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2 years ago

The following transactions apply to Jova Company for Year 1, the first year of operation:

Business

1 answer:

aleksandr82 [10.1K]2 years ago

3 0

Answer:

Year 1:

a. Issued $17,000 of common stock for cash. ⇒ ASSET SOURCE

Dr Cash 17,000

Cr Common stock 17,000

b. Recognized $63,000 of service revenue earned on account. ⇒ ASSET SOURCE

Dr Accounts receivable 63,000

Cr Service revenue 63,000

c. Collected $56,400 from accounts receivable. ⇒ ASSET EXCHANGE

Dr Cash 56,400

Cr Accounts receivable 56,400

d. Paid operating expenses of $36,600. ⇒ ASSET USE

Dr Operating expense 36,600

Cr Cash 36,600

e. Adjusted accounts to recognize uncollectible accounts expense. Jova uses the allowance method of accounting for uncollectible accounts and estimates that uncollectible accounts expense will be 2 percent of sales on account. ⇒ ASSET USE

Dr Bad debt expense 132

Cr Allowance for doubtful accounts 132

Year 2:

a. Recognized $70,500 of service revenue on account. ⇒ ASSET SOURCE

Dr Accounts receivable 70,500

Cr Service revenue 70,500

b. Collected $64,400 from accounts receivable. ⇒ ASSET EXCHANGE

Dr Cash 64,400

Cr Accounts receivable 64,400

c. Determined that $860 of the accounts receivable were uncollectible and wrote them off. ⇒ ASSET EXCHANGE

Dr Bad debt expense 860

Cr Accounts receivable 860

d. Collected $300 of an account that had previously been written off. ⇒ ASSET EXCHANGE

Dr Accounts receivable 300

Cr Bad debt expense 300

Dr Cash 300

Cr Accounts receivable 300

e. Paid $48,100 cash for operating expenses. ⇒ ASSET USE

Dr Operating expense 48,100

Cr Cash 48,100

f. Adjusted the accounts to recognize uncollectible accounts expense for Year 2. Jova estimates uncollectible accounts expense will be 1 percent of sales on account. ⇒ ASSET USE

Dr Bad debt expense 117

Cr Allowance for doubtful accounts 117

trial balance year 1

Dr Cash 36,800

Dr Accounts receivable 6,468

Cr Common stock 17,000

Cr Service revenue 63,000

Dr Operating expense 36,600

Dr Bad debt expense 132

Income Statement

Year 1

Service revenue $63,000

Expenses:

Operating expense $36,600
Bad debt expense $132 ($36,732)

Net income $26,268

Balance Sheet

Year 1

Assets:

Cash $36,800

Accounts receivable $6,468

Total Assets $43,268

Equity:

Cr Common stock 17,000

Retained earnings $26,268

Total equity $43,268

Statement of changes in stockholders' equity

Year 1

Beginning balance $0

Common stock issued $17,000

Net income $26,268

Ending balance $43,268

trial balance year 2

Dr Cash 16,600

Dr Accounts receivable 5,123

Cr Service revenue 70,500

Dr Operating expense 48,100

Dr Bad debt expense 677

Income Statement

Year 2

Service revenue $70,500

Expenses:

Operating expense $48,100
Bad debt expense $677 ($48,777)

Net income $21,723

Statement of changes in stockholders' equity

Beginning balance:

Common stock issued $17,000

Retained earnings $26,268

Net income $21,723

Ending balance $64,991

Balance Sheet

Year 2

Assets:

Cash $53,400

Accounts receivable $11,591

Total Assets $64,991

Equity:

Cr Common stock 17,000

Retained earnings $47,991

Total equity $64,991

Statement of cash flows

Year 2

Net income $21,723

Adjustments to net income:

Increase in accounts receivable ($5,123)

Net cash from operating activities $16,600

Net cash increase $16,600

Beginning cash balance $36,800

Ending cash balance $53,400

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the loss of producer surplus associated with some sellers dropping out of the market as a result of the tax is

san4es73 [151]

Answer:

$60

Explanation:

According to information on your question. We are to note that an absence or reduction of suppliers could lead to lower supply.

