# Consider These Transactions: (Credit Account Titles Are Automatically Indented When Amount Is Entered. (2023)

No. Account titles and explanation Debit Credit

(a)Cash \$2,304

Service Charge Expense(\$2,400 * 4%) \$96

Sales Revenue \$2,400

No. Account titles and explanation Debit Credit

(b)Cash \$57,024

Service Charge Expense(\$59,400 * 4%) \$2,376

Accounts Receivable \$59,400

## Related Questions

The Commerce Department reported that in December​ 2015, retail sales rose by 0.2​ percent, net exports​ decreased, inventories held by businesses rose by 0.1​ percent, and total sales by businesses fell by 0.6 percent. ​Source: Commerce​ Department, February 2016 Explain the effect of the fall in net exports on GDP.

GDP reduces.

Explanation:

Gross Domestic Product includes four components:

= Consumption spending + investment spending + Government spending + Net exports

It was given that business experiencing a rise in its inventory (0.1 percent) and reduction in the total sales (0.6 percent).

We know that net exports are added to the nation's GDP, so any change in the net exports will also affect the GDP. Therefore, if there is a fall in the net exports then as a result there is a reduction in the GDP.

A shop that makes candles offers a blueberry scented candle which has daily demand of 10 boxes. Blueberry candles can be produced at a rate of 36 boxes per day. The shop operates 365 days a year. Setup cost is \$60 for blueberry candles, regardless of how many boxes of blueberry candles are produced, and holding cost is \$24 per box per year. Assuming the shop is minimizing its costs, which of the following is closest to the maximum number of blueberry candles the shop will ever have in inventory? A. 98 boxesB. 135 boxesC. 7 boxesD. 159 boxesE. 115 boxes

E. 115 boxes.

Explanation:

d: 10 boxes/day

p: 36 boxes/day

n: 365 days

s: \$60

H: \$24 box/year

D: d*n

D= 10*365= 3650 boxes/year

EPQ =

EPQ=

EPQ= 158.96 = 159 units

I=Q/P * (p-d)

I=159/36 * (36-10)

I=114.83

115 boxes aproximately

A property consists of 8 office suites, 3 on the first floor and 5 on the second floor. The contract rents are as follows: 2 suites at \$1,800 per month, 1 at \$3,600 per month and 5, at \$1,560 per month. Annual market rent for all suites increase 3% per year after the first year. Vacancy and collection losses are estimated at 10% of potential gross rent per year. Operating expenses and reserve for replacement or capital expenditures are 45% of effective gross income each year. The expected holding period is 5 years. At the end of the holding period you are expecting to sell the property for \$1,180,472.A. Prepare the first year pro forma generating the NOI for year 1.

\$89,100

Explanation:

Let us first calculate annual gross rent for Year 1:

Total rent per month:

= 2 suites at \$1,800 + 1 suites at \$3,600 + 5 suites at \$1,560

= \$3,600 + \$3,600 + \$7,800

= \$15,000

Annual gross rent = Total rent per month × 12

= \$15,000 × 12

= \$180,000

Effective gross revenue = Potential gross rent revenue - Vacancy and connection losses (10% of potential gross rent)

= \$180,000 - \$18,000

= \$162,000

Net operating income = Effective gross revenue - Operating expenses including depreciation

= \$162,000 - \$72,900

= \$89,100

On november 1, 2012 New Morning Bakery signed a \$200000, 6%, six month note payable with the amount borrowed plus accrued interest due in six months later on May 1, 2013. New Morning Bakery records the appropriate adjusting entry for the note on December 31, 2012. What amount of cash will be needed to pay back the note payable plus any accrued interest on May 1, 2013?

