Delta Diamonds uses a periodic inventory system. The company had five one-carat diamonds available for sale this year: one was p
1 answer:
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Answer:
correct option is a. $617,911
Explanation:
given data
issued = $600,000
rate = 10 %
time 5 year
amount = $648,666
effective-interest rate = 7%
solution
we get here carrying value so first we get here Interest paid per semiannual period that is
Interest paid per semiannual period = $600000 ×10% ×
Interest paid per semiannual period = $30000
and
Interest expense on 30 June = $648666 × 7% ×
Interest expense on 30 June = $22703
and
Interest expense on 30 December = $641369 × 7% ×
Interest expense on 30 December = $22448
so
Interest expense on 30 June = ($641369 - $7552) × 7% ×
Interest expense on 30 June = $22184
and
Interest expense on 30 December = ($633817 - $7816) × 7% ×
Interest expense on 30 December = $21910
so as that we get Carrying value of 1st January that is
Carrying value of January 1 = $633817 - $7816-8090
Carrying value of January 1 = 617911
so correct option is a. $617,911
Answer:
A) Adjusting entries:
Dr Sales salaries expense 2,400
Cr Sales salaries payable 2,400
Dr Selling expenses 2,100
Cr Prepaid selling expenses 2,100
Dr Cost of goods sold 3,700
Dr Merchandise inventory 3,700
B) prepare the closing entries
Dr Sales revenue 550,900 (net = $557,000 - $19,900 - $6,200)
Cr Income summary 550,900
Dr Income summary 484,200
Cr Cost of goods sold 239,700 (net = $236,000 + $3,700)
Cr Sales salaries expense 62,400 (net = $60,000 + $2,400)
Cr Selling expense 44,100 (net = $42,000 + $2,100)
Cr Utilities expense 21,000
Cr Administrative expense 117,000
Dr Income summary 66,700 (= $550,900 - $484,200)
Cr Retained earnings 66,700
Dr Retained earnings 45,000
Cr Dividends 45,000
