Answer:
debit cash $250,000; credit notes payable $250,000
Explanation:
July 1, journal entries should be:
- Dr Cash account 250,000
- Cr Notes Payable account 250,000
Since cash is an asset account and it increases (the company receives money), it should be debited.
Since notes payable is a liability account and it increases, it should be credited.
Answer:
Explicit cost = $2,000,000
Explanation:
Explicit costs
<u><em>Explicit costs</em></u><em> are out-of-pocket expenditures incurred for the purpose of a project or business, They represent cash outflow expenses which actually involve the payment for cash. For example, the $2 million cost of building the warehouse and office. </em>
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Implicit costs
<em>On the other hand</em><u><em>, implicit costs </em></u><em>are the value of the benefit sacrificed in favor of a decision. They are known as opportunity cost. For example, the $5000 per year which Munif would forgo if he expands the business. </em>
Answer: B. FIFO method
Explanation: The inventory prices of goods as calculated by a firm will remain the same at year end if a firm's inventory price is automatically updated on account of any additional inventory purchase and also if done on a periodic basis. This will occur only when the inventory pricing system is based on First-in-First-out method, whereby the prices of first inventory purchase is first associated or applied on goods sold until the unit in the inventory is exhausted. This allows prices of goods to move based on period of purchase where older prices gets precedence over the newer inventory purchase.
Answer:
sale on account
Explanation:
When a sales is made and payment is expected at a future date, a sales on account occurs, e.g.:
January 2, 2020, 5,000 units sold at $10 each to ABC company, credit terms 2/10, n/30. Cost of goods sold is $30,000
Dr Accounts receivable 50,000 (5,000 x 10)
Cr Sales revenue 50,000
Dr Cost of goods sold 30,000
Cr Merchandise inventory 30,000
After the invoice is collected, the journal entry would be:
January 30, 2020, invoice collected from ABC company
Dr Cash 50,000
Cr Accounts receivable 50,000
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