Answer:
Ensemble Co.
UNADJUSTED TRIAL BALANCE
ACCOUNT TITLE DEBIT CREDIT
1 Cash 42,900
2 Accounts Receivable 123,500
3 Prepaid insurance 27,000
4 Equipment 300,000
5 Accounts Payable 52,000
6 Salaries Payable 4,800
7 Common Stock 40,000
8 Retained Earnings 137,200
9 Dividends 5,000
10 Service Revenue 1,216,000
11 Salary Expense 660,000
12 Advertising Expense 275,000
13 Miscellaneous Expense 16,600
14 Totals 1,466,600 1,466,600
Explanation:
A Trial Balance is used to check for mathematical accuracy. It is a list of Debits and Credit prepared from Ledger Account.
The optimal risky portfolio can be identified by finding ____________. I. the minimum variance point on the efficient frontier II. the maximum return point on the efficient frontier the minimum variance point on the efficient frontier III. the tangency point of the capital market line and the efficient frontier IV. the line with the steepest slope that connects the risk free rate to the efficient frontier A. I and II only B. II and III only C. I and IV only D. III and IV only
Answer:
D. III and IV only.
Explanation:
Portfolio variance can be defined as the measurement of risk or dispersion of returns of a set of securities that makes up a portfolio fluctuate over a period of time.
Simply stated, portfolio variance is typically the total returns of the portfolio over a specific period of time.
In order to calculate the portfolio variance, the standard deviations of each security in the portfolio with their respective correlations security pair in the portfolio would be used. Portfolio variance is the square of standard deviation.
A two-asset portfolio with a standard deviation of zero can be formed when the assets have a correlation coefficient equal to negative one (-1) because this defines the efficiency frontier. In Economical portfolio theory, the efficient frontier is a group of optimal portfolios that offers an investor the highest expected return for a specific risk level or offers the lowest risk for a defined level of expected return.
A common risk can be defined as a type of risk that affects the entirety of a business firm or company and as such can't be diversified.
Generally, the optimal risky portfolio can be identified by finding the tangency point of the capital market line and the efficient frontier and the line with the steepest slope that connects the risk free rate to the efficient frontier.
One example of a job benefit is:
a) Salary
b) Uniforms and supplies
c) Health insurance
d) Flexible hours
Answer:
c
explanation:
Answer:
it would be C) health insurance.
The XYZ Casualty Insurance Company has found that for a particular type of insurance policy it makes the following payments for insurance claims: i) On 10% of the policies, XYZ Company pays $1,000 exactly one year after the effective date of the policy. ii) On 3% of the policies, XYZ Company pays $10,000 exactly three years after the effective date of the policy. iii) On the remaining policies, XYZ Company makes no payment for claims. In addition to the above payments, XYZ Company pays $20 for the expenses of administering the policy: $10 is paid on the effective date of the policy and the remaining $10 is paid six months after the effective date of the policy. The annual interest rate is 8%, compounded semiannually. The premium for this type of insurance policy is due six months after the effective date of the policy. If the present value of the premium is set equal to the present value of the claim payments and expenses, what is the premium?
(A) Less than $355
(B) At least $355 but less than $380
(C) At least $380 but less than $415
(D) At least $415 but less than $440
(E) At least $440
Answer:
(B) At least $355 but less than $380
Explanation:
i. Claim payments to be made
$1000 to be paid after one year of the policy
So, Present value of $1000 at 8% semi-annually = $1000/(1.04^2)) = $924.56
10% of this policy is paid = $924.56*10%= $92.46
ii. Claim payments to be made
$10000 after 3 years
So, present value= $10000/(1+0.08/2)^6 =$10000/1.046 = $7,903.14
3% of this policy claim are payable after 3 years= $7903.14* 3% = $237.09
iii. Administration expenses = $20
$10 on the effective date
$10 after 6 months
So, present value of $10 after 6 months= $10/(1.04)= $9.62
Total present value of expenses to be made by the company = $92.46 + $237.09 + $10 + $9.62 = $349.17
As the present value of the premium is set equal to the present value of the claim payments and expenses. Then, the present value of the premium is equals to $349.17.
