Answer:
The required journals to be recorded are as follows:
On January 10:
Debit Accounts receivable $20,900
Credit Sales revenue (credit) $20,900
<em>(To recognize account receivables on merchandise sale)</em>
On February 9:
Debit Notes receivable $20,900
Credit Accounts receivable $20,900
<em>(To reclassify accounts receivable to notes receivable)</em>
On March 9:
Debit Interest receivable $174.17
Credit Interest revenue $174.17
<em>(To record interest on notes receivables [</em>$20,900 x 10%/12]<em>)</em>
Explanation:
- First, on January 10, when Metlock Inc. sold merchandise on account to Monty Co., Metlock has to recognize an accounts receivable because the sales transaction was on account.
- However, since Monty gave a 10% promissory note, Metlock has to record the same by reclassifying the initially recognized accounts receivable to notes receivable, since that is what the company is expecting.
- The 10% on the promissory notes means Metlock would be recognizing the amount in its interest revenue.
Answer:
The present value of the promised gift will:
be less than $5,000.
Explanation:
The present value of $5,000 to be received in three years' time from today is less than $5,000 received. This is explained by the time value of money concept. If the $5,000 gift is discounted to today's value, using a discount factor of 0.751 (10% in three years' time), it would be $3,755 ($5,000 * 0.751). This means that $5,000 received in year 3 is less than $5,000 received today.
Answer:
<u>No</u>
Explanation:
<em>Remember, </em>in business law, as long as both parties did not sign a contractual document, the purchase is not legal.
In this case, it could be observed that Ganze only "mailed an acceptance" not a signed document between both parties agreeing on the purchase of her antique car.
Also, the fact that she quickly sent a telegram letting Archer know that she is rejecting the offer, shows that she acted in good fate to withdraw her acceptance on time.
Answer:
b. the market price is below equilibrium
Explanation:
Markets are at Equilibrium, where market demand = market supply. Market Demand is downward sloping due to price - demand inverse relationship as per law of demand. And, Market Supply is upward sloping due to price - supply direct relationship as per law of supply
When Price is below Equilibrium price : Market demand is more, as it is inversely related with price. And, Market supply is less, as it is directly related with price. So Market Supply is more than Market Supply. This implies Scarcity (Market Shortage), when supply is insufficient to fulfil demand.
This excess demand (or shortage/ scarcity) creates competition among buyers & pushes up the market price.This way; finally, the market price & market quantity resume back to equilibrium level.
