Answer:
patent 301,350 debit
cash 301,350 credit
franchise 633,600 debit
cash 633,600 credit
development expense 189,000 debit
cash 189,000 credit
year-end adjustment:
amortization expense 50,225 debit
patent 50,225 credit
amortization expense 31,680 debit
patent 31,680 credit
Explanation:
The patent and franchise will be activate as there is a certain possibility to produce positive cashflow in the future.
They will be adjusted at year-end for amortization:
301,350 / 6 = 50,225 amortization on patent
633,600 / 10 = 63,360 amortization on franchise
As it was concede on July 1st then, we will do half-year
63,360 / 2 = 31,680
The development cost will be treated as expense as there is no precise information that can determined the development cost which yield a positive outcome.
Answer: (A) Guaranty fund
Explanation:
According to the given question, the Guaranty fund is one of the type of fund that basically helps in paying the various types of unpaid claims.
This type of funds are basically covering the beneficiaries of the insurance organization in which the insurer are basically helps in selling the various types of products and the services in the market.
The guaranty funds is typically used by the administrator for the purpose of protecting the policyholder in the insurance firm.
Therefore, Option (A) is correct answer.
Answer:
$240,500
Explanation:
We know that
Current ratio = Total Current assets ÷ total current liabilities
= $2,141,000 ÷ $842,000
= 2.5 times
For current ratio falling below 2.2, we have to assume the borrowed amount be X
So, the equation would be
$2,141,000+ X ÷ $842,000 + X = 2.2
$2,141,000+ X = 2.2 × ($842,000 + X)
$2,141,000+ X = $1,852,400 + 2.2X
$2,141,000 - $1,852,400 = 2.2X - X
$288,600 = 1.2X
So X would be $240,500
Answer:
I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.
II. The seller wants to avoid future lost sales.
III. The seller wants to keep a customer happy.
IV. Sold merchandise was defective or unacceptable.
Explanation:
Sales allowance can be defined as a reduction in the price of goods that a seller gives to a customer due to quality issues, incorrect pricing, shipping, etc.
The statements which best summarize why a seller would give a sales allowance are;
I. In order to entice a customer to keep damaged or defective merchandise, the seller is willing to decrease the selling price.
II. The seller wants to avoid future lost sales.
III. The seller wants to keep a customer happy.
IV. Sold merchandise was defective or unacceptable.
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