,000

Retained Earnings 7,300

Totals $23,800 $23,800

b) Pirates' Journal entries are made as business transactions occur on a daily basis. They are the first set of records in the accounting books. They identify the accounts to be debited and the accounts to be credited in the general ledger.

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4 years ago