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andreev551 [17]
3 years ago
13

On July 1, 2021, Markwell Company acquired equipment. Markwell paid $185,000 in cash on July 1, 2021, and signed a $740,000 noni

nterest-bearing note for the remaining balance which is due on July 1, 2022. An interest rate of 6% reflects the time value of money for this type of loan agreement.
Which of the following should be included in the journal entry on July 1, 2021?

a. Credit: Notes payable, $698,116.
b. Debit: Equipment, $925,000.
c. Debit: Discount on notes payable, $41,884.
d. Credit: Notes payable, $698,116 and Debit: Discount on notes payable, $41,884.
Business
1 answer:
Alenkasestr [34]3 years ago
7 0

Answer:

c. Debit: Discount on notes payable, $41,884.

Explanation:

The journal entry is shown below:

Equipment    $883,116  

Discount on Notes payable $41,884  ($740,000 - $698,116)

        To Notes payable       $740,000  

        To Cash                       $185,000

(Being the amount paid in cash and note payable is recorded)

Working note

= Note payable amount × PVF factor at 6% for one year

= $740,000 × 0.94340

= $698,116

For recording this we debited the equipment as it increased the assets and discount is always debited while the note payable and cash is credited as it increased the liabilities and reduced the assets

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5 0
3 years ago
What are the three legal forms of business organization? What are their advantages and disadvantages?
algol13

Answer:

There are three legal forms of business organization that are sole proprietorship, society and corporation.

Explanation:

<u>Sole proprietorship:</u> A company that has only one person and works for its own benefit. In almost all the world there are a large number of sole proprietorships which are usually small companies, the most common being for example a personal teacher, a bicycle workshop, etc.

Advantage:

- The owner receives all profits and profits.

- Independence

Disadvantages:

- There is unlimited liability so that all income can be used to pay debts.

- The owner performs several activities.

<u>Company</u>: company that has two or more people. In general, partnership companies are larger than sole proprietorships. The most common companies in society are finance and insurance.

Advantage:

- Raises more funds than sole proprietorship.

- Greater intelligence and administrative ability.

Disadvantages:

- The company dissolves when a partner dies.

- Difficulty to liquidate or transfer the company.

<u>Corporation</u>: The property (shares) of a corporation are its shareholders. Shareholders have profits by receiving dividends that are distributions of the earnings of the shares.

Advantage:

- They have a limited liability, they don't lose more money than they invested.

- The company has a long life.

Disadvantages:

- Higher organizational costs than in other business forms since they need to hire staff.

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4 0
3 years ago
It was 8:00 a.m. on Saturday morning. Liz just learned that her well-meaning cousins were headed over to help her unpack her hou
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Answer:

empowered

Explanation:

According to my research on employee roles and responsibilities, I can say that based on the information provided within the question in this situation we can say that the employee was empowered. This can be said because he too the initiative in order fix the problem in a way that would leave the customer happy and wanting to come back again.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

8 0
3 years ago
During the year a donor pledged $1,000,000 in funds to a not-for-profit private charter school. The school will receive the pled
KonstantinChe [14]

Answer:

D) It would not be recorded.

Explanation:

FASB means Financial Accounting Standards Board.

Financial Accounting Standards Board is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles (GAAP) within the United States in the public's interest. The Securities and Exchange Commission (SEC) designated the FASB as the organization responsible for setting accounting standards for public companies in the US.

No matter what kind of restriction a donor might impose, FASB standards require nonprofits to report finances in a way that makes it clear which funds have donor restrictions and which funds come without donor restrictions. FASB standards are in three categories: “unrestricted,” “temporarily restricted,” and “permanently restricted.”

Unrestricted are those items that have no donor-imposed restrictions

Temporarily Restricted are those items that were received with a donor-imposed restriction that will be satisfied in the future (generally within one year)

Permanently restricted assets are funds of a nonprofit organization that must be used in designated ways and whose principal cannot be touched.

Since the school will recieve the pledge ONLY if it is able to raise $500,000 in funds over the next year, then the pledge would not be recorded

3 0
3 years ago
Sales (19,500 units at $30 per unit) $585,000 Variable expenses 409,500 Contribution margin 175,500 Fixed expenses 180,000 Net o
vichka [17]

Answer:

                                                                                                   Automated

Sales (19,500 units at $30 per unit)            $585,000            $585,000

Variable expenses                                        409,500               351,000

Contribution margin                                       175,500              234,000

Fixed expenses                                              180,000              252,000

Net operating loss                                          $(4,500)           $( 18,000)

New Cm ratio=  Contribution Margin/ Sales Revenue

                      = $ 234,000 $ 585,000 = 0.4

Break-even point in  dollars=  Fixed Costs/ 1- (variable Cost/ Sales)

                                            =  252,000/ 1- (351,000/ 585,000)

                                             = 252,000/ 1-0.6

                                               = 252,000/0.4= $ 630,000

The resulting $ 630,000 is the break even point at which neither a loss nor a profit is incurred.This can be checked as follows.

Sales                                                                         $ 630,000

Variable Costs  ( 60 % $ 630,000)                          $ 378,000

Contribution Margin                                                   $ 252,000

Less Fixed Expense                                                   <u>$ 252,000</u>

Profit                                                                           <u>       0            </u>

Break even point in units =  Fixed Costs/ Contribution Margin in units

                                         = $ 252,000/ (30-18)

                                          =$ 252,000/ $ 12= 21,000 units

Two Contribution format Income Statements:

                                                                                                   Automated

Sales (26,000 units at $30 per unit)           $780,000            $780,000

Variable expenses                                        546,000               468,000

Contribution margin                                       234,000                312,000

Fixed expenses                                              180,000              252,000

Net operating Profit                                     $ 54,000                $ 60,000

Working:

Variable Costs per unit = $ 409500/19500=  $ 21

After reduction variable costs = $ 21- $3= $ 18

4 0
3 years ago
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