\$200,600

Explanation:

The total amount which is paid back with the accrued interest is shown below:

= Note payable + Accrued interest

(Video) The following transactions are for Skysong Company. 1. On December 3, Skysong Company sold \$479,600

where,

Note payable is \$200,000

And, the accrued interest equals to

= Principal × rate of interest × number of months ÷ (total number of months in a year)

= \$200,000 × 6% × (6 months ÷ 12 months)

= \$600

The 6 months is calculated from November 1,2012 to May 1, 2013

Now put these values to the above formula

So, the value would equal to

= \$200,000 + \$600

= \$200,600

A researcher took a random sample of 100 students from a large university. She computed a 95% confidence interval to estimate the average weight of the students at this university. The confidence interval was too wide to provide a precise estimate. True or false? The researcher could produce a narrower confidence interval by increasing the sample size to 150. True False

The sample size refers to the number of samples used in an experiment. When determining the confidence interval, increasing the sample size makes the value obtained close to that obtained from the population. Hence, increasing the sample size would narrow the confidence interval. TRUE.

• Confidence interval = xbar ± z(σ/√(n))

The sample size is the value of n in the formula.

• Sample size being the numerator, reduces the value of the standard error σ/√(n) as it is increased.
• When the value of the standard error decreases, the confidence interval has a narrower margin

Therefore, as the sample size increases, the width of the confidence interval is narrowed.

Explanation: increasing the sample size to 150 will reduce the width of the confidence interval because it reduces the standard error.

On August 15, 2014, Cubs Corp. purchases 5,000 shares of common stock in Sox Inc. at a mar- ket price of \$15 per share. In addition, Cubs pays brokerage fees of \$1,000. On October 20, 2014, Cubs sells the Sox stock for \$10 per share. Required

Prepare all necessary entries on Cubs’s books in connection with the investment beginning with the purchase of the common stock on August 15, 2014, and the sale on October 20, 2014.

Debit Credit

Common Stock 75,000

Cash 75,000

Brokerage fees 1,000

Cash 1,000

Cash 50,000

Loss on sale of common stock 25,000

Common Stock 75,000

Explanation:

5000*15= 75,000

5,000*10= 50,000

75,000-50,000= 25,000

On June 30, 2021, the Esquire Company sold some merchandise to a customer for \$42,000. In payment, Esquire agreed to accept a 6% note requiring the payment of interest and principal on March 31, 2022. The 6% rate is appropriate in this situation. Required: 1. Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2021 interest accrual, and the March 31, 2022 collection. (Do not round intermediate calculations.) 2. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over-or understated in 2021 and 2022?

Explanation:

The journal entries are shown below:

On June 30,

Note receivable A/c Dr \$42,000

To Sales revenue \$42,00

(Being note receivable is sold)

On December 31

Interest receivable A/c Dr \$1,260

To Interest revenue A/c \$1,260

(Being accrued interest is recorded)

The computation of accrued interest is shown below:

= Principal × rate of interest × number of months ÷ (total number of months in a year)

= \$42,000 × 6% × ( 6 months ÷ 12 months)

= \$1,260

The 6 months is calculated from June 30 to December 31

On March 31

Cash A/c Dr \$43,890

To Interest receivable \$1,260

To Interest revenue \$630

To Note receivable \$42,000

(Being cash received in respect of note receivable, interest accrual is recorded)

The computation of accrued interest is shown below:

= Principal × rate of interest × number of months ÷ (total number of months in a year)

= \$42,000 × 6% × ( 3 months ÷ 12 months)

= \$630

The 3 months is calculated from December 31 to March 31

2. In 2021 the income would be understated by \$1,260 and revenue is also not recognized

In 2022 income is overstated by \$1,260 as the income is the same in 2021

8. Sam bought a house that costs \$500,000. Sam got a 96% LTV loan. The lender demanded that Sam buy private mortgage insurance to insure the portion of the loan over 75% LTV. Suppose 5 years later, Sam’s mortgage balance is \$400,000. However Sam defaults and his house sells for \$220,000 in a foreclosure auction. How much will the mortgage insurance company pay Sam’s lender?

The insurance company will pay the mortage of \$400,000

Explanation:

Loan value = 96%* \$500000

= \$480000

75% LTV value = \$375000

Portion of loan over 75% LTV= \$105000.

