Answer:
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
Explanation:
Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2021 with a refund liability of $330,000. During 2021, Halifax sold merchandise on account for $11,800,000. Halifax's merchandise costs is 70% of merchandise selling price. Also during the year, customers returned $345,000 in sales for credit, with $191,000 of those being returns of merchandise sold prior to 2021, and the rest being merchandise sold during 2021. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year.
Answer:
a. $8,000 gain
Explanation:
The face value of the bonds purchased by Pluto Corporation are $120,000. The bonds are purchased at discount of $1,980. The bonds have carrying value of $126,019 at the time of purchase. The net gain or loss is calculated by the difference between two values.
$120,000 - $126,019 - $6,019
The discount amount of the bond was $1,980.
Total gain on the bonds approximately ($6,019 + $1,980) = $8,000
Answer:
Explanation:
Yield rate on unsecured bonds=12%
Yield rate on zero coupon bond=12%
Yield rate on 10% mortgage bonds=12%
Total debt value=10m+25m+20m=55m
Weight of unsecured bonds=10/55=0.182
Weight of zero coupon bonds=25/55=0.455
Weight of 10% mortgage bonds = 20/55= 0.363
Cost of debt=0.182*12+ 0.455*12+0.363*12=12%
Answer:
d.$7,091 increase
Explanation:
From the accounting equation, assets = liabilities + equity. If the total liabilities decrease by $27,275, the assets will also decrease by $27,275. Similarly, when stockholders' equity increased by $34,366, the amount of assets will increase by the same amount. The net increase in assets will be $7,091, which is the difference between the increase in stockholders' equity and the decrease in liabilities ($34,366 - $27,275).
A coase solution to a problem of externality ensures that a socially efficient outcome is to maximize the joint welfare, irrespective of the right of ownership.
Explanation:
In law and in economics the Coase theorem explains the economic efficiencies in the existence of externalities. The economic efficiency of economic allocation or outcome. In practice, barriers to negotiation or poorly defined rights of property can prevent coasean negotiations.
The private external solutions include, for the benefit of the relevant parties, moral codes, charities and business fusions and contracts. In the theorem, two parties can bargain and obtain an optimal outcome in the presence of an externality when transaction cost is low.
