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melomori [17]
3 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]3 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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the market price of northern mills stock has been relatively volatile and you think this volatility will continue for a couple m
taurus [48]

The  answer is $120.

Explanation: The computation of the net profit or loss is shown below: Before that we have to determine the following calculations

Net Profit from call option is = (Gain from Exercising Call Option - Option Premium paid) × Size of the Contract

= (($47 - $42) - $2.60) × 100 Shares

= $240

Net Loss from put option is

= (Option Premium paid) × Size of the Contract

= $1.20 × 100 Share

= $120

So, the net profit is  = Net Profit from Call Option - Net loss from Put Option= $240 - $120

= $120

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5 0
1 year ago
Custom Homebuilders (CH) designs and constructs high-end homes on large lots owned by customers. CH has developed several formul
Alexandra [31]

Answer:

$981,000 - Total Building Cost

Explanation:

To answer this question, we were told that the customer wants to build a moderate 3,800 square foot home. However, although it says with no utilities, utility cost will be applicable because it represents what is needed by the builders and engineers to get their work done on the vacant lot of land.

Therefore,  the cost to build = Administrative cost +  Building cost (moderate) + appliances cost + utilities cost

= $40,000 + (220 x 3800 square foot) + $45,000+ $60,000

=$40,000 + $836,000 + $45,000+ $60,000

= $981,000

6 0
3 years ago
A company was the victim of several frauds that totaled approximately $10 million in one year. With a profit margin of 10 percen
Arisa [49]

Answer:

100,000

Explanation:

Given that

Approximately frauds = $10 million

Profit margin = 10%

And the sale value of the product per unit = $1,000

So by considering the above information, the additional units is

= Approximately frauds × Profit margin

= $10 million × 10%

= 100,000

So by multiplying the approximate frauds with the profit margin we can get the additional units

8 0
3 years ago
Companies HD and LD have the same tax rate, sales, total assets, and basic earnings power. Both companies have positive net inco
sukhopar [10]

Answer:

Company HD pays less in taxes

Explanation:

In the case when the company HD and LD have the similar rate of tax, sales revenue,  etc even both have favorable net incomes also the company Hd contains greater debt ratio due to which it has more interest expense so that means company hd would pay less taxes

Therefore the above represent the answer

and, this is the answer but the same is not provided in the given options

5 0
2 years ago
Read 2 more answers
Dividends paid to common stockholders ______ be deducted from the payer's taxable income for tax purposes.
Grace [21]

Dividends paid to common stockholders cannot be deducted from the payer's taxable income for tax purposes.

<h3>What is Dividend Payments?</h3>

Dividends are paid only on outstanding shares of common stock. Since the payments are the distribution of a company's profits to its shareholders, dividend payments decrease both the cash and the shareholders' equity balance shown on the issuing corporation's balance sheet.

Since they are paid on each share, the amount of cash distributed to each shareholder is based on the amount of shares they own.

<h3>Are dividends paid to common stockholders?</h3>

Dividends are paid only on outstanding shares of common stock.

A common stock dividend is the dividend paid to common stock owners from the profits of the company. Like other dividends, the payout is in the form of either cash or stock. The law may regulate the size of the common stock dividend particularly when the payout is a cash distribution tantamount to a liquidation.

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3 0
1 year ago
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