The actual cost of the premium paid in 6 months = $349.17*1.04 = $363.14. So the option B is correct.
Sales of Granite City Products Inc. have been on a steady decline for the last 12 months. A market research study conducted revealed that the product of Granite City Products Inc. can be sold only for $480 as opposed to the current market price charged of $580 per unit. Granite City Products Inc. has decided to revise its sales price to $480. The annual sales target volume of the product after price revision is 280 units. Granite City Products Inc. wants to earn 30% on its sales amount. What is the target cost per unit
Answer:
$336.00
Explanation:
Calculation for the target cost per unit
First step is to calculate the The target sales revenues
The target sales revenues =($480 × 280)
The target sales revenues = $134,400
Second step is to calculate the The target operating income
The target operating income=($134,400 × 30%)
The target operating income = $40,320
Third step is to calculate the The target cost
The target cost=($134,400 –$40,320)
The target cost = $94,080
Now let calculate the The target cost per unit
The target cost per unit = $94,080 / 280
The target cost per unit= $336.00
Therefore The target cost per unit is $336.00
A company establishes a $2,050 petty cash fund on May 2. On May 30, the fund shows $868 in cash along with receipts for the following expenditures: transportation-in, $160; postage expenses, $589; and miscellaneous expenses, $440. The petty cashier could not account for a $7 overage in the fund. The company uses the perpetual system in accounting for merchandise inventory. Prepare the (1) May 2 entry to establish the fund, (2) May 30 entry to reimburse the fund [Hint: Credit Cash Over and Short for $7 and credit Cash for $1,182], and (3) June 1 entry to increase the fund to $2,400.
Answer:
Explanation:
Petty cash $2,050
Cash $2,050
Merchandise inventory $160
Postage Expense $589
Misc. expenses $440
Credit:
Cash over and short $7
Cash
Petty Cash $350
Cash $350
(2400-2050)
define leverage economics.
Answer:
Leverage economics
is an investment strategy of using borrowed money—specifically, the use of various financial instruments or borrowed capital—to increase the potential return of an investment.
This magazine is not useful for/to me as I have ni taste in music debates. To or for?
Answer:
For
Explanation:
Use “to” when the reason or purpose is a verb. Use “for” when the reason or purpose is a noun.
Hope this helps! <3
ose purchased a vehicle for business and personal use. In 2020, he used the vehicle 10,500 miles (80% of total) for business and calculated his vehicle expenses using the standard mileage rate (mileage was incurred ratably throughout the year). He paid $850 in interest and $85 in property taxes on the car. Required: Calculate the total business deduction related to the car. (Round your final answers to nearest whole dollar amount.)
Answer:
$6,366
Explanation:
Calculation for the total business deduction related to the car:
Total business deduction=($10,500x .535) + $850(.80) + $85(.80)
Total business deduction=$5,618+$680+$68
Total business deduction=$6,366
Therefore the total business deduction related to the car is $6,366
A lottery has a grand prize of $320,000, four runner-up prizes of $32,000 each, twelve third-place prizes of $8000 each, and twenty-five consolation prizes of $800 each. If 1,600,000 tickets are sold for $1 each and the probability of any one ticket winning is the same as that of any other ticket winning, find the expected return on a $1 ticket. (Round your answer to two decimal places.)
