Answer:$5400
Explanation:
In sales merchandise a seller can give a trade or a cash discount. A trade discount is giving based on the volume of sales, while a cash discount is giving to encourage prompt cash payment and it will be accorded the buyer once the conditions of payment is met.
The above scenario is a cash discount which means 2% cash discount will be giving if payment is made whithin 10 days and it should be made within 30 days. The amount of cash discount is there after deducted from the income statement as an expenses, though for the trade discount this is deducted directly to the sales journal.
Swift only return goods of $5400 and this is the amount to be recognized as purchase return.
This can be worked out as under:
rakhivasavada :
Required Rate of Return r(m) = r(f) + b r(p), where r(f) is the risk free rate and the r(p) is the risk premium and b is beta and therefore:
r(m) = 3.00 + 1.20 * 5.5 = 9.6%.
rakhivasavada :
Hence current price P(0),
= D1/(1+k) +D2/(1+k)^2 + D3/(1+k)^3 + D4/(1+k)^4 + P4/(1+k)^4
D1 = D0 * 1.25 = 1.25*1.25 = 1.25^2
D2 = 1.25D1 = 1.25^3
D3 = 1.25D2 = 1.25^4
D4 = 1.25D3 = 1.25^5
D5 = 1*D4 = 1.25^5 (g = 0, so (1+g) =1)
P4 = D5/k = 1.25^5/0.096
So, P(0)
= 1.25^2/1.096 +1.25^3/1.096^2 +1.25^4/1.096^3 +1.25^5/1.096^4 +1.25^5/(0.096*1.096^4)
= 29.05
rakhivasavada :
I am sure this would help...
rakhivasavada :
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Answer:
Explanation:
The journal entry is shown below:
Bonds payable A/c Dr $2,000,000
Loss on early retirement on bonds A/c Dr $85,000
To Cash A/c $2,040,000 ($2,000,000 × 1.02)
To Discount on bonds payable A/c $45,000
(Being the redemption of bond is recorded)
The loss on early retirement on bond is computed below:
= $2,040,000 - $1,955,000
= $85,000
Answer:
Decision : It would be better to Replace Old Machine
Explanation:
Check the file attached for proper arrangement and explanation of the solution. Thank you.
A bakery invests a portion of profits into sending its employees to a training on how to use more energy-efficient ovens that also can hold more baked goods. Hoping to achieve by investing in the training, the goal of the bakery is increase productivity. The new learning to employees will help them how to use more of the energy-efficient ovens and probably find a way that they won't have to waste more electricity and produce more baked goods.
The answer would be letter A.
