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uysha [10]
3 years ago
6

Transcript Company is preparing a cash budget for February. The company has $150,000 cash at the beginning of February and antic

ipates having total sales of $800,000, consisting of 25 % cash sales and 75 % credit card sales. The bank charges 3 percent for credit card deposits. The firm sets its selling price at 160 percent of the cost of purchases and pays the cost of each month's sales at the end of the month. Other cash disbursements are $20,000 per month amd 4 percent of the total sales. In addition, a $600,000 note will be due in February for equipment purchased last August. Transcript Company has an agreement with its bank to maintain a cash balance of $100,000. What amount, if any, must the company borrow during February?
Business
1 answer:
zhuklara [117]3 years ago
3 0

Answer:

The company should borrow $320,000 during february.

Explanation:

Cash Sales = 25%*$800,000

                   = $200,000

Credit Card Sales = 75%*$800,000

                              = $600,000

Bank Charges = 3%*$600,000

                        = $18,000

Selling price = 160% of Cost of purchases

Cost of purchases = Selling price/160%

                              = $800,000/160%

                              = $500,000

4% of Sales = 4%*$800,000

                    = $32,000

Particulars                                           Amount        Amount

Opening cash                                                  150000

Add: Cash Sales                                   200000  

Add: Card Sales                                   600000  

Less: Card Charges                             18000  

Less: Purchases                                    (500000)  

Less: other disbursements                     (20000)  

Less: Other disbursements 2             (32000)  

Less: Note Due                                    (600000)  

Less: Closing balance                             (100000)   -470000

Borrowing                                                                    320000

Therefore, The company should borrow $320,000 during february.

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3 years ago
Altima, Inc. finished Job A40 on the last working day of the year. It utilized $ 360 of direct materials and $ 2 comma 030 of di
Anastasy [175]

Answer:

C. debit to Finished Goods Inventory $ 3 comma 202 and a credit to Work minus Process Inventory $ 3 comma 202

Explanation:

The journal entry is shown below:

Finished goods inventory A/c Dr $3,202

             To Work in process inventory A/c $3,202

(Being the job is completed)

The computation is shown below:

= Direct material cost + Direct labor cost + manufacturing overhead cost

= $360 + $2,030  + $2,030 × 40%

= $360 + $2,030 + $812

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3 0
3 years ago
Blue Spruce University sells 4,500 season basketball tickets at $140 each for its 12-game home schedule. Give the entry to recor
STatiana [176]

Answer:

a. Total revenue received:

= 4,500 * 140

= $630,000

Date                 Account Title                                           Debit              Credit

XX-XX-XXXX  Cash                                                     $630,000

                        Unearned revenue                                                     $630,000

Revenue is unearned because the games have not been played yet therefore Blue Spruce University has not provided the service for which it was paid and has not earned the revenue.

b. The revenue per game is:

= 630,000 / 12 games

= $52,500

Date                 Account Title                                           Debit              Credit

XX-XX-XXXX   Unearned Revenue                             $52,500

                        Revenue - Ticket Sales                                               $52,500

8 0
3 years ago
One of two alternatives will be selected to reduce flood damage in a rural community in central Arizona. The estimates associate
pochemuha

Answer:

Since the incremental B/C of 58.21 is less greater 1, it implies that the alternative that should be selected is Channel.

Explanation:

The alternative that should be selected can be determined using the Benefit-Cost (B/C) analysis as follows:

Incremental B/C = [Incremental Flood damage savings * ((1 + r)^-3 + (1 + r)^-9 + ((1 + r)^-18)] / [Incremental initial cost + (Incremental Annual Maintenance cost * ((1 - (1 / (1 + r))^n) / r))] ............... (1)

Where:

Incremental initial cost = Channel initial cost - Retention pond initial cost = $1,500,000 - $880,000 = $620,000

Incremental Annual Maintenance cost = Channel Annual Maintenance - Retention pond Annual Maintenance = $30,000 - $92,000 = -$62,000

Incremental flood damage savings = Channel Incremental flood damage savings - Retention pond incremental flood damage savings = $625,000 - $200,000 = $425,000

r = Discount rate = 8%, or 0.08

n = number of years = 20

Substituting all the relevant values into equation (1), we have:

Incremental B/C = [425000 * ((1+0.08)^-3 + (1+0.08)^-9 + (1+0.08)^-18)] / [$620,000 - ($62,000 * ((1 - (1 / (1 + 0.08))^20) / 0.08))]

Incremental B/C = $656,340.35 / $11,274.86

Incremental B/C = 58.2127235166936

Rounding to 2 decimal places, we have:

Incremental B/C = 58.21

Since the incremental B/C of 58.21 is less greater 1, it implies that the alternative that should be selected is Channel.

8 0
3 years ago
Hugo decides to buy his Christmas gifts on Black Friday. To simplify his life, he is giving his 10 closest friends scarves for C
yarga [219]

Answer:

$8

Explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the product.

Consumer surplus = willingness to pay - price

The consumer surplus of the 10th scarf :

Willingness to pay for the 10th scarf - price of the scarf

Willingness to pay for the 10th scarf =  $200 / 10 = $20

Consumer surplus = $20 - $12 = $8

I hope my answer helps you

5 0
3 years ago
Read 2 more answers
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