Hair World Inc. is a wholesaler of hair supplies. Hair World uses a perpetual inventory system. The following transactions (summarized) have been selected for analysis: a. Sold merchandise for cash (cost of merchandise $8,797). $11,200 b. Received merchandise returned by customers as unsatisfactory (but in perfect condition), for cash refund (original cost of merchandise $60). 100 c. Sold merchandise (costing $2,375) to a customer, on account with terms 2/10, n/30. 5,000 d. Collected half of the balance owed by the customer in (c) within the discount period. 2,450 e. Granted a partial allowance relating to credit sales that the customer in (c) had not yet paid 80
1.
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Compute Sales Revenue, Net Sales, and Gross Profit for Hair World. 2.
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In: Accounting
The net accounts receivable on the books of GJY Corp. as of 1 January 20X3 are as follows:
Accounts receivable ............................................................. $ 281,000
Less: Allowance for sales discounts .................................. 6,000
Allowance for doubtful accounts ...................................... 20,650
$254,350
During the year, the sales discount allowance is left unchanged, with discounts recorded directly in the sales discounts account. Allowances are adjusted at year end. Summarized transactions during 20X3 are as follows:
a. Sales revenue was $620,000, of which 70% was on credit.
b. Customers paid off $492,500 of the outstanding accounts receivable. Of this reduction to the accounts receivable, $300,000 was paid in time to earn a 2% discount.
c. Accounts of $7,650 were written off at year end.
d. There were recoveries of previously written off accounts in the amount of $1,400.
e. At year end, analysis of accounts receivable indicates that an allowance of $3,950 is needed for sales discounts.
f. At year end, the allowance for doubtful accounts is increased by 1% of gross credit sales.
Required:
1. Prepare journal entries for the above transactions.
2. Show how the net accounts receivable appear on the statement of financial position on 31 December 20X3.
3. Do you have any concerns about the level of the allowance for doubtful accounts? Explain.
In: Accounting
The general ledger of Zips Storage at January 1, 2021, includes the following account balances:
| Accounts | Debits | Credits | |||||
| Cash | $ | 25,000 | |||||
| Accounts Receivable | 15,800 | ||||||
| Prepaid Insurance | 12,800 | ||||||
| Land | 152,000 | ||||||
| Accounts Payable | $ | 7,100 | |||||
| Deferred Revenue | 6,200 | ||||||
| Common Stock | 147,000 | ||||||
| Retained Earnings | 45,300 | ||||||
| Totals | $ | 205,600 | $ | 205,600 | |||
The following is a summary of the transactions for the year:
| 1. | January | 9 | Provide storage services for cash, $138,100, and on account, $54,200. | |||
| 2. | February | 12 | Collect on accounts receivable, $51,900. | |||
| 3. | April | 25 | Receive cash in advance from customers, $13,300. | |||
| 4. | May | 6 | Purchase supplies on account, $10,000. | |||
| 5. | July | 15 | Pay property taxes, $8,900. | |||
| 6. | September | 10 | Pay on accounts payable, $11,800. | |||
| 7. | October | 31 | Pay salaries, $127,600. | |||
| 8. | November | 20 | Issue shares of common stock in exchange for $31,000 cash. | |||
| 9. | December | 30 | Pay $3,200 cash dividends to stockholders. |
2. Record each of the summary transactions listed above. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
Prepare an unadjusted trial balance, as well.
In: Accounting
Congratulations! You are the CEO of GE. GE company culture is all about quality and process improvement!
You are leading a company meeting where you need to convince and inspire your employees that Quality Systems will be the tools to market your Brand and skyrocket your revenue.
12. What is the swiss cheese model for security? Explain to your employees the risks of quality vulnerabilities.
13. What is the Domino effect? Explain to your employees how one quality issue escalates to several company functions, and spreads to the entire supply chain.
In: Operations Management
ABC Company formed in 2020. ABC company files their tax return using the accrual basis of accounting. ABC’s profit and loss showed the following:
Revenue - $1,000,000
Expenses:
Salaries - $700,000
Office Expense - $50,000
Supplies - $20,000
Postage - $10,000
Meals - $7,000
Entertainment - $1,000
Repairs - $2,000
Rent - $50,000
Political Contributions - $2,500
Calculate ABC company’s taxable income using the accounts above. Assuming ABC company operates a sole proprietorship, calculate the Qualified Business Income Deduction for 2020.