Answer: -$0.65
Explanation:
Probability of winning the $320,000 = 1 / 1,600,000
Probability of winning the $32,000 = 4 / 1,600,000
Probability of winning the $8,000 = 12 / 1,600,000
Probability of winning the $800 = 25 / 1,600,000
Probability of losing your $1 = (1,600,000 - 25 - 12 - 4 - 1) / 1,600,000 = 1,599,958 / 1,600,000
Expected return = (1 * 320,000/1,600,000) + (4 * 32,000/1,600,000) + (12 * 8,000/1,600,000) + (25 * 800/ 1,600,000) - (1,599,958 * 1 / 1,600,000)
= -0.64747375
= -$0.65
The market for bell peppers is perfectly competitive and currently has an equilibrium price of $3 and the number of bell pappers traded is 6. Suppose the government imposes a price floor of $1 on this market. What will be the size of the shortage in this market
Well, the price would increase by 1 dollar, so the shortage would be 2 less.
There should be no shortage.
What is a price floor?
It is the minimum price where the producer should charge also at the same time it should be binding and considered effective. In the case when the price floor should be above the equilibrium price so it should be the surplus while on the other hand if the price floor is below the equilibrium price so that means it is no surplus. Also, the shortage is not possible
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What is the average student contribution for one year at a private college in 2012-2013?
Answer:
Explanation:
Step-by-step explanation: The average cost to attend a four-year private college for one year in 2012-2013 would be $43,289. Adding all of the average costs for one year of education gives us the total average cost for one year of education.
Answer:$27,609
Explanation:
Answer 5 questions from any subject in 48 hours to collect 50
Answer:
im so confused
Explanation:
Answer:
aaaaaaaaaaaaaaaaaaaaaaaaahi bye
Explanation:
Indirect: Computing cash from operations LO P2
MOSS COMPANY Selected Balance Sheet Information December 31, 2019 and 2018 2019 2018 Current assets Cash $ 89,650 $ 31,800 Accounts receivable 30,000 42,000 Inventory 65,000 55,100 Current liabilities Accounts payable 40,400 30,700 Income taxes payable 2,550 3,200 MOSS COMPANY Income Statement For Year Ended December 31, 2019 Sales $ 534,000 Cost of goods sold 351,600 Gross profit 182,400 Operating expenses Depreciation expense $ 46,000 Other expenses 127,000 173,000 Income before taxes 9,400 Income taxes expense 5,900 Net income $ 3,500 Use the information above to calculate cash flows from operating activities using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
Answer: $60,650
Explanation:
Operating cashflows by indirect method:
Net Income $3,500
Add:
Depreciation $46,000
Decrease in Accounts Receivable $12,000
Increase in Accounts Payable $ 9,700 $67,700
Less:
Increase in inventory ($9,900)
Decrease in Tax payable ($650) ($10,550)
Total $60,650
Decrease in accounts receivable = 42,000 - 30,000 = $12,000
Increase in Acc. Payable = 40,400 - 30,700 = $9,700
Increase in inventory = 65,000 - 55,100 = $9,900
Decrease in Tax payable = 3,200 - 2,550 = $650
Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 10,600 65% Conversion costs $ 12,800 30% A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Materials costs $ 142,100 Conversion costs $ 359,500 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The cost per equivalent unit for conversion costs for the first department for the month is closest to:
Answer:
$46.04
Explanation:
It is important to note that Gunes Corporation uses the weighted-average method. This means we are only interested in the Equivalent units completed and transferred and units in working process.
Total Conversion Cost
Consider the cost in opening work in process and cost during the year.
Total Conversion Cost = $12,300 + $359,000 = $371,300
Equivalent Units
Consider work completed in units completed and transferred and units in working process.
Equivalent Units = 7,400 x 100% + 1,900 x 35 % = 8,065 units
The units in working process have been calculated as :
Units in working process = 800 + 8500 - 7,400 = 1,900
Cost per Equivalent Units
Cost per Equivalent Unit = Total Cost ÷ Total Equivalent Units
= $371,300 ÷ 8,065 units
= $46.04
The cost per equivalent unit for conversion costs for the first department for the month is closest to $46.04
Answer:
$46.16
Explanation:
It is important to note that Gunes Corporation uses the weighted-average method. This means we are only interested in the Equivalent units completed and transferred and units in working process.
