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3 years ago

Pirates Incorporated had the following balances at the beginning of September.

Business

1 answer:

dimulka [17.4K]3 years ago

5 0

Answer:

Journal Entries:

September 1:

Debit Cash $3,700

Credit Service Revenue $3,700

To record the provision of services for cash.

September 2:

Debit Land $5,400

Credit Long-term Note Payable $5,400

To record the purchase of land from Crimson company.

September 8:

Debit Accounts Receivable $5,000

Credit Service Revenue $5,000

To record the provision of services on account.

September 10:

Debit Supplies $1,000

Credit Accounts Payable $1,000

To record the purchase of supplies on account.

September 13:

Debit Long-term Notes Payable $3,000

Credit Cash Account $3,000

To record the payment to Crimson Company on long-term note.

September 18:

Debit Cash Account $4,000

Credit Accounts Receivable $4,000

To record the cash receipt from customers.

September 20:

Debit Rent Expense $800

Credit Cash Account $800

To record the payment of September's rent.

September 30:

Debit Utilities Expense $1,500

Credit Cash Account $1,500

To record the payment of September's utility bill.

September 30:

Debit Salaries Expense $3,000

Credit Cash Account $3,000

To record the payment of salaries for the month.

September 30:

Debit Dividend $1,000

Credit Cash Account $1,000

To record the payment of cash dividend to shareholders.

Explanation:

a) PIRATES INCORPORATED

Trial Balance

As of September 1

Accounts Debits Credits

Cash $5,500

Accounts Receivable 1,500

Supplies 6,600

Land 10,200

Accounts Payable 6,500

Notes Payable 2,000

Common Stock 8,000

Retained Earnings 7,300

Totals $23,800 $23,800

b) Pirates' Journal entries are made as business transactions occur on a daily basis. They are the first set of records in the accounting books. They identify the accounts to be debited and the accounts to be credited in the general ledger.

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Answer:

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3 years ago

Hurte-Paroxysm Products, Inc. (HP) of the United States exports computer printers to Brazil, whose currency, the reals (symbol R

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Answer:

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The short-run impact of each pricing strategy is as follows:

Alternative 1 Alternative 2

Reduce Price to $170 Maintain Price of $200

Gross profit $2,500,000 $3,200,000

Reduction in Gross Profit $1,500,000 $800,000

b. (2) maintain the same dollar price of $200, raise the real price in Brazil (to R$800 from R$680)to compensate for the devaluation, and experience a 20% drop in volume.

c. If HP maintains the same real price and same unit volume, the firm's gross profits will be $2,500,000.

Explanation:

a) Data and Calculations:

Exchange rate = R$3.40/US$

Current exports of printers per year to Brazil = 50,000

US unit price of printer in dollars = $200

Brazil unit price of printer in R$ equivalent = R$680 ($200 * R$3.40)

Unit price of printer in R$ when reals is devalued = R$800 ($200 * R$4.00)

The reduced dollar price with devaluation, when real price is maintained = $170 (R$680/R$4.00)

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Sales volume 50,000

Sales revenue $10,000,000 (50,000 * $200)

Direct costs 6,000,000 (50,000 * $120)

Gross profit $4,000,000

Alternative 1 Alternative 2

Reduce Price to $170 Maintain Price at $200

Sales volume 50,000 40,000 (50,000 * 80%)

Sales revenue $8,500,000 $8,000,000 ($200 * 40,000)

Direct costs 6,000,000 4,800,000 ($120 * 40,000)

Gross profit $2,500,000 $3,200,000 ($80 * 40,000)

Direct costs = $6m ($120 * 50,000) = $4.8m ($120 * 40,000)

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