1)Company XYZ had total credit sales of $1,235,000. Calculate bad debt expense assuming the company estimates bad debt at 1% of sales made during the year (using the income statement approach). Record the journal entry to record the bad debt estimation.
| Accounts | Debit | Credit |
|
[ Select ] ["Bad Debt Expense", "Accounts Receivable", "Allowance for Doubtful Accounts", "Cash"] |
[ Select ] ["12,350", "123,500", "1,235", "1,235,000"] | |
|
[ Select ] ["Allowance for Doubtful Accounts", "Accounts Receivable", "Bad Debt Expense", "Cash"] |
[ Select ] ["12,350", "1,235,000", "1,235", "123,500"] |
2) Geeves Co made $5,000,000 of sales during 2011. The company’s ending A/R balance is $300,000 (debit) and the ending balance in the Allowance for Doubtful Accounts account is $2,000 (credit).
Calculate bad debt expense assuming the company estimates bad debt at 5% of ending A/R (using the balance sheet approach). Record the journal entry to record the bad debt estimation. Don’t forget to factor in the existing Allowance balance.
| Accounts | Debit | Credit |
|
[ Select ] ["Cash", "Accounts Receivable", "Bad Debt Expense", "Allowance for Doubtful Accounts"] |
[ Select ] ["2,000", "250,000", "13,000", "15,000"] |
|
|
[ Select ] ["Accounts Receivable", "Allowance for Doubtful Accounts", "Cash", "Cash"] |
[ Select ] ["13,000", "250,000", "15,000", "2,000"] |
3)On October 18, 2020, Reese's Co. accepted a note receivable in the amount of $400,000. The note carries an interest rate of 13% and is due in one year. Calculate the interest amount earned at December 31, 2020. Interest starts accruing on October 19th. Assume a 360 day year. Round to the nearest whole dollar.
| $ |
4) On January 5, 2011, Breaker Ltd receives a $10,000, 90 day, 11% note from a customer (K. Durant) from a sale of services. Record the journal entry for the sale (and acceptance of note) and the journal entry when the note comes due (record all interest earned). Assume a 360 day year.
January 5, 2011:
| Accounts | Debit | Credit |
| [ Select ] ["Service Revenue", "Accounts Receivable", "Cash", "Notes Receivable"] | 10,000 | |
| [ Select ] ["Accounts Receivable", "Service Revenue", "Notes Receivable", "Cash"] | 10,000 |
April 5, 2011
| Accounts | Debit | Credit |
|
[ Select ] ["Cash", "Notes Receivable", "Accounts Receivable", "Interest Revenue"] |
[ Select ] ["1,100", "10,275", "11,100", "10,000"] |
|
|
[ Select ] ["Interest Expense", "Accounts Receivable", "Notes Receivable", "Cash"] |
[ Select ] ["11,100", "1,100", "10,000", "275"] |
|
|
[ Select ] ["Interest Revenue", "Cash", "Interest Expense", "Accounts Payable"] |
[ Select ] ["11,100", "10,275", "275", "1,100"] |
5)
G. Love and Special Sauce Inc had $400,000 in sales during 2020. The company’s beginning A/R balance is $25,000 and its ending A/R balance is $32,000.
Calculate A/R Turnover: [select] ["9.78", "14.55", "18.11", "13.21"]
Calculate Days Sales Outstanding: [select] ["22.8 days", "25.1 days", "29.2 days", "26.4 days"]
In: Accounting
Requirement:
Record the Journal Transaction with discount amount with Gross Method and Net Method.
In: Accounting
On June 8, Alton Co. issued an $60,800, 12%, 120-day note payable to Seller Co. Assume that the fiscal year of Seller Co. ends June 30. Using a 360-day year in your calculations, what is the amount of interest revenue recognized by Seller in the following year? When required, round your answer to the nearest dollar.
$7,296
$1,986
$608
$1,216
In: Accounting
For the following reaction, Kc = 255 at 1000 K. CO (g) + Cl2 (g) ⇌ COCl2 (g) A reaction mixture initially contains a CO concentration of 0.1450 M and a Cl2 concentration of 0.171 M at 1000 K.
A. What is the equilibrium concentration of CO at 1000 K?
B. What is the equilibrium concentration of Cl2 at 1000 K?
C. What is the equilibrium concentration of COCl2 at 1000 K?
In: Chemistry
Given the following data:
3FeO(s) + CO2(g) → Fe3O4(s) + CO(g) ΔH° = -18.0 kJ
FeO(s) + CO(g) → Fe(s) + CO2(g) ΔH° = -11.0 kJ
Fe2O3(s) + 3CO(g) → 2Fe(s) + 3CO2(g) ΔH° = -23.0 kJ
Calculate ΔH° for the reaction: 3Fe2O3(s) + CO(g) → 2Fe3O4(s) + CO2(g)
In: Chemistry
CO2(g) + C(s) = 2 CO(g) a) Using the Bouduard reaction, calculate gas composition in a furnace under 1 atm total pressure and 1100 K. b) Under the same furnace conditions, is it possible to reduce VO to V by CO? ( VO + CO = V + CO2 ) C(s) + O2(g) = CO2(g) o GT = - 394100 – 0.84 T J/mol C(s) + ½ O2(g) = CO(g) o GT = - 111700 – 87.65 T J/mol V(s) + ½ O2(g) = VO (s) o GT = - 424700 + 80.04 T J/mol
In: Other
Santana Company exchanged equipment used in its manufacturing operations plus $2,000 in cash for similar equipment used in the operations of Delaware Company. The following information pertains to the exchange.