Total Conversion Cost
Consider the cost in opening work in process and cost during the year.
Total Conversion Cost = $12,800 + $359,500 = $372,300
Equivalent Units
Consider work completed in units completed and transferred and units in working process.
Equivalent Units = 7,400 x 100% + 1,900 x 35 % = 8,065 units
The units in working process have been calculated as :
Units in working process = 800 + 8500 - 7,400 = 1,900
Cost per Equivalent Units
Cost per Equivalent Unit = Total Cost ÷ Total Equivalent Units
= $372,300 ÷ 8,065 units
= $46.16
The staff training center at a large regional hospital provides training sessions in CPR to all employees. Assume that the capacity of this training system was designed to be 1200 employees per year. Since the training center was first put into use, the program has become more complex, so that 950 now represents the most employees that can be trained per year. In the past year, 850 employees were trained. The efficiency of this system is approximately ________________ and its utilization is approximately _____________________.
Answer:
Efficiency of the system = Actual output/ Effective capacity*100
Efficiency of the system = 850/950*100
Efficiency of the system = 0.894737*100
Efficiency of the system = 89.47%
Utilization of the system = Actual output/Design capacity*100
Utilization of the system = 850/1200*100
Utilization of the system = 0.708333*100
Utilization of the system = 70.83%
Interwest receives government funding and that funding is tied to the accuracy of the reports put out by its information system. The CFO, Singh, is concerned about whether the employees are properly incentivized to input the data accurately. So she enlists the help of the CEO, Manzoni, to plan a retreat in which she highlighted the importance of proper data entry to the 10 hospital administrators that are in charge of running the hospitals. Six months later the data accuracy problems are as bad as they ever were. Manzoni needs help, what do you recommend? 1. What are the potential sources of the problems? 2. What information would you want to analyze? 3. What actions might you recommend to increase the accuracy of data entry? 4. How does your view of behavior affect how you might address this consulting assignment?
Answer:
1. Data entry officers might be having trouble putting data in the system
2. Analyze the environment where data entry officers are seated to observe the amount of distraction or any other factors for example light glare.
3. Arrange the seat of the data entry officer at a place where there are no distractions and the data is visible enough to be entered in the system.
4. An autocratic manager would remove the data entry officer instead of finding out the ground reason for the inaccuracy of data entered.
Explanation:
1. Data entry officers might be having trouble putting data in the system
2. Analyze the environment where data entry officers are seated to observe the amount of distraction or any other factors for example light glare.
3. Arrange the seat of the data entry officer at a place where there are no distractions and the data is visible enough to be entered in the system.
4. An autocratic manager would remove the data entry officer instead of finding out the ground reason for the inaccuracy of data entered.
Kendall Company has sales of 1,000 units at $60 a unit. Variable expenses are 30% of the selling price. If total fixed expenses are $30,000. The degree of operating leverage is
Answer:
There are several ways to compute the degree of operating leverage (DOL). A fairly intuitive approach is expressed below.
DOL = (sales - variable costs) / (sales - variable costs - fixed costs)
For Kendall, the DOL is computed as follows:
DOL = (1,000 * $60 - 1,000 * $60 * .30) / (1,000 * $60 - 1,000 * $60 * .30 - $30,000) = 3.5
hope this helps
Lyman Company has the opportunity to increase annual credit sales $100,000 by selling to a new, riskier group of customers. The expenses of collecting credit sales are expected to be 15 percent of credit sales. The company's manufacturing and selling expenses are projected at 70% of sales, and its effective tax rate is 40%. If Lyman accepts this opportunity, its after-tax profits would increase by an estimated:_____.
a. $10,200.
b. $10,000.
c. $9,000.
d. $14,400.
Answer:
Option c ($9,000) is the correct answer.
