Sales Returned and Allowances $50
Allowance for Sales Return and Allowances $50
Lavender expects 5 jars at $10 each ($50 total) to be returned.
Explanation:
Lavender Corporation sells 100 jars of essential oil to Bed, Bath, and Relax on December 1, 20X5, for $10 each. Lavender offers a right to return the product for any reason. Based on past sales, Lavender expects Bed, Bath, and Relax to return 5 jars
<u>Using the above stated information we get the given data :-</u>
Sales Returned and Allowances $50
Allowance for Sales Return and Allowances $50
Lavender expects 5 jars at $10 each ($50 total) to be returned.
<u>The adjusting journal entry on December 31 reflects</u>
- The right of return by debiting Sales Returns and Allowances (a contra-revenue account) and
- Crediting Allowance for Sales Returns and Allowances (a contra-asset account to Accounts Receivable).
C. Learn to focus on the important aspects of your life
Answer:
d) $60,000 is released into working capital
Explanation:
Inventory turnover is the number of times that a firm buys and sells inventory. A high inventory means that the company sells its stock many times in a year.
the formula for inventory turnover ratio
=Cost of goods sold/ average inventory
If a firm has COGS of $800,000 and an inventory turnover of 5, then the average inventory will be
=$800,000 /5
=$160,000
If the firm improves its turnover to 8, then the average inventory will be
=$800,000/8
=$100,000
The firm average inventory will $100,000 as opposed to $160,000 previously.
$60,000 will be released to working capital.
Answer:
net income = $106,000
Explanation:
net income = total revenues - total expenses = $772,000 - $666,000 = $106,000
Any additional capital raised will increase the company's cash flows (financing activity) and any dividends distributed will decrease them (another financing activity), but they do not affect the company's net income.
