Question 2 On December 15, 2015, a public company receives an order from a customer for services to be performed on December 28, 2015. Due to a backlog of orders, the company does not perform the services until January 3, 2016. The customer pays for the services on January 6, 2016. When should revenue be recorded for the company? Why (support your argument
In: Accounting
Sales Returns Adjusting Entry
Estimated additional customer returns expected to be 0.5% of year end net sales revenue. Cost of additional expected returned inventory is estimated to be 195$. 80% of additional expected returns are estimated to come from sales on account. 20% of additional expected returns are estimated to come from cash sales.
Net Sales = 61152
In: Accounting
In accounting its important to understand that there may be events that occur that are not business transactions. Please give us an example of a business transaction that affects the accounting equation. Remember that the expanded accounting equation is: Assets = Liabilities + Owner's Equity + Revenue - Expenses. Please be sure that you provide this transaction in General Journal format. Additionally give us an example of an event that is not an accounting transaction.
In: Accounting
a) The price elasticity of a good is -4.2. What does this mean? What would happen to the total revenue collected if prices were to increase by 10%?
b)The income elasticity of a good is 0.25. What can we conclude about this good? Explain.
c) The cross price of elasticity of a good is -1.5. What can we conclude about this good? Explain.
In: Economics
A government is the recipient of a bequest of a multi-story office building that the government intends to use as a new city hall. The building has a historical cost of $850,000; a book value in the hands of the benefactor of $700,000; and a fair value of $1,050,000. The city should recognize on its governmental fund financial statements donations revenue of
Explanation to the answer please
In: Accounting
(a) Using an appropriate diagram Illustrate and explain the welfare effects of a unit tax on a commodity within the framework of indifference curves analysis
(b) Illustrate on the same diagram, the welfare effects of a lump-sum tax that generates the same amount of tax revenue as in (a). (1.5 marks)
(c). Are the welfare effects the same? Is any of the taxes efficient? Explain why or why not. (1.5 marks)
In: Economics
Define in own words
CHAPTER 5 – Accounting Systems
In: Accounting
In proper General Journal format, record the transactions for the month; include descriptions of each transaction with your journal entry. Use only the accounts shown in the chart of accounts.
8/1 YOU filed a charter with the State of Louisiana to form the YOUR Accounting Corporation. The charter authorizes you to issue 5000 shares of $2 par common stock. The state charged you a $75 fee to file the charter. Since your business is not yet approved, you had to pay this fee using personal funds.
9/1 You received your charter from the State of Louisiana and officially opened your business. Your first order of business was to become a shareholder of YOUR Accounting Corp. To do this, you purchased 500 shares of common stock by issuing a check to YOUR Accounting Corp for $10,000. You used this money to open a checking account at First Funds Bank.
9/1 You rented an office for YOUR Accounting Corp. The monthly rent is $500, with the first month’s rent due immediately. You issue check #100 to Office Builders for the first month’s rent.
9/2 You then went to the Apple store and purchased a new computer system for your business. Your Mac Pro cost $2700 and your new printer cost $450. You set up a 30-day account with Apple to make this purchase.
9/3 You ordered business cards and stationary from Marketing Media on account. The order totaled $250 and will be shipped FOB Destination. (Record all purchases of supplies in the Supplies on Hand account).
9/4 You decided to purchase a new vehicle for your business. Upon visiting Pro-Auto, you decide on a new SUV at a cost of $55,000. This vehicle will be used 100% for business purposes. You finance the vehicle with Pig E Bank at a rate of 5% for 6 years. Your first monthly payment is due on October 4.
NOTE: You will need to create a loan amortization schedule to determine the amount of the monthly note and the interest expense for each month. You can use a website such as www.bankrate.com to create the schedule. When recording your journal entries, round all amounts to the nearest dollar.
9/5 You went to the KEM Supply to purchase supplies for your business at a cost of $600. KEM opened a customer charge account for you. The payment terms on your account will be 2/10, net 30. The time period for determining the payment amount begins on the purchase date.
9/6 You purchased a one-year auto insurance policy from InsureMart for $1200. InsureMart will send you a bill for the policy. YOUR Accounting Corporation capitalizes all insurance policies on the date of purchase and records the necessary expense at year-end as an adjusting entry.