Explanation:
The given values are:
Annual increase in sales,
= $100,000
Now,
The collection expenses will be:
= [tex]100,000\times 15 \ percent[/tex]
= [tex]15,000[/tex]
Selling as well as manufacturing expenses will be:
= [tex]100,000\times 70 \ percent[/tex]
= [tex]70,000[/tex]
Tax expense will be:
= [tex]15,000\times 40 \ percent[/tex]
= [tex]6,000[/tex]
After-tax profits increase will be:
= [tex]15,000-6,000[/tex]
= [tex]9,000[/tex] ($)
bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 5,600 direct labor-hours will be required in August. The variable overhead rate is $5.40 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $69,440 per month, which includes depreciation of $15,680. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be:
Answer:
$84,000
Explanation:
The computation of August cash disbursement for manufacturing overhead is seen below;
Direct labor hour
5,600
Variable overhead per hour
$5.4
Variable manufacturing overhead
$30,240
Fixed manufacturing overhead
$69,440
Total manufacturing overhead
$99,680
Less: Depreciation
$15,680
Cash disbursement for manufacturing overhead
$84,000
Uva Systems Inc. has a limited amount of direct material available for products 1A1 and 2B2. Each unit of 1A1 has a contribution margin of $12 and each unit of 2B2 has a contribution margin of $30. A unit of 2B2 uses three times as much direct material as a unit of 1A1. What is Uva's most profitable sales mix, assuming there is unlimited demand for either product
Answer:
Make All 1A1
Explanation:
Calculation to determine What is Uva's most profitable sales mix, assuming there is unlimited demand for either product
First step is to calculate the Contribution margin of 1 unit of 2B2
Contribution margin of 1 unit of 2B2 = 1 x $30
Contribution margin of 1 unit of 2B2 = $30
Second step is to calculate the Contribution margin of 3 units of 1A1
Contribution margin of 3 units of 1A1 = 3 x $12
Contribution margin of 3 units of 1A1 = $36
Based on the above calculation for both Contribution margin of 1 unit of 2B2 and Contribution margin of 3 units of 1A1 we can see that Contribution margin of 3 units of 1A1 is the most profitable sales mix.
Therefore Uva's most profitable sales mix, assuming there is unlimited demand for either product is Make All 1A1
Pacheco Inc. issued convertible bonds 10 years ago. Each bond had an initial term of 30 years, had a face value of $1,000, paid a coupon rate of 11%, and was convertible into 20 shares of Pacheco stock, which was selling for $30 per share at the time. Since then the price of Pacheco shares has risen to $65 and the interest rate has dropped to 8%. What is the least that each of the bonds is worth today
Answer:
$1,296.90
Explanation:
Calculation for What is the least that each of the bonds is worth today
First step is to calculate the stock each bond worth
Stock each bond worth=20 shares ×$65
Stock each bond worth= $1,300
Second step is to calculate what the bond is each worth using this formula
PV= PMT[PVFAk,n] + FV[PVFk,n]
Let plug in the formula
PV= $55[PVFA4,40] + $1,000[PVF4,40]
PV= $55(19.7928) + $1,000(.2083)
PV= $1,088.60 + $208.30
PV= $1,296.90
Therefore Based on the above calculation the least that each of the bonds is worth today is $1,296.90
During the harsh winter of 1972-73:__________
A. people in the northeast did not have enough oil to heat their homes, but people elsewhere in the U.S. had enough oil to heat their swimming pools.
B. oil was diverted away from low-value uses (like heating swimming pools) to high-value uses (like heating homes in the northeast).
C. there was not enough oil for heating homes in the northeast or for heating swimming pools elsewhere in the U.S.
D. there was enough oil for heating homes in the northeast and for heating swimming pools elsewhere in the U.S.
Answer: A. people in the northeast did not have enough oil to heat their homes, but people elsewhere in the U.S. had enough oil to heat their swimming pools.
Explanation:
1973 saw the beginning of the energy crises after the Arab world placed an oil embargo on the U.S. As a result, gasoline and oil products became very expensive in the U.S. and had to be appropriately used.
