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pshichka [43]
3 years ago
8

Paul and Roger are partners who share income in the ratio of 3:2. Their capital balances are $90,000 and $130,000, respectively.

Income Summary has a credit balance of $50,000 after the second closing entry. What is Roger's capital balance after closing Income Summary to the capital accounts?
A) $150,000

B) $110,000

C)$115,000

D) $155,000
Business
1 answer:
andreyandreev [35.5K]3 years ago
6 0

Answer:

A) $150,000

Explanation:

The computation of the roger's capital balance is shown below:

= Opening capital balance of Roger + profit of roger

where,

Profit of roger = Net income × (Roger share ÷ total share)

                       = $50,000 × (2 ÷ 5)

                        = $20,000

And, the opening balance of Roger is $130,000

Now put these values to the above formula  

So, the value would equal to

= $130,000 + $20,000

= $150,000

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LO 8.5Identify several causes of a favorable labor rate variance.
arlik [135]

Answer and explanation:

Direct labor rate variance contrasts current direct labor costs over the same duration of service with usual direct labor costs. Favorable fluctuations in the labor rate can be caused by hiring more unskilled workers, reducing the minimum wage, and inappropriately setting indirect labor costs.

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On July 1, Year 1, Danzer Industries Inc. issued $40,000,000 of 10-year, 7% bonds at a market (effective) interest rate of 8%, r
Tomtit [17]

Answer:

1.Dr Cash 37,282,062

Dr Discount on bonds payable 2,717,938

  Cr Bonds payable 40,000,000

2a.Dr Interest expense 1,535,896.90

Cr Cash 1,400,000

Cr Discount on bonds payable 135,896.90

b.Dr Interest expense 1,535,896.90

  Cr Cash 1,400,000

  Cr Discount on bonds payable 135,896.90

3.$1,535,896.90

4. Yes

5.$37,282,000

Explanation:

1. Preparation of the Journal entry to record the amount of cash proceeds from the issuance of the bonds on July 1, Year 1.

Dr Cash 37,282,062

Dr Discount on bonds payable 2,717,938

(40,000,000-37,282,062)

  Cr Bonds payable 40,000,000

2. Preparation of the Journal entries to record the following:

a. Journal entry to record the first semiannual interest payment on December 31, Year 1, and the amortization of the bond discount

First coupon payment December 31, Year 1, f

Dr Interest expense 1,535,896.90

(1,400,000+135,896.90)

Cr Cash 1,400,000

Cr Discount on bonds payable 135,896.90

(2,717,938 / 20 coupons = $135,896.90)

b. Journal entry to record the interest payment on June 30, Year 2, and the amortization of the bond discount

June 30, Year 2, second coupon payment

Dr Interest expense 1,535,896.90

    Cr Cash 1,400,000

  Cr Discount on bonds payable 135,896.90

(2,717,938 / 20 coupons = $135,896.90)

3. Calculation to Determine the total interest expense for Year 1.

Cash 1,400,000 + Discount on bonds payable 135,896.90 = $1,535,896.90

4. Yes the bond proceeds will always be less than the face amount of the bonds in a situation where the contract rate is less than the market rate of interest because if we have a high market rate than the coupon, this would mean that the bonds will sell at a discount

5. Computation for the price of $37,282,062 received for the bonds using the present value tables

PV factor, 4%, 20 periods =0.4564

PV annuity factor, 4%, 20 periods =13.590

Present Value (Face value) = $40,000,000 x 0.4564 = $18,256,000

PV of coupon payments = $1,400,000 x 13.590 = $19,026,000

Therefore the bond's market price will be:

Present Value (Face value) +PV of coupon payments

Bond's market price = $18,256,000 + $19,026,000

b

Bond's market price = $37,282,000

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