9/10 Your first client, Red Fische, came in today needing assistance with filing the appropriate paperwork to start his new seafood restaurant. You issued invoice #1 to Red Fische and he paid you an initial $2,000 Engagement Fee. Red Fische also agreed to contract with you to provide accounting services for $2,500 per month.
9/12 You issue check #101 to YOUR Accounting Corp to establish a $500 Petty Cash Fund. You will use this account to make small cash purchases.
9/12 You reimburse yourself for the filing fees associated with forming your corporation.
9/14 You paid KEM Supply by issuing check #102
9/15 You hire an administrative assistant, Mandi Handi, she will be paid a monthly salary of $1500. You have decided that all pay periods will end on the last day of the month and that checks will be issued on the 5th of each month.
NOTE: Assume the following rates when preparing the payroll: federal income tax 15%, state income tax 5%, and FICA 7.65%.
YOUR Accounting Corp. has state and federal unemployment insurance rates of 1% (FUTA) and 2% (SUTA) on the first $7,700 of wages per employee. The employer FICA rate is 7.65%.
9/16 Marketing Media delivered your business cards and stationary. Check #103 was issued to pay for the supplies.
9/20 You visited a new client, Anita Cooke, to set up a Quickbooks accounting system for her new business, Cooking For You. You gave Anita and invoice #2 for the Engagement Fee and she paid you by issuing a check in the amount of $2,000. Anita also agreed to a monthly fee of $1,500 for you to handle her ongoing accounting needs.
9/22 You purchased $50 of fuel for your new SUV from Get ‘n Go. You charged this to your Get ‘n Go account.
9/30 Mandi sent pro-rated invoices, #3 & #4 , to Red Fische and Cooking For You for Monthly Accounting Services. The payment terms are 1/10, net 30.
9/30 You accrued interest on the Pig E. Bank note. Accrue interest based on the number of days in the month.
9/30 You computed and accrued the payroll for September.
9/30 You received monthly bills for the following:
Max Power Company - $100, terms n/30
WaterWorks #1 - $20, terms n/30.
CHART OF ACCOUNTS:
| Cash | 105 | ||
| Petty Cash | 107 | ||
| Accounts Receivable | 110 | ||
| Supplies on Hand | 130 | ||
| Prepaid Insurance | 140 | ||
| Computer Equipment | 220 | ||
| Accoumulated Depreciation - Computer Equipment | 221 | ||
| Cell Phone | 230 | ||
| Accoumulated Depreciation - Cell Phone | 231 | ||
| Vehicles | 240 | ||
| Accumulated Depreciation - Vehicles | 241 | ||
| Accounts Payable | 310 | ||
| Customer Deposits (Unearned Revenue) | 320 | ||
| SUTA Payable | 330 | ||
| FICA Payable | 332 | ||
| FUTA Payable | 334 | ||
| Federal Income Tax Payable | 336 | ||
| State Income Tax Payable | 338 | ||
| Current Maturities of Long-Term Debt | 375 | ||
| Notes Payable (long-term) | 410 | ||
| Interest Payable | 420 | ||
| Salaries Payable | 425 | ||
| Common Stock ($2 par value) | 520 | ||
| Additional Paid-in Capital on Common Stock | 521 | ||
| Retained Earnings | 550 | ||
| Dividends | 560 | ||
| Engagement Fees | 605 | ||
| Monthly Accounting Services Revenue | 610 | ||
| Hourly Accounting Services Revenue | 620 | ||
| Tax Services Revenue | 612 | ||
| Sales Discounts | 614 | ||
| Advertising & Promotion Expense | 725 | ||
| Depreciation Expense | 727 | ||
| Rent Expense | 730 | ||
| Insurance Expense | 735 | ||
| Supplies Expense | 740 | ||
| Meals & Entertainment | 745 | ||
| Taxes & Licenses | 767 | ||
| Telephone Expense | 770 | ||
| Utilities Expense | 775 | ||
| Fuel Expense | 780 | ||
| Interest Expense | 820 | ||
| Payroll Tax Expense | 825 | ||
| Salaries Expense | 830 | ||
| Income Summary | 900 | ||
In: Accounting
| Account Title | Debits | Credits | |
| Cash | 30,000 | ||
| Accounts receivable | 40,000 | ||
| Supplies | 1,500 | ||
| Inventory | 60,000 | ||
| Note receivable | 20,000 | ||
| Interest receivable | 0 | ||
| Prepaid rent | 2,000 | ||
| Prepaid insurance | 0 | ||
| Office equipment | 80,000 | ||
| Accumulated depreciation—office equipment | 30,000 | ||
| Accounts payable | 31,000 | ||
| Salaries and wages payable | 0 | ||
| Note payable | 50,000 | ||
| Interest payable | 0 | ||
| Deferred revenue | 0 | ||
| Common stock | 60,000 | ||
| Retained earnings | 24,500 | ||
| Sales revenue | 148,000 | ||
| Interest revenue | 0 | ||
| Cost of goods sold | 70,000 | ||
| Salaries and wages expense | 18,900 | ||
| Rent expense | 11,000 | ||
| Depreciation expense | 0 | ||
| Interest expense | 0 | ||
| Supplies expense | 1,100 | ||
| Insurance expense | 6,000 | ||
| Advertising expense | 3,000 | ||
| Totals | 343,500 | 343,500 | |
Information necessary to prepare the year-end adjusting entries
appears below.
