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svetlana [45]
2 years ago
5

Prepare journal entries to record each of the following sales transactions of EcoMart Merchandising.EcoMart uses a perpetual inv

entory system and the gross method.Oct. 1 Sold fair trade merchandise for $1,500, with credit terms n∕30, invoice dated October 1. Thecost of the merchandise is $900.6 The customer in the October 1 sale returned $150 of fair trade merchandise for full credit. Themerchandise, which had cost $90, is returned to inventory.9 Sold recycled leather merchandise for $700, with credit terms of 1∕10, n∕30, invoice datedOctober 9. Cost of the merchandise is $450.11 Received payment for the amount due from the October 1 sale less the return on October 6.
Business
1 answer:
user100 [1]2 years ago
4 0

Answer:

EcoMart Merchandising

Journal Entries

Oct. 1 Debit Accounts Receivable $1,500

Credit Sales Revenue $1,500

To record the sale of goods on account with credit terms n∕30, invoice dated October 1.

Debit Cost of goods sold $900

Credit Inventory $900

To record the cost of goods sold.

Oct. 6 Debit Sales Returns $150

Credit Accounts Receivable $150

To record the return of some goods sold on account.

Debit Inventory $90

Credit Cost of goods sold $90

To record the cost of goods returned.

Oct. 9 Debit Accounts Receivable $700

Credit Sales Revenue $700

To record the sale of recycled goods with credit terms of 1∕10, n∕30, invoice dated October 9

Debit Cost of goods sold $450

Credit Inventory $450

To record the cost of the goods sold.

Oct. 11 Debit Cash $1,350

Credit Accounts Receivable $1,350

To record the receipt of cash on account.

Explanation:

a) Data and Analysis:

Oct. 1 Accounts Receivable $1,500 Sales Revenue $1,500  with credit terms n∕30, invoice dated October 1.

Cost of goods sold $900 Inventory $900

Oct. 6 Sales Returns $150 Accounts Receivable $150

Inventory $90 Cost of goods sold $90

Oct. 9 Accounts Receivable $700 Sales Revenue $700 with credit terms of 1∕10, n∕30, invoice dated October 9

Cost of goods sold $450 Inventory $450

Oct. 11 Cash $1,350 Accounts Receivable $1,350

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If a product is to be properly commercialized, there must be integration between __________ and __________. a. marketing; after-
lana66690 [7]

Answer:

Option D Research & development and marketing.

Explanation:

Because research and development helps the company transform the product and bring easeness for the company to manufacture and compete in the market due to its features. The company also requires marketing strategy that best suits the introduction of products to its users which means it is very important to market the product because new products require greater level of marketing than ordinary products.

4 0
2 years ago
Merging and milking brands are examples of? creating brand extensions. increasing brand loyalty. liquidating brands from a produ
kompoz [17]

Merging and milking brands are examples of creating brand extensions.

Brand extension refers to the process in which a firm markets a new product by using its established brand names. It is a way to take advantage of the company’s already established brand equity to increase the market and reach of the new product.

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5 0
9 months ago
You were hired as a consultant to Quigley Company, whose target capital structure is 35% debt, 10% preferred, and 55% common equ
alexgriva [62]

Answer:

A. 8.15

Explanation:

WACC is the firm's weighted average cost for the capital that is employed from different sources which includes common equity, preferred equity and debt.

In order to calculate WACC, the weighted average cost of each capital is added, so the formula becomes:

WACC = (E x %E) + (D x (1 - Tax) x %D) + (PE x %PE)

E = Common equity

D = Debt

PE = Preferred equity

%E = Common equity / total capital

%D = Debt / total capital

%PE = Preferred equity / total capital

Tax = Tax rate

<em>Interest on debt is a tax deductible expense therefore the interest rate is taken after accounting for tax in order to calculate WACC.</em>

<u>Calculation:</u>

Using the above formula we can calculate WACC

WACC = (11.25% x 55%) + (6.5% x (1-40%) x 35%) + (6% x 10%)

WACC = 0.0815 or 8.15%

7 0
2 years ago
Economies of scale occur when:
inna [77]

Answer:

d long-run average total costs fall as output increases.

Explanation:

Economies of scale are cost benefits enjoyed by companies when they increase production. Fixed costs are spread over the units produced. When there is a high level of production, the fixed costs are spread over a large number of goods, which reduces the cost element per unit.

Economies of scale also apply to variable costs. The expanded production increases efficiency in the production process. This reduces the average variable costs. Economies of scales can be both internal and external. When a company has economies of scale, its products tend to be more competitive in the market.

3 0
2 years ago
A developer is proposing to build and operate an 8 store strip mall. Each unit would rent for $3,500 per month. It is expected t
lys-0071 [83]

Answer:

<u>Requirement A:</u> CAP Rate is 12.5%

<u>Requirement B:</u> Capitalized Value of the Property is $1,884,960

<u>Requirement C:</u> Loan Amount is $1,413,720

<u>Requirement D:</u> Debt Service Coverage Ratio is 1.85

<u>Requirement E:</u> Loan per unit is $176,715 Per Unit

Explanation:

<u>Requirement A:</u> Find the CAP Rate

The CAP Rate will be calculated using the following formula:

CAP Rate = Annual Net Operating Income (NOI) <u>(Step1)</u> / Property Capitalized Value <u>(Step2)</u>

Here

Operating Income is $235,620 (Step1)

Property Capitalized Value (Step2)

Now, by putting values we have:

CAP Rate = $235,620 / $1,884,960 = 12.5%

<u>Step1:</u> Find Annual Net Operating Income (NOI)

As we know that:

Operating Income = Expected Revenue - Operating Expense

Here

Expected Revenue from 8 Strip Malls = Rent / Month * 12 Months * (1 - Vacancy Ratio) * 8 Strips Malls

= $3,500 * 12 * (1 - 15%) * 8

= $285,600

Operating Expenses = Expected Revenue * 17.5%

= $285,600 * 17.5% = $49,980

Now by putting value in the above Operating Income equation, we have:

Annual Operating Income = $285,600 - $49,980 = $235,620

<u>Step2:</u> Find Property Capitalized Value (It is also <u>Requirement B</u>)

Property Capitalized Value = Annual Operating Income / Minimum Accepted Rate of Return (MARR)

Here

Annual Operating Income is $235,620 from Step1

MARR is 12.5%

By putting values, we have:

Capitalized Value of the Property = $235,620 / 12.5% = $1,884,960

<u></u>

<u>Requirement C. Find Loan Amount</u>

It is given in the question that the Loan Amount is 75% of Property Capitalized Cost. This implies:

Loan Amount = $1,884,960 * 75% = $1,413,720

<u>Requirement D. Debt Service Coverage Ratio</u>

Debt Service Coverage Ratio (DSCR) = Annual Net Operating Income / Total Debt Service for the Year

Here

Annual Net Operating Income is $235,620 from Step1

Total Debt Service for the Year $127,235 (See <u>Step3</u> below)

By putting values, we have:

Debt Service Coverage Ratio = $235,620 / $127,235 = 1.85

<u>Step3: Total Debt Service for the year</u>

Total Debt Service for the year = Loan Amount * Debt Service Rate

Here

Loan Amount is $1,413,720

Debt Service Rate is 9%

By putting values, we have:

Total Debt Service for the year = $1,413,720 * 9% = $127,235

<u>Requirement E. Find Loan Amount</u>

We can find loan per unit by simply dividing the loan amount by number of strip mall. Here total number of strip mall are 8. This implies that:

Loan Per Unit = $1,413,720 / 8 Units = $176,715 Per Unit

3 0
2 years ago
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