This is the amount insured.

5 years later, Sam needs \$400000 more to pay. But he defaults.

And he has only paid \$100000 of mortgage loan.

So, insurance company will pay the remaining balance of the amount insured to Sam's lender.

Therefore, The insurance company will pay the mortage of \$400,000.

(Video) ACNT 1303- Chapter 4 (23ed)

If the Fed believes the economy is about to fall into​ recession, it should A. use an expansionary fiscal policy to increase the interest rate and shift AD to the right. B. use its judgment to do nothing and let the economy make the self adjustment back to potential GDP. C. use a contractionary monetary policy to lower the interest rate and shift AD to the left. D. use an expansionary monetary policy to lower the interest rate and shift AD to the right.

D. use an expansionary monetary policy to lower the interest rate and shift AD to the right.

Explanation:

Recession occurs when people do not have money to buy, and that the demand accordingly of each goods falls below.

This clearly reduces money in market as the chain of sale and purchase is low.

To come out of this situation, the Federal Bank, that is central bank responsible for making policies for economy of the country shall take steps.

In this situation the Fed shall reduce the interest rates on borrowings which will attract people to borrow and then there will be money in the hands of people.

Further as people will have the buying power the demand for goods will also increase accordingly the Aggregate Demand curve will also move to right.

Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: MachiningCustomizing
Machine-hours 13,000 29,000
Direct labor-hours 19,000 5,000
Variable manufacturing overhead per direct labor-hour \$4.20

Instructions are listed below.

Explanation:

Giving the following information:

The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labor-hours.

Machine-hours:

Machining= 13,000

Customizing= 29,000

Direct labor-hours:

Machining= 19,000

Customizing= 5,000

Machining = \$68,900

Customizing= \$20,500

Variable manufacturing overhead per machine-hour \$ 1.00

Variable manufacturing overhead per direct labor-hour \$ 4.20

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machining:

Estimated manufacturing overhead rate= (68,900/13,000) + 1= \$6.3 per machine hour

Customizing:

Estimated manufacturing overhead rate= (20,500/5,000) + 4.2= \$8.3 per direct labor hour

Develop a listing of what you believe are the most important metrics for operations managers. (Hint: Be sure to consider the triple bottom line.) How does each metric support the overall financial performance of the organization? What data would be used to support this metric and how would you ensure that the data are of sufficient quality? How does data analytics support your metrics? Be sure to fully explain your rationale for selecting these metrics.

Answer: FTE staff levels (full-time equivalent): FTE per billion dollars of sales for key activities such as cash, debt and investment management, internal bank accounts, financial risks and treasury policies.

Treasury cost: cost per \$1.000 of revenue, including internal and external costs.

Performance: Units processed by FTE for activities such as payment transactions and reconciled bank accounts.

Cycle times: Days needed to complete activities such as resolving bank account discrepancies, developing short-term forecasts and generating the daily cash position.

Triple income statement (or Triple Bottom Line): The triple result is a sustainable business term that refers to the performance of a company expressed in three dimensions: economic, environmental and social.

The risk-free rate of return is 6%, the expected rate of return on the market portfolio is 15%, and the stock of Xyrong Corporation has a beta coefficient of 2.3. Xyrong pays out 45% of its earnings in dividends, and the latest earnings announced were \$9.00 per share. Dividends were just paid and are expected to be paid annually. You expect that Xyrong will earn an ROE of 18% per year on all reinvested earnings forever. a. What is the intrinsic value of a share of Xyrong stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. If the market price of a share is currently \$22, and you expect the market price to be equal to the intrinsic value one year from now, what is your expected 1-year holding-period return on Xyrong stock? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

(i) \$26.49375

(ii) \$29.11

(iii) 52.54%

Explanation:

Required rate of return using CAPM model:

= risk free rate + beta (expected return - risk free rate)

= 0.06 + 2.3 (0.15 - 0.06)

