Answer:
Betty Incorporated
Journal Entries:
June 3:
DR Inventory $7,100
CR Accounts Payable (North Inc.) $7,100
To record the purchase of goods on account with terms 2/10, n/30.
June 5:
DR Accounts Payable (North Inc.) $2,600
CR Inventory $2,600
To record the return of goods on account.
June 6:
DR Inventory $2,500
CR Accounts Payable (South Corp.) $2,500
To record the purchase of goods on account with terms 2/10, n/30.
June 11:
DR Accounts Payable (North Inc.) $4,500
CR Cash Account $4,410
CR Cash Discount $90
To record the payment of balance owed to North Inc.
June 22:
DR Accounts Payable (South Corp.) $2,500
CR Cash Account $2,500
To record the payment of balance owed to South Corp.
Explanation:
The trade terms 2/10, n/30 mean that both North Inc. and South Corp. offered 2% cash discounts on amount paid by Betty Incorporated if it could settle its bills within 10 days. The net allowed credit days are 30 days, after which Betty Incorporated could be charged interest for late payment. It did not utilize the discount offered by South Corp. as it paid its bills after 16 days instead of within 10 days as stated in the trade terms.
Answer:
$373,200
Explanation:
Product cost is derived through the compilation and addition of the cost of direct labor , direct materials and factory overhead involved in the production of an item
Direct cost
Lumber - 80,600
Assembly line - 100,100
Roof - 15,500
Freight raw materials - 3,700
Total - 199900
Factory overhead
Maintenance workers - 60300
Insurance for factory - 21,100
Utilities in factory - 12,300
Factory Supervisor - 60,900
Depreciation of factory machine - 18,000
Lubricant in factory equipment - 700
Total -173,300
Total product cost - 373200
Answer:
a. 324%
b. 16.61%
Explanation:
a. The computation of the APR is the annual rate of interest which is shown below:
= Interest per month × number of months in a year
= 27% × 12 months
= 324%
b. And, the effective annual rate would be
= (1 + interest rate per month) ^ Number of months in a year - 1
= (1 + 27%) ^ 12 -1
= 1.27 ^ 12 -1
= 17.6053 - 1
= 16.61%
Answer:
a. Identify a cost driver associated with each activity.
Explanation:
While setting up the new activity based costing system he presently completed the identification of the activities and the cost of overhead is associated with each kind of activity
Now the next step in the activity based costing is to have a identification of the cost driver that associated with each kind of activity
Here cost driver means number of machine hours, number of machine setups, etc
Therefore the first option is correct
