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Anit [1.1K]
3 years ago
13

The company has an unadjusted debit balance in Accounts Receivable of $25,000 and an unadjusted credit balance of $10 in Allowan

ce for Sales Discounts as of December 31. Of the $25,000 of receivables, $10,000 are within a 2% discount period that the company expects the buyers to take.
Complete the necessary adjusting entry by selecting the account names from the drop-down menus and the amounts in the Debit and Credit columns.
Business
1 answer:
KATRIN_1 [288]3 years ago
3 0

Answer:

Date        Description              Dr.             Cr.

Dec 31   Sales discounts       $200

             Allowance for sales discounts   $200

Explanation:

Expected sales discounts. $10,000 × 2% = $200

As the discount is expected and according to the accrual accounting concept the expenses accrued or expected to incurred should be recorded in the period in which revenue of that expense is recorded. Discount of 2% is expected to be availed by the customer amounting sales of $10,000. and it will be availed after year end as discount period will end after year end.

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So we can be hot ️‍

7 0
3 years ago
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KING company wants to issue new 10-years bonds to finance some needed expansion. The company currently has an 8 percent coupon b
Gemiola [76]

Answer:

Coupon rate is 7.41%

Explanation:

Using the price formula , the yield to maturity can be calculated first of all:

Bond price=coupon interest /yield to maturity

Bond price is $1080

coupon interest is 8%*$1000=$80

$1080=$80/yield to maturity

$1080*yield to maturity=$80

yield to maturity=$80/$1080

                         =7.41%

However if the price of the bond becomes the par value, the coupon rate can be calculated thus:

$1000=coupon payment/7.41%

coupon payment =$1000*7.41%

coupon payment=$74.1

coupon rate=$74.1/100=7.41%

5 0
3 years ago
Read 2 more answers
Colby Corporation has provided the following information: Operating revenues from customers were $207,700. Operating expenses fo
wel

Answer:

$46,700

Explanation:

Operating revenue

$207,700

Less:

Operating expenses

($119,000)

Operating profit

$88,700

Less:

Interest expense

($8,700)

Income tax expense

($37,000)

Net income

$43,000

Add:

Gain from sale

$3,700

Total net income

$46,700

Therefore, Colby's net income is $46,700

6 0
2 years ago
If a firm has set up a revolving credit agreement with a bank, the risk to the firm of being unable to obtain funds when needed
Paladinen [302]

Answer:

True

Explanation:

the risk to the firm of being unable to obtain funds when needed is lower than if it had an informal line of credit.

3 0
3 years ago
Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $89 per unit. The
mario62 [17]

Answer:

A.Total cost 41 93 (52)

B. It would be much better to manufacture the carrying cases .

While Fixed factory overhead is less important to this decision.

Explanation:

Fremont Computer Company Differential Analysis

Make Alternative 1: Buy Alternative 2:

Differential effect on net income

Alternative 1 : Alternative 2: Differential effect

Purchase Price - 89 (89)

Direct material 16 - 16

Direct labor 20 - 20

Variable 1 - 1

manufacture overhead (20×5%)

Fixed (5-1) 4 4 -

manufacture overhead

Total cost 41 93 (52)

The Company should choose Alternative 1

which is Make carrying case

B. It would be much better to manufacture the carrying cases.

While Fixed factory overhead is less important to this decision.

Therefore in make or buy decision the selling price of the product will be less important because the selling price was not provided which means it does not have effect on the decision of buy or make.

7 0
3 years ago
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