= 0.267 or 26.7%

Growth rate = (1 - dividend payout ratio) × ROE

(Video) Excel Module 3 Textbook Project

= (1 - 0.45) × 0.18

= 0.099 or 9.9%

a)

Dividends per share will be \$4.05 since payout ratio is 45%

Intrinsic value of share = D1 ÷ (Rate - growth)

= 4.05(1.099) ÷ (0.267 - 0.099)

= 4.45095 ÷ 0.168

= \$26.49375

b)

Price after 1 year = 26.49( 1 + 0.099)

Price after 1 year = \$29.11

c)

One year holding period return = ( \$29.11 + 4.45 - 22) ÷ 22

= 0.5254 or 52.54%

A company purchased a weaving machine for \$206,520. The machine has a usedul life of 8 years and a residual value of \$11,000. It is estimated that the machine could produce 752,000 bolts of woven fabric over its useful life. In the first year, 106,000 bolts were produced. In the swcond year, production imcreased to 110,000 units. Using the units-of-production method, what is the amount of depreciation expense that should be recorded for the second year?

The amount of depreciation expense that should be recorded for the second year is \$28,600

Explanation:

The computation of the depreciation per units or bolts under the units-of-production method is shown below:

= (Original cost - residual value) ÷ (estimated production bolts)

= (\$206,520 - \$11,000) ÷ (752,000 bolts)

= (\$195,520) ÷ (752,000 bolts)

= \$0.26 per bolt

Now for the second year, it would be

= Production units in second year × depreciation per bolts

= 110,000 units × 0.26

= \$28,600

Heavy​ Products, Inc. developed standard costs for direct material and direct labor. In​ 2017, AII estimated the following standard costs for one of their major​ products, the 10minus−gallon plastic container. - Budgeted quantity Budgeted price Direct materials 0.10 pounds \$ 50 per pound Direct labor 0.250 hours \$ 20 per hour During​ June, Heavy Products produced and sold 22,,000 containers using 2,100 pounds of direct materials at an average cost per pound of \$ 53 and 5,500 direct manufacturing laborminus−hours at an average wage of \$ 50.50 per hour. The direct manufacturing labor efficiency variance during June is​____________?

Direct labor efficiency variance= \$0

Explanation:

Giving the following information:

Direct labor 0.250 hours \$ 20 per hour. During​ June, Heavy Products produced and sold 22,000 containers using 5,500 direct manufacturing labor−hours at an average wage of \$ 50.50 per hour.

Direct labor efficiency variance= (Standard Quantity - Actual Quantity)*standard rate

Direct labor efficiency variance=[(22,000*0.250) - 5500] * 20= \$0

A small trucking company is planning to install a GPS system in each of the five trucks the company owns. Each system costs \$4600 to install, has a 5-year useful life, and may be salvaged for \$300. Total operating cost for all five systems is \$1000 for the first year, increasing by \$100 per year thereafter. (20 points) a. How much new annual net income is necessary to recover the initial investment of the five GIS systems at the annual effective interest rate of 10%? (10 points) b. The company estimates increased net income of \$6000 per year for all five systems. Is this project financially viable at the annual effective interest rate of 10%? (10 points)

a. The \$7002.73 new annual net income is necessary to recover the initial investment of the five GIS systems at the annual effective interest rate of 10%

b. Since \$6000 revenue is less than \$7002.73 project is not viable financially.

Explanation:

a . Total initial cost = 4600*5

= \$23000

Total Salvage Value = 300*5

= \$1500

Operating cost = \$1000 with a gradient of \$100.