Depreciation on the office equipment for the year is $10,000.
Employee salaries and wages are paid twice a month, on the 22nd for salaries and wages earned from the 1st through the 15th, and on the 7th of the following month for salaries and wages earned from the 16th through the end of the month. Salaries and wages earned from December 16 through December 31, 2018, were $1,500.
On October 1, 2018, Pastina borrowed $50,000 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 12%. The principal is due in 10 years.
On March 1, 2018, the company lent a supplier $20,000 and a note was signed requiring principal and interest at 8% to be paid on February 28, 2019.
On April 1, 2018, the company paid an insurance company $6,000 for a two-year fire insurance policy. The entire $6,000 was debited to insurance expense.
$800 of supplies remained on hand at December 31, 2018.
A customer paid Pastina $2,000 in December for 1,500 pounds of spaghetti to be delivered in January 2019. Pastina credited sales revenue.
On December 1, 2018, $2,000 rent was paid to the owner of the building. The payment represented rent for December 2018 and January 2019 at $1,000 per month.
6. Prepare a post-closing trial balance.
In: Accounting
Section 8.1 Expanded: Constructing the nonlinear profit contribution expression Let PS and PD represent the prices charged for each standard golf bag and deluxe golf bag respectively. Assume that “S” and “D” are demands for standard and deluxe bags respectively. S = 2250 – 15PS (8.1) D = 1500 – 5PD (8.2) Revenue generated from the sale of S number of standard bags is PS*S. Cost per unit production is $70 and the cost for producing S number of standard bags is 70*S. So the profit for producing and selling S number of standard bags = revenue – cost = PSS – 70S (8.3) By rearranging 8.1 we get 15PS = 2250 – S or PS = 2250/15 – S/15 or PS = 150 – S/15 (8.3a) Substituting the value of PS from 8.3a in 8.3 we get the profit contribution of the standard bag: (150 –S/15)S – 70S = 150S – S2/15 – 70S = 80S – S2/15 (8.4) Revenue generated from the sale of D number of deluxe bags is PD*D. Cost per unit production is $150 and the cost for producing D number of deluxe bags is 150*D. So the profit for producing and selling D number of deluxe bags = revenue – cost = PDD – 150D (8.4a) By rearranging 8.2 we get 5PD = 1500 – D or PD = 1500/5 – D/5 or PD = 300 – D/5 (8.4b) Substituting the value of PD from 8.4b in 8.4a we get the profit contribution of the deluxe bags: (300 -D/5)D – 150D = 300D – D2/5 – 150D = 150D – D2/5 (8.4c) By adding 8.4 and 8.4c we get the total profit contribution for selling S standard bags and D deluxe bags. Total profit contribution = 80S –S2/15 + 150D – D2/5 (8.5) Reconstruct new objective function for 8.5 by changing “15PS” to “8PS” in 8.1, “5PD” to “10PD” in 8.2, cost per unit standard bag from 70 to “last two digits of your UTEP student ID” and cost per unit deluxe bag from 150 to 125. Keep other parameter values unchanged. Use up to 2 decimal points accuracy. Substitute the new expression for 8.5 in the excel solver workbook as explained in the class and solve for the optimal combination values for S and D.
In: Statistics and Probability