Answer: please refer to the explanation section for journals and notes
Explanation:
1 April
DR Inventory 23000
CR Trade Payable 23000
inventory is purchased on Free on Board Shipping terms, risks and Ownership of inventory transfers to Kerber Co the moment Wilkes company ships the inventory. inventory must be recognised
6 April
DR Freight costs 900
CR Bank 900
DR Inventory 900
CR Freight costs 900
Kerber Co Paid Freight costs of $900. There are two events happening in this transaction being the payment of freight costs and the capitalisation of freight costs. Freight costs are capitalised (included in the value of inventory) as they are costs necessary to get the inventory in to the premises of the customer (Kerber Co).
7 April
DR Equipment 26000
CR Creditor/Liability 26000
Kerber Co purchase inventory on credit. equipment is debited because Equipment is an asset and liability is credited.
8 April
DR Trade Payable 3000
CR inventory 3000
Damaged inventory returned will decrease inventory balance and also decrease the amount owed to the creditor (Wilkes Company)
. Trade Payable account is Debited and inventory account is credited to record the decrease in inventory and amount payable
15 April
DR Trade Payable 20000
CR Bank 20000
23000 - 3000 = 20 000
recording payment made to the Creditor for inventory purchased or settlement of the trade payable account
Answer:
A. Holiday lights in mid-December: Scarce on occasion: Holiday lights are only scarce on holiday season when the demand increases.
B. Air regardless of quality: Not scarce
: Only high quality air (clean) is scare.
C. Land: Inherently scarce: No matter what we do, our planet is only one.
D. Patented goods: Artificially scarce: Patents are scarce because a law protects them.
E. Original Picasso paintings: Inherently scarce: Picasso is dead, so he cannot paint anymore.
Answer:
$259.34
Explanation:
the value of the stock can be determined using the two stage dividend discount model.
In the first stage, the present value would be determined using a discount rate of 18%.
In the second stage, the present value would be determined using a discount rate of 6%.
Values from the first and second stage would be added together to determine the value of the stock
First stage
Present value in year 1 = ($3.2 x 1.18) / 1.087 = $3.47
Present value in year 2 = ($3.2 x 1.18²) / 1.087² = $3.77
Present value in year 3 = ($3.2 x 1.18³) / 1.087³ = $4.09
Present value in year 4 = ($3.2 x 1.18^4) / 1.087^4 = $4.44
Second stage
($3.2 x 1.18^4 x 1.06) / (0.087 - 0.06) = 243.57
Value of the stock = $3.47 + $3.77 + $4.09 + $4.44 + 243.57 = $259.34
Answer:
Sale of plant assets. If the company<u> sales an equipment it will receive cash </u>for it. We are not given with any information of this transaction not being in cash, so we should assume it was a sale in cash or cash equivalent.
Explanation:
<u>Conversion of bonds into common stock.</u> The bonds, which are outstanding and represent a promise to pay, are converted into common stock, this transaction doesn't involve cash.
<u>Issuance of common stock to purchase land. </u>The land is acquire in exchange of common stock, the company is not using cash. the owner of the land can later sold the stock to a third party but it won't affect the cash flow of the company.
<u>Issuance of debt to purchase equipment </u>Like singing a note to purchase a machine, no cash is involve.
