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kodGreya [7K]
3 years ago
8

On April 1, 2021, Shoemaker Corporation realizes that one of its main suppliers is having difficulty meeting delivery schedules,

which is hurting Shoemaker's business. The supplier explains that it has a temporary lack of funds that is slowing its production cycle. Shoemaker agrees to lend $450,000 to its supplier using a 12-month, 12% note.Required:The loan of $450,000 and acceptance of the note receivable on April 1, 2021.The adjustment for accrued interest on December 31, 2021.Cash collection of the note and interest on April 1, 2022.
Business
1 answer:
Vlad [161]3 years ago
6 0

Answer:

Explanation:

The journal entries are shown below:

1.  Notes receivable A/c Dr $450,000

          To Cash A/c                               $450,000

(Being the notes receivable acceptance is recorded)

2. Interest receivable A/c Dr $40,500

      To Interest revenue                       $40,500

(Being the interest is collected)

Interest = Principal × rate of interest × number of months ÷ (total number of months in a year)

= $450,000 × 12% × (9 months ÷ 12 months)

= $40,500

The 3 months is calculated from April 1 to December 31

3.  Cash A/c Dr $504,000

             To Notes receivable A/c $450,000

             To  Interest receivable A/c $40,500

             To Interest revenue A/c      $13,500

(Being cash collected recorded)

Interest revenue = Principal × rate of interest × number of months ÷ (total number of months in a year)

= $450,000 × 12% × (3 months ÷ 12 months)

= $13,500

The 3 months is calculated from December 31 to April 1

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Explanation:

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2 years ago
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Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $215. Data for last year’
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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Selling price= $215

Units in beginning inventory 0

Units produced 9,800

Units sold 9,300

Units in ending inventory 500

Variable costs per unit:

Direct materials $ 61

Direct labor 33

Variable manufacturing overhead 10

Variable selling and administrative 15

Total variable cost per unit $ 119

Fixed costs:

Fixed manufacturing overhead $ 274,400

Fixed selling and administrative 510,000

Total fixed costs $ 784,400

Absorption costing includes fixed manufacturing overhead in the cost per unit.

A) Unitary fixed manufacturing overhead= 274,400/9800 units= $28

Unitary cost= Direct materials + Direct labor + Variable manufacturing overhead + fixed manufacturing overhead

Unitary cost= 61 + 33 + 10 + 28= $132

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Gross profit= $771,900

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Net operating income= $122,400

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