In: Accounting
Think up a company you would like to start. Then, choose an organizational type. Assume the company will start on January 1st, 2020. Create 10 transactions for the year 2020. Please make sure you use entries which affect equity, revenue, expenses, assets and liabilities. You can draw the "T" accounts or you can describe the affect of the transactions on the financial statement. Then, show the income statement, the balance sheet and the statement of equity for the year ending 12/31/2020.
Any company or organization is fine!
In: Accounting
ACCT 301
ASSIGNMENT 4
In: Accounting
A new publicly financed bridge is expected to reduce
the cost of auto travel between two areas by Php1 per trip. This
cost reduction to motorists consists of a reduction in travel time,
auto depreciation and petrol expenses totaling Php1.50 per trip,
less the Php0.50 bridge toll which the government will collect.
Before the bridge was built there were 1 million trips per year
between the two areas. Once the bridge is in operation, it is
estimated that there will be 1.5 million trips per year between the
two areas. In terms of areas under the demand curve, what is the
annual benefit of the bridge:
To motorists?
To the government?
What other referent group benefits would need to be considered in a
social benefit/cost analysis?
In: Economics
Blossom Inc., a publicly accountable enterprise that reports in
accordance with IFRS, issued convertible bonds for the first time
on January 1, 2017. The $1 million of six-year, 10% (payable
annually on December 31, starting December 31, 2017), convertible
bonds were issued at 107, yielding 7%. The bonds would have been
issued at 96 without a conversion feature, and yielding a higher
rate of return. The bonds are convertible at the investor’s
option.
The company’s bookkeeper recorded the bonds at 107 and, based on
the $1,070,000 bond carrying value, recorded interest expense using
the effective interest method for 2017. He prepared the following
amortization table:
| Cash Interest | Effective Interest | Premium | Carrying Amount | ||||||||
| Date | (10%) | (7%) | Amortization | of Bonds | |||||||
| Jan. 1, | 2017 | $1,070,000 | |||||||||
| Dec. 31, | 2017 | $100,000 | $74,900 | $25,100 | 1,044,900 | ||||||
You were hired as an accountant to replace the bookkeeper in November 2018. It is now December 31, 2018, the company’s year end, and the CEO is concerned that the company’s debt covenant may be breached. The debt covenant requires Blossom to maintain a maximum debt to equity ratio of 2.3. Based on the current financial statements, the debt-to-equity ratio would be 2.6. The CEO recalls hearing that convertible bonds should be reported by separating out the liability and equity components, yet he does not see any equity amounts related to the bonds on the current financial statements. He has asked you to look into the bond transactions recorded and make any necessary adjustments. He would also like you to explain how any adjustments that you make affect the debt to equity ratio.
Determine the amount that should have been reported in the equity section of the statement of financial position at January 1, 2017, for the conversion right, considering that the company must comply with IFRS.
Prepare the journal entry that should have been recorded on January 1, 2017
Using a financial calculator or computer spreadsheet functions, calculate the effective rate (yield rate) for the bonds.
Prepare a bond amortization schedule from January 1, 2017, to December 31, 2021, using the effective interest method and the corrected value for the bonds.
Prepare the journal entry dated January 1, 2018 to correct the bookkeeper’s recording errors in 2017. Ignore income tax effects.
Prepare the journal entry at December 31, 2018 for the interest payment on the bonds.
In: Accounting
The primary operating goal of a publicly-owned firm interested in serving its stockholders should be to
| a. |
Maximize the stock price on a specific target date. |
|
| b. |
Maximize the firm's expected total income. |
|
| c. |
Minimize the chances of losses. |
|
| d. |
Maximize the firm's expected EPS. |
|
| e. |
Maximize the stock price per share over the long run, which is the stock's intrinsic value. |
Which of the following statements regarding a 30-year monthly payment amortized mortgage with a nominal interest rate of 8% is CORRECT?
| a. |
The amount representing interest in the first payment would be higher if the nominal interest rate were 6% rather than 8%. |
|
| b. |
A smaller proportion of the last monthly payment will be interest, and a larger proportion will be principal, than for the first monthly payment. |
|
| c. |
The monthly payments will decline over time. |
|
| d. |
Exactly 8% of the first monthly payment represents interest. |
|
| e. |
The total dollar amount of principal being paid off each month gets smaller as the loan approaches maturity. |
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In: Finance