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jasenka [17]
3 years ago
9

On December 1, 2016, Insto Photo Company purchased merchandise, invoice price $25,000, and issued a 12%, 120-day note to Ringo C

hemicals Company. Insto uses the calendar year as its fiscal year and uses the perpetual inventory system.
Business
1 answer:
Leto [7]3 years ago
3 0

Answer:

See explanation section

Explanation:

Requirement A

                            Insto Photo Company

                                  Journal Entries

Date                             Accounts Name                    Debit          Credit

December 1, 2016     Inventory                              $25,000

                                           Notes payable                                 $25,000

<em>Note</em>: As the merchandise company issued a note for the credit purchase of merchandise inventory, notes payable is used instead of accounts payable.

Dec. 31, 2016             Interest expense                      $250

                                               Interest payable                             $250

<em>Note: </em>Adjusting entry is needed as the fiscal year is ended on 31st December, therefore, there will be an accrued interest expense to be paid for one month. The calculation of interest expense = $25,000 × 12% × (30 ÷ 360) [assuming  1 year = 360 days, 1 month = 30 days]. = $250 for one month's accrual.

Requirement B

March 31, 2017           Interest expense                     $   750

                                   Interest payable                      $   250

                                   Notes payable                       $25,000

                                                      Cash                                      $26,000

<em>Note:</em> At the end of the maturity date, the buyer will pay all the bills of the notes plus interest. Interest payable becomes debit as it did not pay by the buyer on 31st December, 2016. The remaining interest = $25,000 × 12% × (90 ÷ 360) = $750. Total cash will be paid after the maturity = $25,000 + $250 + $750 = $26,000.

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VikaD [51]

Answer:

Results are below.

Explanation:

Giving the following information:

In June, Bedford Company sold 350 widgets. The average sales price was $34. During the month, fixed costs were $6,320 and variable costs were 40% of sales.

F<u>irst, we need to calculate the unitary variable cost:</u>

Unitary variable cost= 34*0.4= $13.6

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contribution margin per unit= selling price - unitary variable cost

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contribution margin ratio= contribution margin per unit/selling price

contribution margin ratio= 20.4/34

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<u>To calculate the break-even point in units and dollars, we need to use the following formula:</u>

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Break-even point in units= 6,320/20.4

Break-even point in units= 310 units

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Margin of safety= (current sales level - break-even point)

Margin of safety= 350*34 - 10,533

Margin of safety= $1,367

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Break-even point in units= (fixed costs + desired profit) / contribution margin per unit

Break-even point in units=  (6,320 + 4,000) / 20.4

Break-even point in units= 506 units

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Break-even point (dollars)= 10,320/0.6

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3 years ago
Karen and Ethan execute the same roles and responsibilities at their organization. However, Ethan earns more than Karen. Under t
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Answer:

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Option A is no longer legally accepted or ethical. Perhaps during the era of segregation back in 1960s' this option could have been acceptable. But today it is illegal and is considered as a violation of basic human rights.

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3 years ago
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SIZIF [17.4K]

Answer:

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Therefore, The company's cost of equity capital is 0.056

3 0
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