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astraxan [27]
3 years ago
11

On February 1, 2020, Bonita Industries factored receivables with a carrying amount of $645000 to Sandhill Co.. Sandhill Co. asse

sses a finance charge of 3% of the receivables and retains 5% of the receivables. Relative to this transaction, you are to determine the amount of loss on sale to be reported in the income statement of Bonita Industries for February. Assume that Bonita factors the receivables on a without recourse basis. The loss to be reported is
Business
1 answer:
malfutka [58]3 years ago
5 0

Answer:

$19,350

Explanation:

The finance charge is 3%. If the 5% retention is a non-refundable security, then the total loss would be 8% (3%+5%).

The nature of the retention is not given, so it is considered that it is refundable, then the total loss would be $19,350 ($645,000*3%).

Thus, the total loss to be reported is $19,350

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East Hill Home Healthcare Services was organized five years ago by four friends who each invested $10,000 in the company and, in
kotegsom [21]

Answer:

1. Was East Hill Home Healthcare Services organized as a sole proprietorship, a partnership, or a corporation?

East Hill Home Healthcare Services should be considered a closed corporation since there is a small number of stockholders and its shares are not traded in an open trade market.

2. During the current year, the records of the company were inadequate. You were asked to prepare the summary of the preceding transactions.

Since there is not enough room here, I used an excel spreadsheet.        

4. What amounts do you need? If some amount is missing, look at the attached PDF.

total assets = $870,000

total liabilities = $280,000

total equity = $590,000

current assets = $134,500

current liabilities = $100,000

5. Compute the current ratio for the current year

current ratio = current assets / current liabilities = $134,500 / $100,000 = 1.345

     

Download pdf
8 0
3 years ago
High Country Corporation acquired two inventory items at a lump-sum cost of $80,000. The acquisition included 6,000 units of pro
SCORPION-xisa [38]

Answer:

$9,000

Explanation:

Calculation for the amount of gross profit that should be recognize

First step is to calculate the

A's sale value = 6,000 unit*12 per unit

A's sale value = $72,000

Second Step is to calculate B's sale value

B's sale value = 14,000 units*4 per unit

B's sale value= $56,000

Third step is to calculate the Total sale value

Total sale value = $72,000 + $56,000

Total sale value= $128,000

Fourth Step is to calculate the Cost of goods sold of A for 6,000 units and 2,000 units

Cost of goods sold of A for 6,000 units = ($72,000/$128,000) * $80,000

Cost of goods sold of A for 6,000 units = 0.5625*$80,000

Cost of goods sold of A for 6,000 units= $45,000

Cost of goods sold of A for 2,000 units = $45,000*2,000/6,000

Cost of goods sold of A for 2,000 units = $15,000

Last step is to calculate the Gross profit of A for 2,000 units

Gross profit of A for 2,000 units = (2,000*12 per units) - 15,000

Gross profit of A for 2,000 units = $24,000 - $15,000

Gross profit of A for 2,000 units = $9,000

Therefore the amount of gross profit that should be recognize will be $9,000

7 0
3 years ago
When does a corporation record an increase in Dividends Payable?
Gnoma [55]

Answer:

B. On the declaration date

Explanation:

Dividend payable are usually advised by management but must be ratified by the shareholders (usually in the annual general meeting) for such to be come recognizable in the books. The date of ratification is the declaration date

As such a corporation record an increase in Dividends Payable on the declaration date.

The right option is B. On the declaration date

4 0
3 years ago
Income Statement (in Millions of Dollars) Net sales $100.0 Cost of sales 60.0 Selling, general, and administrative expenses 20.0
frez [133]

Answer:

the balance sheet is missing:

Balance Sheet  (In millions of Dollars)

ASSETS

Cash                                     $6.0

Accounts Receivable              14.0

Average Inventory                   12.0

Fixed Assets, net                  40.0

TOTAL ASSETS                 $72.0

LIABILITIES AND EQUITY

Accounts Payable                $10.0

Salaries and Benefits Payable   2.0

Other current Liabilities            10.0

Long-term debt                         12.0

Equity                                     38.0

TOTAL LIABILITIES AND EQUITY                     $72.0

a. Determine the length of the inventory conversion period.

  • inventory conversion period = average inventory / (COGS/365) = 73 days

b. Determine the length of the receivables conversion period.

  • receivables conversion period = accounts receivables / (net sales/365) = 51.1 days

c. Determine the length of the operating cycle.

  • length of operating cycle = 73 + 51.1 = 124.1 days

d. Determine the length of the payables deferral period.

  • length of the payables deferral period = accounts payables / (COGS/365) = 60.83 days

e. Determine the length of the cash conversion cycle.

  • cash conversion cycle = 73 + 51.1 - 60.83 = 63.27 days

f. What is the meaning of the number you calculated in Part e?

  • How long does it take to turn inventories into cash, it is a measure of asset liquidity.
8 0
3 years ago
A homeowner has a mortgage balance of $149,570.75. If the interest rate on the loan is 9.5% and the monthly payment is $1,303.55
nalin [4]

Answer:

Principal balance at the end of year 2 = 149,330.9079

Explanation:

Loan Amortization: A loan repayment method structured such that a series of equal periodic installments will be paid for certain number of periods to offset both the loan principal amount and the accrued interest.

We will use the following relationships:

Interest paid = Interest rate × loan balance

Principal paid = Monthly installment - Interest paid

Principal balance= loan balance - principal paid

Year 1

Interest paid    =    9.5%/12 × 149,570.75 =   1,184.101          

Principal paid in year 1 = 1,303.55 -  1,184.101  = 119.448

Principal balance =  149,570.75 - 119.448= 149,451.3018

Year 2

Interest paid = interest rate × loan balance in year 1 = 1183.156

Interest paid = 9.5%/12 × 149,451.3018 = 1183.156

Principal paid = 1,303.55 - 1183.156139  = 120.393

Principal balance at the end of year 2= Principal balance in year 1 - Principal paid in  year 2

= 149,451.3018  - 120.393861  = 149330.9079

Principal balance at the end of year 2 = 149,330.90

8 0
3 years ago
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