On July 1, Ruth Co. sold inventory costing $9,000 to Diana, Inc. for $12,000, terms 2/10, n/30. Both companies use the net method to account for sales discounts. If Diana pays within the discount period, what journal entry will be recorded by Ruth Company when payment is received?
Debit Cash for $11,760 and credit Accounts Receivable for $11,760.
Debit Cash for $11,760, debit Sales Revenue for $240 and credit Accounts Receivable for $12,000.
Debit Cash for $12,000 and credit Accounts Receivable for $12,000.
Debit Accounts Payable for $12,000, credit Cash for $11,760 and credit Inventory for $240.
In: Accounting
On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In exchange for the buses, Wright received a note requiring payment of $531,000 by Elmira on December 31, 2023. The effective interest rate is 7%.
Required:
1. How much sales revenue would Wright
recognize on January 1, 2021, for this transaction?
2. Prepare journal entries to record the sale of
merchandise on January 1, 2021 (omit any entry that might be
required for the cost of the goods sold), the December 31, 2021,
interest accrual, the December 31, 2022, interest accrual, and
receipt of payment of the note on December 31, 2023.
In: Accounting
In: Accounting
Patton Company purchased $1,500,000 of 10% bonds of Scott Company on January 1, 2018, paying $1,410,375. The bonds mature January 1, 2028; interest is payable each July 1 and January 1. The discount of $89,625 provides an effective yield of 11%. Patton Company uses the effective-interest method and plans to hold these bonds to maturity.
*USE T ACCOUNTS
On July 1, 2018, Patton Company should increase its Debt Investments account for the Scott Company bonds by?
For the year ended December 31, 2018, Patton Company should report interest revenue from the Scott Company bonds of?
In: Accounting
Definition: Reporting liabilities on the balance sheet and computing debt to
equity ratio
The accounting records of Pack Leader Wireless include the following as of
December 31, 2018:
Accounts Payable $ 77,000 Salaries Payable $ 7,500
Mortgages Payable (long-term) 73,000 Bonds Payable (current portion) 25,000
Interest Payable 18,000 Premium on Bonds Payable 10,000
Bonds Payable (long-term) 63,000 Unearned Revenue (short-term) 2,700
Total Stockholders’ Equity 140,000
Requirements
1. Report these liabilities on the Pack Leader Wireless balance sheet, including headings and totals for current liabilities and long-term liabilities.
In: Computer Science
Consider the following information from a company’s unadjusted trial balance at December 31, 2018. All accounts have normal balances.
| Accounts Receivable | $ | 4,800 | |
| Accounts Payable | 665 | ||
| Cash | 1,730 | ||
| Service Revenue | 5,890 | ||
| Common Stock | 4,300 | ||
| Equipment | 5,200 | ||
| Insurance Expense | 415 | ||
| Land | 4,100 | ||
| Notes Payable, Due 2021 | 4,300 | ||
| Notes Receivable, Matures 2019 | 1,230 | ||
| Prepaid Insurance | 415 | ||
| Rent Expense | 1,415 | ||
| Retained Earning, January 1, 2018 | 7,880 | ||
| Salaries and Wages Expense | 3,730 | ||
How do you come up with the total of the debit side of the unadjusted trial balance?
In: Finance
These items are taken from the financial statements of Longhorn Co. at December 31, 2017.
Buildings | $105,800 |
Accounts receivable | 12,600 |
Prepaid insurance | 3,200 |
Cash | 11,840 |
Equipment | 82,400 |
Land | 61,200 |
Insurance expense | 780 |
Depreciation expense | 5,300 |
Interest expense | 2,600 |
Common stock | 60,000 |
Retained earnings (January 1, 2017) | 40,000 |
Accumulated depreciation—buildings | 45,600 |
Accounts payable | 9,500 |
Notes payable | 93,600 |
Accumulated depreciation—equipment | 18,720 |
Interest payable | 3,600 |
Service revenue | 14,700 |
Instructions
Prepare a classified balance sheet. Assume that $13,600 of the note payable will be paid in 2018.
In: Accounting
When a profit-maximizing firm in a monopolistic competitive market is in long-run equilibrium, marginal cost is rising since an increase in production would increase average total cost.
true or false
The product-variety externality associated with monopolistic competition arises because in markets that are monopolistic competitive markets, firms try to differentiate their products.
true or false
If the monopolistic competitive firm is currently producing output at a level where the marginal cost curve intersects the demand curve, then it is producing at the social optimum; however, reducing output will cause profit to increase because marginal cost exceeds marginal revenue at the social optimum.
true or false
In: Economics
In: Economics
Two Hints: First, recall that R(Q) = P(Q) times Q, and that the price elasticity of demand is defined as .
Second, recall the condition MR = MC. Think about how the firm’s revenue will change if it starts at a point where the price elasticity is exactly -1 and increases Q by 1%, and remember that any increases in Q has a marginal cost.
In: Economics