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nordsb [41]
3 years ago
11

ABC, Inc. discounts a 5%, 9-month, $1,000 note with a financial institution after holding the note for 3 months. The note was re

ceived on the sale of an asset to another party. The discount percentage is 7%. The proceeds to ABC, Inc. equal $1,001.19.
Business
1 answer:
Gnoma [55]3 years ago
8 0

Answer:

interest receivable   12.50    debit

     interest revenue     12.50 credit

--adjusting entry for the interest accrued--

interest expense      11.31 debit

cash                     1,001.19 debit

     note receivable             1,000.00 credit

     interest receivable             12.50 credit

--to record early discount of the note--

Explanation:

We are going to write-off the note and check for the interest expense:

book value of the note:

principal  + interest accrued

principal x rate x time = interest

1,000 x 0.05 x 3 months/12 month a year  = 12.50

we had interest receivable for 12.50

1,000 + 12.5 = 1,012.5 we receive 1,001.19

interest expense: 11.31

We are following this process to avoid compensate balance as is the company earned interest during those three months and then it pay interest to get cash earlier.

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The recency effect happens when robust points are made on the quit of a message and are considered the most persuasive.

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5 0
1 year ago
Today we see a very low unemployment rate with a controlled and acceptable inflation rate. Which of the following statements cou
serious [3.7K]

Answer:

A. All of these 3 other possible answers that are listed here are true reasons.

Explanation:

If we are to use wage the rate of change in wages or inflation, as a proxy for inflation in the economy, when there is unemployment, the number of persons searching for work is significantly greater than the number of jobs available for the people who are unemployed. What we mean is, the supply of labor is greater than the demand for it.

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7 0
2 years ago
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Organic Eats provides an organic, vegan menu. Since there are very few restaurants that offer the same unique services, customer
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Answer:

Focused differentiation strategy

Explanation:

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2 years ago
1. A major controversy that is yet to be resolved about the Medicare Prescription Drug, Improvement and Modernization Act of 200
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Answer:

C. What the program will ultimately cost the federal government

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The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 was an attempt to make improvements or amendments to the Social Security Act.  It radically changed the playing field for private plans participating in the Medicare program by substantially raising monthly payment rates in an effort to stabilize the market and reverse the decline in benefit generosity.  It also provided for voluntary prescription drugs under the medicare program.  However, the utilization and cost of the program skyrocketed as soon as the funding source was established.  It has remained unknown what the program will ultimately cost the federal government, no wonder the current administration under Trump wants to turn it upside down.

3 0
2 years ago
Some recent financial statements for Smolira Golf Corp. follow:
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Answer:

1. The company's profit margin is 13.4% percent.

profit margin = net income / net sales = $45,064 / $336,329 = 13.4%

2. The total asset turnover is 0.82 times.

asset turnover ratio = net sales / average assets = $336,329 / [($387,891 + $432,000)/2] = $336,329 / $409,945.50 = 0.82

3. The equity multiplier is 1.7 times.

equity multiplier = average total assets / average total equity = $409,945.50 / [($205,936 + $275,000)/2] = $409,945.50 / $240,468 = 1.70

4. Using the Du Pont Identity, the company's ROE is 18.68% percent.

ROE = profit margin x asset turnover x equity multiplier (or financial leverage) = 0.134 x 0.82 x 1.7 = 0.1868 = 18.68%

4 0
3 years ago
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