Santana Co. | Delaware Co.
Equipment (cost) $28,000 | $18,000
Accumulated depreciation 9,000 | 10,000
Fair value of equipment 14,000 | 16,000
Cash given up 2,000
Please indicate whether an account is an asset (A), liability (L), or equity (E) for journal entries, adjusting entries, and closing entries.
Prepare the journal entries to record the exchange on the book of Santana Co. and Delaware Co. Assume that the exchange lacks commercial substance.
In: Accounting
there are many assessments that coaches use, initially or during the coaching relationship to support the client in creating greater self-awareness as well as a vision and goals. chapter 8( Moore) provides 13 different assessments. locate one of these assessments and administer it to a co-worker. after completing the assessment, discuss it with the co-worker, and provide insight into the results of the assessment. make sure to share with the co-worker that this is part of a graduate class and that you are not a certified executive coach. write a 3page (1000word min.) paper about the assessment, the administration of the assessment, the days from the completed assessment and what coaching recommendation(s) or advice was provided to the co-worker.
In: Operations Management
32. The discounted present value of a payment is the value ___ of the payment ___.
a. today; made yesterday
b. tomorrow; made today
c. today; made tomorrow
d. tomorrow; made yesterday
e. yesterday; made today
33. The term structure of interest rates:
a. represents the variation in yields for similar instruments differing only in maturity.
b. reflects differing tax treatment received by different instruments.
c. always results in an upward-sloping yield curve.
d. usually results in an inverted yield curve.
e. depends upon the payment terms of the security – whether coupons are paid out every six months versus every year.
34. When it comes to financial matters, the views of Aristotle can be stated as:
a. usury is nature’s way of helping each other.
b. the fact that money is barren makes it the ideal medium of exchange.
c. charging interest is immoral because money is not productive.
d. when you lend money, it grows more money.
e. interest is too high if it can’t be paid back.
35. Which of the following is true?
a. Early forms of interest arose from the lending of seeds and animals that could reproduce in order to pay off the interest.
b. Ancient Babylonians that lent silver were regulated in terms of how much interest they could charge.
c. In ancient India, temples served a banking function by issuing what we would today call a “bill of exchange.”
d. In England in the 1600s, money began to take the form of tradeable promissory notes.
e. All of the above.
36. The highest 30 year monthly mortgage rate of interest since 1971 was in:
a. August of 2011.
b. March of 2007.
c. July of 1991.
d. October of 1981.
e. May of 1985.
37. According to Louise Yamada, based on interest rate changes in America over the past two hundred years:
a. we should expect rates to have bottomed out in recent years and to rise for many years to come.
b. we have seen ten sharp downturns in interest rates over the many cycles since 1798.
c. interest rates will be falling by 3% to 5% over the next ten years.
d. higher interest rates signal the end of a bull market until they get up to about 5%.
e. None of the above.
38. Which of the following is false about Harvard professor Paul Schmelzing’s views and study of interest rates?
a. When interest rates change, they will rise only very slowly.
b. Most of the depressions in real interest rates for the past 700 years were due to wars and natural catastrophes.
c. His study included rates from Italy in the 14th and 15th centuries.
d. The real rate over the past 700 years has averaged under 5%.
e. The real rate over the past 200 years has averaged 2.6%.
41. During World War I, the marginal income tax rate (which began in 1913) on incomes over $750,000 was:
a. 1%.
b. 11%.
c. 25%.
d. 42%.
e. 76%.
In: Economics
ZeroLeverage Co is a manufacturing firm. The company generates an EBIT of $250,000 per year and forever. ZeroLeverage Co will always distribute its earnings as dividends to its shareholders. ZeroLeverage Co’s current capital structure includes 100% equity. There are 100,000 shares of common stocks outstanding. ZeroLeverage Co’ project has a market beta 1.5. The risk-free asset is yielding 5% per year, and the market risk premium is 5% per year.
Recently, the CEO of ZeroLeverage Co, Mr. Peter Kyle, attended a Corporate Finance class. He learned that different capital structure may have some impacts on firm value. ZeroLeverage Co currently faces 35% corporate tax rate. Although ZeroLeverage Co doesn’t have any debt, many investment banks and financial advisors have approached Mr. Peter Kyle about the possibility of issuing bonds or borrowing from banks. Due to its good reputation, ZeroLeverage Co can get very favorable interest rates of 7%. Mr. Peter Kyle wants to know if it is a good idea to issue some debt and use the proceeds to buy back shares. To be specific, Mr. Peter Kyle is thinking about a potential start at issuing $1 million perpetual debt paying 7% interest per year and uses the money to buy back some shares of common stocks. Please help him evaluate the following questions.
(a) What is the expected rate of return for ZeroLeverage Co’s stock? (b) (3 points) What is the market value of ZeroLeverage Co if it keeps 100% equity? And what is ZeroLeverage Co’s stock price as an all-equity firm?
(c) What will be the market value of ZeroLeverage Co if it issues $1 million of perpetual debt paying 7% interest per year and uses the money to buy back some shares of common stocks?
(d) If ZeroLeverage Co issues $1 million of perpetual debt and uses the money to buy back some shares of common stocks, how many shares of common stocks will ZeroLeverage Co be able to buy back and what is the new stock price?
(e) What is the cost of equity and WACC of ZeroLeverage Co after it issue the debt?
(f). What are the possible relationships between capital structure and firm value under MM theorem without corporate tax and bankruptcy cost, under the MM theorem with only corporate tax, under the MM theorem with both corporate tax and bankruptcy cost?
In: Finance