Answer:
a. Debit Accounts receivable for $600
Explanation:
As Greasy catering company provided services but had not got the bill from the customer, it increases an asset. According to the revenue recognition principle, revenue has recognized whenever it is provided not when the cash is received. In that case, the journal entry to record the transaction is -
Accounts receivable (Debit) $600
Revenue (Catering) (Credit) $600
Accounts receivable is debit because the company owes the amount from the customers.
Answer:
a. Recording of transactions:
May 7, Accounts Receivable (Dr.) $900
Sales Revenue (Cr.) $900
May 15, Customer service Expense (Dr.) $360
Sales Allowance (Cr.) $360
May 20, Cash (Dr.) $495
Cash Discount (Dr.) $45
Sales Allowance (Dr.) $360
Accounts receivable (Cr.) $900
Explanation:
b. Net Sales :
Total Quote ($180 * 5 ) = $900
Less : Cash Discount 5% = 45
Less : Sales Allowance 40% = 360
Net Sales = $495
c. Outdoor expo will record sales after deducting the cash discount. This discount is availed by customer as repayment is made within 15 days. The sales allowance is subtracted from the gross sales as the compensation is made from the outdoor expo due to mistake from their guide on tour. The net sales reported in Income statement will be $495.
Given the table showing <span>next year's expected costs
and activities below:
![\begin{tabular} {|C||C|C|} & Mixing & Baking\\[1ex] Direct labor hours&411,000 DLH&91,000 DLH\\ Maching hours&811,000 MH&811,000 MH\\[1ex] Overhead costs&\$534,300&\$411,000 \end{tabular}](https://tex.z-dn.net/?f=%5Cbegin%7Btabular%7D%0A%7B%7CC%7C%7CC%7CC%7C%7D%0A%20%26%20Mixing%20%26%20Baking%5C%5C%5B1ex%5D%0ADirect%20labor%20hours%26411%2C000%20DLH%2691%2C000%20DLH%5C%5C%0AMaching%20hours%26811%2C000%20MH%26811%2C000%20MH%5C%5C%5B1ex%5D%0AOverhead%20costs%26%5C%24534%2C300%26%5C%24411%2C000%0A%5Cend%7Btabular%7D)
Pard A:
</span><span>Aztec's departmental
overhead rate for the mixing department based on direct labor
hours is given by the mixing department's overhead cost divided by the mixing department's direct labor hours.
Thus, </span><span>departmental
overhead rate for the mixing department based on direct labor
hours is given by:

Part B:
</span>Aztec's departmental
overhead rate for the baking department based on direct labor
hours <span>is given by the baking department's overhead cost divided by the baking department's direct labor hours.
</span><span>Thus, <span>departmental
overhead rate for the baking department based on direct labor
hours is given by:

Part 3:
</span></span>Aztec's departmental
overhead rate for the baking department based on machine
hours <span>is given by the baking department's overhead cost divided by the baking department's machine hours.
</span><span>Thus, <span>departmental
overhead rate for the baking department based on machine
hours is given by:

</span></span>