The North-East did not suffer as much during this time New York receiving some of the lowest amounts of snow in modern history so less oil went to the north east for heating as it was ruled not to be cold enough.
Tempest Enterprises began operations on January 1, 20x1, with all of its activities conducted from a single facility. The company's accountant concluded that the year's building depreciation should be allocated as follows: selling activities, 20%; administrative activities, 35%; and manufacturing activities, 45%. If Tempest sold 60% of 20x1 production during that year, what percentage of the depreciation would appear (either directly or indirectly) on the 20x1 income statement?
Answer:
100% will be included in the Income Statement
Explanation:
Always remember that the depreciation calculated for the accounting period can be apportioned as per the International Accounting Standard IAS 2, which says that expenses must be classified in a manner that results in the truth & fairness of the Financial Statements. This means that if depreciation calculated is $500 then the whole of this depreciation will be expensed out in the income statement. It's 20% might go to selling activities, 35% to administrative activities, and 45% to manufacturing activities.
But remember that the depreciation calculated for the accounting period would be expensed out by $500 in the income statement, for the period generated.Twist Corp. has a current accounts receivable balance of $335,500. Credit sales for the year just ended were $4,448,730.
A. What is the company's receivables turnover?
B. What is the company's days' sales in receivables?
C. How long did it take on average for credit customers to pay off their accounts during the past year?
Answer:
a.) 13.26
b.) 27.53 days
c.) 27.53 days
Explanation:
Given - Twist Corp. has a current accounts receivable balance of $335,500.
Credit sales for the year just ended were $4,448,730.
To find - A. What is the company's receivables turnover?
B. What is the company's days' sales in receivables?
C. How long did it take on average for credit customers to pay off
their accounts during the past year?
Proof -
a.)
Formula for Receivables turn over is
Receivables turn over = Net credit sales / Average Accounts receivable
= [tex]\frac{4,448,730}{335,500}[/tex] = 13.26
⇒Company's receivables turnover = 13.26
b.)
Day's sales in receivables = 365 days / Receivable turnovers
= [tex]\frac{365}{13.26}[/tex] = 27.53
⇒Day's sales in receivables = 27.53 days
c.)
On average , it took 27.53 days for credit customers to pay off their accounts during the past year.
Grever is the East Coast manager of Hamilton Software Technolgy. Other managers are in charge of the West Coast, South, and Central divisions. His brother, Elijah is working at a different IT company. Their employees are grouped according to their functional expertise as well as the different vital product lines that they are working on.
(a) Grever most likely works in a company with a ______ structure, while (b) Elijah most likely works in a company with a _____ structure.
Answer:
geographical
functional
Explanation:
Additional information: 1. New plant assets costing $80,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $46,000 and accumulated depreciation of $38,800 were sold for $1,200 cash. 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $20,824 was declared and paid during the year. Further analysis reveals that accounts payable pertain to merchandise creditors. Prepare a statement of cash flows for Waterway Industries using the direct method.
Answer:
Cashflow Statement
Note the direct method is required for this question. This means, we reconcile the Net Income to Operating Profit by adjusting for Non-Cash items included in Income and Changes in Working Capital.
Explanation:
I have attached the full question as an image below.
