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melomori [17]
2 years ago
5

On October 5, your company buys and receives inventory costing $5,000, on terms 2/30, n/60. On October 20, your company pays the

amount owed relating to the October 5 purchase. Prepare the journal entries needed on October 5 and 20, assuming the company uses a perpetual system and records purchase discounts using the gross method
Business
1 answer:
lisov135 [29]2 years ago
7 0

Answer:

October 5

                              Debit        Credit

Inventory                 5000

Accounts Payable                     5000

October 20

Accounts Payable 5000

Cash                                      4900

Discount                                   100

Explanation:

The terms 2/30, n/60 mean that the company has to pay the $5000 within 60 days and if they pay the money within 30 days they will get a 2 percent discount. As we are using the gross method we will assume that the company will pay in full and if the company avails the discount we will adjust later.

On October 5 our company buys inventory worth $5000 on credit therefore we record this transaction by debiting inventory by 5000 and crediting accounts payable by 5000.

On October 20 the company makes eh payment which means that they will get a 2 percent discount. So we will debit accounts payable by 5000 as it is the total amount owed. We will debit cash by 4900 because a 2 percent discount on 5000 is 100. (5000-(5000*0.02))= 4900. After that we will credit discount by 100 to record the fact that we got a 100 dollar discount on this transaction.

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Depreciation, a type of expense, is included in the ________ category.
qaws [65]

Answer:

General and administrative

Explanation:

Financial statements can be defined as a document used for the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.

Generally, financial statements are the formally written records of the business and financial activities of a business entity or organization.

There are four (4) main types of financial statements and these are;

1. Balance sheet: it contains financial information about assets, liability, and equity.

2. Cash flow statement: it contains financial information about operating, financial and investing activities.

3. Income statement: it contains financial information about the income and expenses of an organization.

4. Statement of changes in equity: it contains financial information about profits or loss, dividends, etc.

Depreciation can be defined as a process in which the monetary or financial value with respect to an asset decrease or falls over time as a result of wear and tear.

This ultimately implies that, depreciation is a process which typically involves the general fall in the value of an asset such as currency, plant equipment or machinery etc over a specific period of time.

Basically, depreciation is a type of expense and it is included in the general and administrative (G&A) category of a balance sheet.

A general and administrative (G&A) can be defined as the expenditures that are required for the smooth running or operations of a business, which are not associated with the manufacturing of goods.

6 0
2 years ago
Suppose Jones Company manufactures chairs. One model is the executive chair that sells for $120. Jones Company projects sales of
Anestetic [448]

Answer:

$32,000

Explanation:

Cost of goods sold refers to all direct expenses incurred in producing goods and excludes all selling and indirect costs.

Cost of goods sold = Sales value - Gross Profit

Gross profit = Sales value - Direct costs - overhead costs

Gross profit per unit = $120 - ($50 + $ 20 + $10)

Gross profit per unit = $40 per unit

Gross profit in value = $40 per unit × No of units = $40 × 400 units = $16,000

Budgeted sales value = Selling price per unit × Budgeted sales units

                                     = $120 × 400 chairs = $48000

Thus, budgeted cost of goods sold = Budgeted sales value - Gross Profit in value

= $48000 - $16000 = $32000

<u>Note</u>: While computing gross profit, selling and administrative expenses would be excluded since those are used while computing net income. Also, cost of goods sold excludes selling and administrative i.e . indirect costs.

5 0
3 years ago
A laissez faire economic policy would _____.
Dima020 [189]
B- allow the economy fix itself. laissez-faire means to let free or to let be
5 0
3 years ago
Read 2 more answers
Assume there is a fixed exchange rate between the Euro and U.S. dollar. The expected return and standard deviation of return on
drek231 [11]

Answer:

13.50%

Explanation:

From the given information ; we use EXCEL to compute the Dataset given and use it to determine the expected return on what the stock portfolio would be.

Check the attached file below for the solution in Excel Sheet.

8 0
3 years ago
Denise Hunter had Thomasville brand living room furniture and wanted to buy a particular chair of the same brand. She made a few
miskamm [114]

Answer:

a specialty product

Explanation:

Based on the scenario being described within the question it can be said that For Denise, the chair can be categorized as being a specialty product. This is a product that very specific individuals will seek to purchase due to the product's unique characteristics or the individuals loyalty to a specific brand. Which is the case with Denise, since she is loyal to the brand and wanted a chair only from that specific brand.

7 0
2 years ago
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