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slavikrds [6]
3 years ago
10

Universal Travel Inc. borrowed $500,000 on November 1, 2013, and signed a 12-month note bearing interest at 6%. Interest is paya

ble in full at maturity on October 31, 2014. In connection with this note, Universal Travel Inc. should report interest payable at December 31, 2013, in the amount of:
A. $8,000.
B. $30,000.
C.$5,000.
D. $25,000.
Business
1 answer:
valentinak56 [21]3 years ago
6 0

Answer:

C.$5,000.

Explanation:

November 1, 2013

Amount of Loan = $500,000

As the Interest is payable at maturity, at December 31, 2013 only one month of interest expense is accrued, which is not paid, Following Journal entry will be passed tor record the interest expense.

Dr.  Interest Expense               $2,500

Cr.  Interest Payable on Note  $2,500

Interest Expense = $500,000 x 6% x 2/12 = $5,000

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Accompanying the bank statement was a debit memorandum for an NSF check received from a customer. This item would require an adj
tamaranim1 [39]

Answer:

The correct answer is debit accounts receivable, credit cash.

Explanation:

Note debit is a receipt that a company sends to its client, in which it is notified that it has charged or debited a certain sum or value in its account, for the concept indicated in the same note. This document increases the value of the debt or account balance, whether due to an error in billing, interest for late payment, or any other circumstance that means an increase in the balance of an account.

6 0
2 years ago
In 2019, Alliant Corporation acquired Centerpoint Inc. for $352 million, of which $62 million was allocated to goodwill. At the
Kazeer [188]

Solution:

The reporting unit's book value of $250 million meets the market value of $220 million.

Requirement 1:

Determination of implied fair value of goodwill:

Fair value of Center point, Inc.                                               $220 million

Fair value of Center point’s net assets (excluding goodwill) 200 million

Implied fair value of goodwill                                                 $ 20 million

Measurement of impairment loss:

Book value of goodwill                           $62 million

Implied fair value of goodwill                  20 million

Impairment loss                                       $42 million

Requirement 2: If the operating unit's market valuation of 270 million dollars surpasses 250 million dollars, there is no depreciation risk.

4 0
3 years ago
Cash $ 14,000 Accounts payable $ 42,000 Receivables 70,000 Other current liabilities 28,000 Inventories 210,000 Total CL $ 70,00
Tcecarenko [31]

Answer:

The ROE will increase by 7.69% to 14.29% from 7.5%

Explanation:

Current liabilities:

account payable 42,000

Other  28,000

Total Liabilities: 70,000

IF we want a current ratio of 2.3 then:

70,000 x 2.3 = 161,000 Current assets are needed.

Right now, the companny has 294,000 current assets so it will make inventories decrease by:

294,000 - 161,000 = 133,000

Then with that will purchase common stock:

280,000 - 133,000 = 147,000 common stock will be outstanding

The Return on equity will be:

21,000 / 147,000 = 0.142857 = 14.29%

While currently the ROE is:

21,000/280,000 = 0.075 = 7.5%

There will be an increase for: 14.29 - 7.5 =  6.79%

3 0
3 years ago
At December 31, 2011 the accounting records of Gordon, Inc. contain the following items: If the Notes Payable is $10,000, the De
Vadim26 [7]

The question is incomplete. The complete question is as follows,

At December 31, 2011 the accounting records of Gordon, Inc. contain the following items:

Accounts Payable 2500

Land 30000

Building 31250

Notes Payable ?

Retained earnings 125000

Accounts Receivable 18750

Cash ?

Equipment 40000

Capital Stock 12500

If the Notes Payable is $10,000, the December 31, 2011 cash balance is:

Answer:

Cash = $30000

Explanation:

The accounting equation states that the sum of total assets is always equal to the sum of total liabilities plus total equity. We can state the equation as follows,

Total Assets = Total Liabilities + Total Equity

So,

(30000 + 31250 + 18750 + 40000 + Cash) = (2500 + 10000) + (125000 + 12500)

120000 + Cash = 12500 + 137500

Cash = 150000 - 120000

Cash = $30000

6 0
3 years ago
​Mercer, Inc. provides the following data for​ 2019: Net Sales Revenue Cost of Goods Sold The gross profit as a percentage of ne
Setler [38]

The question is incomplete as it is missing the figures. The complete question is,

Mercer, Inc. provides the following data for​ 2019:

Net Sales Revenue 598000

Cost of Goods Sold 350000

The gross profit as a percentage of net sales is​ ________. (Round your answer to two decimal​ places.)

Answer:

Gross profit as a percentage of net sales = 0.4147 or 41.47%

Explanation:

The gross profit is a profit earned by a business through its trading activity. It is calculated by deducting the cost of goods sold from the net sales revenue and it is the profit earned by a business before deducting any operating and non operating expenses of the business.

Gross profit = Net Sales - Cost of goods sold

Gross Profit = 598000 - 350000   = $248000

The gross profit as a percentage of net sales is,

Gross profit as a percentage of net sales = Gross profit / Net Sales

Gross profit as a percentage of net sales = 248000 / 598000

Gross profit as a percentage of net sales = 0.4147 or 41.47%

5 0
3 years ago
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