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3 years ago

The owner's drawing account has a balance of $275. The correct entry to close the drawing account would be to debit:

Business

1 answer:

Dmitry [639]3 years ago

4 0

Answer:

Dr Owner capital account $275

Cr Drawings Account $275

Explanation:

The initial entry was:

Dr Drawings $275

Cr Inventory $275

And the closing entry is to close the drawing account which is done by crediting the whole balance left in the drawing account and charging it to owner capital account. By doing so the drawing shows lowers the profit as the owner has not paid any cash and the drawing account closes at zero balance at the end of the year.

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On October 1, year 14, Park Co. purchased 200 of the $1,000-face-value, 10% bonds of Ott, Inc., for $220,000, including accrued

lana [24]

Answer:

Bond receivable - Ott Inc 200,000

Premium on B.R Ott Inc 14,400

Interest receivables 10,000

Net: 224,400

Explanation:

As Park Co uses straight line method, we don't have to solve for the present value of the bond we directly label the difference between cost and face value as premium or discount accordingly. Premium when above and discount when lower.

accrued interest:

200 bonds x $1,000 each x 10% x 3/12 = 5,000

220,0000 cost - 5,000 interest - 200,000 face value = 15,000 bond premium

Balance at December year 15:

the interest payable will be for the entire period:

200,000 x 10% / 2 = 10,000

the premium will be amortized for 3 month.

and it has outstanding 75 month to mature from October 1st

15,000 x 3 / 75 months = 600

carrying value 15,000 - 600 = 14,400

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2 years ago

In one paragraph describe the general advantages and drawbacks of the premium pricing strategy.For exapmle, explain where it fal

pishuonlain [190]

Answer:

The main advantage resulting from a premium pricing strategy is the higher profits. Another advantage is that customers that purchase premium products seek higher quality and tend to show higher brand loyalty associated with the status of using premium products. The disadvantages of premium pricing are that it cannot be applied to all products, the marketing efforts tend to be more specific, and therefore, represent a higher percentage of sales, and finally, not everyone is willing to pay premium prices.

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2 years ago

Riverbed Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2020: Cash $7,280, Land $49

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Answer:

Explanation:

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Total assets = Total liabilities + stockholder equity

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2 years ago

Relish Corp. is a famous fast food chain in the United States. However, increasing competition affects the company's market. Nic

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Answer:

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3 years ago

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