Answer: See explanation
Explanation:
a. Determine the due date of the note.
The due date will be gotten by calculating the date that will make 120 days starting from April 9th. This will be:
April = 30 - 9 days = 21 days
May = 31 days
June = 30 days
July = 31 days
August = 7th day.
Therefore, August 7 is the due date
b. Determine the maturity value of the note.
Amount of interest on note = 96000 x 10% x 120/360
= 96000 × 0.1 × 1/3
= $3200
Then, Maturity Value will be:
=$96000 + $3200
= $99200
c. Journalize the entry to record the receipt of the payment of the note at maturity.
7th August:
Debit: Cash = $99200
Credit: Note receivable = $96000
Credit: Interest revenue = $3200
(Note receivable realized)
Answer:
NU company.
The reason LIFO and FIFO present 2 different valuation of inventory is because of the way inventory is expensed in either methods.
LIFO stands for Last in First out. Meaning the last stock to be received should be the first to be issued to production.
If it thus shows that our costs of inventory has been increasing over the period, the inventory expensed to cost of sales will be high while the inventory balance in the balance sheet low. And the reverse if the costs of new inventory purchases have been declining.
FIFO stands for First in First out. Meaning the first inventories receives must be exhausted before we move to the receipt after that, and on and on.
If it thus shows that our costs of inventory has been increasing over the period, the inventory expensed to cost of sales will be low while the inventory balance in the balance sheet high. And the reverse if the costs of new inventory purchases have been declining
Nu company Gross Profit
Net sales $2,950
Less costs of sales:
Cost of goods available for sale 2,350
Less inventory closing 920
Costs of sales 1,430
Gross profit $1,520
Gross Profit % = $1,520 / $2,950
= 52% (c)
