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3 years ago

The entry to record a purchase of $5,000 on account, terms of 2/10, n/30, would include a

Business

2 answers:

hoa [83]3 years ago

6 0

credit to Account Payable for $5,000

Nezavi [6.7K]3 years ago

4 0

Calculate, from the following information accumulated by Bob Verna, the adjusted cash balance at the end of July.

Bank statement ending cash balance $6,000

General ledger cash balance ending 8,500

Bank monthly service charge 90

Deposits in transit 5,000

Outstanding cheques 3,000

NSF cheque returned with bank statement 410

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Allstar Exposure designs and sells advertising services to small, relatively unknown companies. Last month, Allstar had sales co

Mariana [72]

Answer:

1. Prepare an income statement for Allstar for the past month.

The income statement is given below.

Sales $ 410,000

Commission Cost ($ 50,000)

Technology Cost ($ 75,000)

R/D Cost* ($ 200,000)

Selling expenses ($ 10,000)

Admin expenses ($ 35,000)

Net profit $ 40,000

* In absence of information it is assumed that research and development costs of $200,000 meet defination of expense as per accounting standard (IAS 38).

2. Briefly explain why Allstar's income statement has no line for cost of goods sold.

As per question Allstars is a service oriented company. In services oriented company there is no good that company is manufacturing and selling. So there will not be any cost of good sold line item in income statement.

6 0

3 years ago

Read 2 more answers

Gary’s Company produces high quality shirts. Shirts must be well made because of frequent washings. Currently, Gary sells 10,000

grin007 [14]

Answer:

Unless the capacity is expanded or some of the production gets outsource, the offer is not convenient.

Explanation:

Giving the following information:

Currently, Gary sells 10,000 shirts at $60 each with the capacity to produce 11,000 shirts. Gary is considering a special order for 1,800 shirts for $40.

Gary has the following costs:

Unit Costs $200,000

Facility Costs $140,000

If Gary accepts the special order, they will incur an additional $2 per shirt in foreign currency transaction costs.

Because it is a special offer and there is unused capacity, we will not have into account the fixed costs.

variable cost per unit= (200,000/10,000) + 2= $22

Effect on income= (40 - 22)*1,800= $32,400

We have to take into account the loss of not selling 1,000 units.

Effect on income= 1,000*40= $40,000

Total effect= 32,400 - 40,000= $7,600

Unless the capacity is expanded or some of the production gets outsource, the offer is not convenient.

6 0

3 years ago

Assume that on July 1, 2018, Togo's Sandwiches issues a $2.97 million, one-year note. Interest is payable at maturity.

allsm [11]

Answer:

7% interest at Cec-31 for 6 months:

Dr Interest expense(7%*$2,970,000*6/12) $ 103,950

Cr Interest payable $103,950

9% interest at Sept 30 for 3 months:

Dr Interest expense(9%*$2,970,000*3/12) $66,825

Cr Interest payable $66,825

6% interest at Oct 31 for 4 months:

Dr Interest expense(6%*$2,970,000*4/12) $ 59,400

Cr Interest payable $59,400

8% interest at Jan 31 for 7 months:

Dr Interest expense(8%*$2,970,000*7/12) $138,600

Cr Interest payable $ 138,600

Explanation:

The rationale for debiting interest expense is that is an expense account and increase in expense is normally debited to expense account while interest payable account is credited as the interest obligations are yet discharged by a way of paying cash to investors

5 0

3 years ago

Which of the following activities is not a component of the operating cycle?A)Sale of merchandiseB)Payment of employees' salarie

Sloan [31]

Answer:

B)Payment of employees' salaries

Explanation:

Operating cycle: The operating cycle is that cycle in which the firm makes the collection of cash with respect to the sales and make the payment with respect to the purchase of the inventory

The cycle start from days of inventory outstanding, days of sales outstanding, and days of payable outstanding

In mathematically,

Operating cycle = days of inventory outstanding + days of sales outstanding - days of payable outstanding

Thus, option B is correct.

8 0

3 years ago

The _____ principle holds that when industrial activity poses a risk, even if the threat is as yet poorly understood, prudence c

Nikitich [7]

<span>It is a precautionary principle when industrial activity poses a risk, even if the threat is as yet poorly understood, prudence calls for restraint. set of methods and procedures for aligning corporate strategies, policies, and operations with principles that protect ecosystems. </span>

4 0

3 years ago