As in this case, the producer supply loss of $60 was incurred as some sellers dropped out of the market as a result of the tax.

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3 years ago

Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the followin

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Answer:

1. a. A company records a loss of $70,000 on the sale of its outdated inventory. OPERATING ACTIVITY.

Operating activities have to do with the day to day operations of the business.

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Investing activities have to do with the purchase and sale of capital assets such as financial assets in other companies or fixed assets. The machinery purchased here is a fixed asset so this will count as an investing activity.

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Financing activities have to do with the long term debt and equity of a company and this includes dividends so this falls under her.

2. Cashflow due to financing activities:

Cash Balance second year = Cash Balance first year + Cash Flows From Operating Activities + Cash Flows From Investing Activities + Cash Flows From Financing Activities

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2 years ago

Monique lends Taylor $1,200 on March 15, 2009. Taylor is expected to return $1,260 on March 14, 2010. Monique expects inflation

Irina-Kira [14]

Answer:

2.94%

Explanation:

Real Rate of Return is the actual rate of return that an investor gets from investment excluding any inflation effect.

Present Value = PV = $1,200

Future Value = FV = $1,260

Numbers of period = n = 1 year

Use Following Formula to calculate the nominal Interest rate

FV = PV x ( 1 + r )^n

$1,260 = $1,200 x ( 1 + r )

$1,260 / $1,200 = 1+r

1.05 = 1 + r

r = 1.05 - 1 = 0.05 = 5%

As the 5% is the Nominal Interest rate

we Will Use the Fisher Effect formula to calculate the real Interest rate

1 + Nominal Interest Rate = ( 1 + Real Interest Rate ) x ( 1 + Inflation Rate )

1 + 5% = ( 1 + Real Interest Rate ) x ( 1 + 2% )

1 + 0.05 = ( 1 + Real Interest Rate ) x ( 1 + 0.02 )

1.05 = ( 1 + Real Interest Rate ) x 1.02

1 + Real Interest Rate = 1.05 / 1.02

1 + Real Interest Rate = 1.0294

Real Interest Rate = 1.0294 - 1

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3 years ago

Read 2 more answers

Pier is trying to determine which leadership style to use in making a decision that may have a major impact on his company. He’s

oksian1 [2.3K]

Answer:

The answer is: Normative leadership model

Explanation:

The normative leadership model requires Pier to analyze the following seven situations:

How will my decision will affect the organization?
Is it important that team members are committed to the decision making process.?
As a leader, do I possess the knowledge to solve try to solve this issue?
If only I are responsible for making the decision, will the rest of the team be committed to it?
My team members support me and the organization?
The team members possess the knowledge to try to solve this issue?
Can team members unite and really work as a team to solve this issue?

Depending on what Pier believes the correct answers are for the above questions, he can decide to use one of the following decision making processes:

Decide: Pier makes the decision by himself with little or no participation of the team members.
Consult (Individually): Pier consults the team members individually, deciding what information to use, and then makes a decision by himself.
Consult (Group): Pier organizes a group meeting where all members express their opinions, then decides what information is useful and makes the decision by himself.
Facilitate: Pier organizes a group meeting and presents his opinion and every group member participates. The decision is made by group consensus.
Delegate: Pier leaves the decision making process entirely to the group members and doesn't participate in it.

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3 years ago

Jean's Fitness Club provides monthly memberships as well as personal training sessions. The personal trainers earn 50% of the re

kiruha [24]

Answer:

c. $175,500

Explanation:

Revenue $140,000

Training revenue $75,000

Product Sales $65,000

Total Revenue $280,000

Variable Expenses

Personal trainer wages expense $70,000

Cost of Product sold $35,000

Total Variable Cost ($105,000)

Contribution margin / operating income $175,000

Fixed Costs

Space rental expense $11,000

Depreciation expense $6,000

Rental insurance expense $3,000

Front desk staff wages expense $12,000

Total Fixed cost ($32,000)

Net Income $143,000

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3 years ago