Carroll Corporation has two products, Q and P. During June, the company's net operating income was $26,000, and the common fixed expenses were $56,000. The contribution margin ratio for Product Q was 40%, its sales were $141,000, and its segment margin was $48,000. If the contribution margin for Product P was $46,000, the segment margin for Product P was:
Answer:
$34,000
Explanation:
Given the above information, the computation of segment margin for product P is shown below;
Net operating profit = (Segment margin Q + Segment margin P) - Common fixed expenses
$26,000 = ($48,000 + Segment margin P) - $56,000
$26,000 = $48,000 + Segment margin P - $56,000
$26,000 = Segment margin P - $8,000
Segment margin P = $26,000 + $8,000
Segment margin P = $34,000
At December 31, 2020 and 2021, Oriole Company had outstanding 4000 shares of $100 par value 6% cumulative preferred stock and 18800 shares of $10 par value common stock. At December 31, 2020, dividends in arrears on the preferred stock were $13000. Cash dividends declared in 2021 totaled $44600. What amounts were payable on each class of stock
Answer:
See below
Explanation:
2020 2021
Allocation to preferred stock
Nil 44,600
Remainder to common stock
Nil 20,000
Cypress Oil Company's December 31, 2021, balance sheet listed $855,000 of notes receivable and $22,500 of interest receivable included in current assets. The following notes make up the notes receivable balance: Note 1 Dated 8/31/2021, principal of $400,000 and interest at 12% due on 2/28/2022. Note 2 Dated 6/30/2021, principal of $260,000 and interest due 3/31/2022. Note 3 $200,000 face value noninterest-bearing note dated 9/30/2021, due 3/31/2022. Note was issued in exchange for merchandise.
The company records adjusting entries only at year-end. There were no other notes receivable outstanding during 2021.
Required:
1. Determine the rate used to discount the noninterest-bearing note.
2. Determine the explicit interest rate on Note 2. (Round your intermediate calculations to the nearest whole dollar amount.)
3. What is the amount of interest revenue that appears in the company’s 2021 income statement related to these notes?
Discount rate
Interest rate
Interest revenue
Answer:
1. Determine the rate used to discount the noninterest-bearing note.
face value of the notes receivable = $400,000 + $260,000 + $200,000 = $860,000
carrying value = $855,000
difference = $860,000 - $855,000 = $5,000
6 month note, so total interest = $10,000
yearly interest = $10,000 x 2 = $20,000
interest rate = $20,000 / $200,000 = 10%
2. Determine the explicit interest rate on Note 2. (Round your intermediate calculations to the nearest whole dollar amount.)
total accrued interest = $22,500
interest on note 1 = $16,000
interest on note 2 = $6,500 (six months worth of interest)
total yearly interest = $13,000
interest rate = $13,000 / $260,000 = 5%
3. What is the amount of interest revenue that appears in the company’s 2021 income statement related to these notes?
total interest = $22,500 + $5,000 = $27,500
Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,125. Fragmental collected the entire $9,000 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be:
Answer:
Debit unearned rent for $3,375
........Credit rent revenue for $3,375
Explanation:
The adjusting entry made by Fragmental Co. on December 31 is calculated as;
Number of months from October 1st to December 31st = 3 months
Rent revenue earned for 3 months = $1,125 × 3 = $3,375
Therefore, the adjusting entry would be;
Debit unearned rent for $3,375
..........Credit rent revenue for $3,375
The adjusting entry made by Fragmental Co. on December 31 would be a debit to Unearned Rent and a credit to Rent Revenue for $3,450. The correct option is d.
$3,450 in unearned rent a/c Dr.
$3,450 in rent revenue.
Unearned rent is deducted because it is the company's liability. The value of unearned rent is reduced due to the company's adjustment of unearned rent into rent income, and a fall in the value of unearned rent is always debited because it is a liability.
Rent revenue is credited since it is a company revenue/gain, and all company revenue/gains are always recognised in the books of accounts.
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The question is incomplete, but the complete question most probably was:
Fragmental Co. leased a portion of its store to another company for eight months beginning on October 1, at a monthly rate of $1,150. Fragmental collected the entire $9,200 cash on October 1 and recorded it as unearned revenue. Assuming adjusting entries are only made at year-end, the adjusting entry made by Fragmental Co. on December 31 would be:
Multiple Choice
a)A debit to Rent Revenue and a credit to Cash for $3,450.
b)A debit to Rent Revenue and a credit to Unearned Rent for $3,450.
c)A debit to Cash and a credit to Rent Revenue for $9,200.
d)A debit to Unearned Rent and a credit to Rent Revenue for $3,450.
e)A debit to Unearned Rent and a credit to Rent Revenue for $5,750