Answer:
(A) pay within the discount period and recognize a savings.
Explanation:
The given credit terms of 2/10, n/30 means
If the payment is paid within 10 days so 2% discount is given and the total credit period given is 30 days
Suppose we take an example
A buys the merchandise of goods from B for $10,000 on April 1. The payment is doe by A on April 7
So, the net payment is
= $10,000 - $10,000 × 2%
= $10,000 - $200
= $9,800
The $200 shows the discount which A avails and termed as a savings
Answer:
Debit Credit
Aug 4 Cleaning Supplies 79
Accounts payable 79
(Innovation Supplies)
Aug 19 Office Equipment 4900
Accounts Payable 4900
(Office Warehouse)
Aug 23 Cleaning Supplies 209
Accounts Payable 209
( Rubble Supplies)
Explanation:
Answer:
Darby Company
The amount of interest payable at December 31, Year 1 is:
$76.67
Explanation:
a) Data and Calculations:
Cash Revenue = $1,300
Bank Note Payable = $2,300
Interest rate on Bank Note = 10%
Issue date of bank note = September 1, Year 1
Term of bank note = 1 year
Amount of interest payable on December 31, Year 1:
= $2,300 * 10% * 4/12 = $76.67
b) The amount of interest payable on the loan totals $230 ($2,300 * 10%). However for Year 1, the interest payable is reduced to 4 months (September 1 to December 31, Year 1), amounting to $76.67. This implies that the remaining interest ($153.33) will be payable in the period between January 1 and August 31 in Year 2. In accordance with the accrual and matching principles of generally accepted accounting principles, interest expense must be accrued to the period when the expense is incurred and matched to the revenue it has generated.
<span>Through specialization, both producers and consumers benefit. On the producer side, specialization allows producers to best use their resources in the most efficient manner possible by playing to their strengths, thus maximizing profit. On the consumer side, the fact that producers are specialized and thus efficient in their production ensures lower production costs than if products were made by less-specialized producers, translating into lower consumer-facing prices.</span>