PV of operating cost = 1000(P/A,5,10%) + 100(P/G,5,10%)

= 1000(P/A,5,10%) + 100(P/A,5,10%)(A/G,5,10%)

= 1000*3.7908 + 100*3.7908*1.8101

= 3790.8 + 686.17

= \$4476.97

PV of salvage value = 1500(P/F,5,10%)

=1500*0.6209

= \$931.35

NPV = -23000 - 4476.97 + 931.35

= - \$26545.62

annual revenue to get \$26545 = 26545.62(A/P,5,10%)

= 26545.62*0.2638

= \$7002.73

Annual Revenue = \$7002.73

Therefore, The \$7002.73 new annual net income is necessary to recover the initial investment of the five GIS systems at the annual effective interest rate of 10%

b. Since \$6000 revenue is less than \$7002.73 project is not viable financially.

Marigold Company must decide whether to make or buy some of its components. The costs of producing 60,200 switches for its generators are as follows. Direct materials \$29,500 Variable overhead \$45,600 Direct labor \$25,900 Fixed overhead \$79,600 Instead of making the switches at an average cost of \$3.00 (\$180,600 ÷ 60,200), the company has an opportunity to buy the switches at \$2.74 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated. Prepare an incremental analysis showing whether the company should buy the switches. (Enter negative amounts using either a negative s e.g.-45 or parentheses e.g. (45).)

Instructions are listed below-

Explanation:

Giving the following information:

(Video) FA1 - Chapter 2 - Step by Step Problem 2-3B

The costs of producing 60,200 switches for its generators are as follows:

Direct materials \$29,500 (29,500/60,200= 0.49)

Direct labor \$25,900 (25900/60200= 0.43)

Instead of making the switches at an average cost of \$3.00 (\$180,600 ÷ 60,200), the company has an opportunity to buy the switches at \$2.74 per unit. If the company purchases the switches, all the variable costs and one-fourth of the fixed costs will be eliminated.

Make in house= (0.49 + 0.76 + 0.43)*60,200 + 19,900= \$121,036

We only have into account 25% of fixed costs that are avoidable.

Outsource= 2.74*60,200= \$164,948

It is cheaper to make in the house.

A \$6,000, 60-day, 12% note recorded on November 21 is not paid by the maker at maturity. The journal entry to recognize this event is A. debit Cash, \$6,120 credit Notes Receivable, \$6,120B. debit Accounts Receivable, \$6,120 credit Notes Receivable, \$6,000 Credit Interest Receivable, \$120C. debit Notes Receivable, \$6,060 credit Accounts Receivable, \$6,060D. debit Accounts Receivable, \$6,120 credit Notes Receivable, \$6,000Credit Interest Revenue, \$120

Option (B) is correct.

Explanation:

On November 21,

Note amount = \$6,000

Period = 60-day

Interest rate = 12%

When Note is not paid by the market at maturity, then

The Accounts Receivable Account is debited with the Par Value of Note plus interest income and credited Notes Receivables \$6,000 and Credit Interest Revenue \$120.

Therefore, the journal entry is as follows:

Accounts Receivable A/c Dr. \$6,120

To Notes Receivables \$6,000

To Interest Revenue \$120

(To record the note)

. The dividend on Simple Motors common stock will be \$3 in 1 year, \$4.25 in 2 years, and \$6.00 in 3 years. You can sell the stock for \$100 in 3 years. If you require a 12% return on your investment, how much would you be willing to pay for a share of this stock today?

P₀ = \$ 81.51

Explanation:

given,

common stock = \$3 in 1 year, \$4.25 in 2 years, and \$6.00 in 3 years.

require rate of return = 12%

Amount payable = ?

Price

P₀ = \$ 81.51

The investment would be equal to P₀ = \$ 81.51

Zhang Industries budgets production of 300 units in June and 310 units in July. Each finished unit requires 4 pounds of raw material K, which costs \$5 per pound. Each month's ending inventory of raw materials should be 30% of the following month's budgeted production. The June 1 raw materials inventory has 360 pounds of raw material K. Compute budgeted purchases for raw material K for June. 880 lbs

1,200 lbs

1,220 lbs

1,240 lbs

1,212 lbs.

Option (E) is correct.

Explanation:

Production require in pounds = Budgets production in June × pounds of raw material K requires

= 300 units × 4

= 1200

Total production require in pound:

= Production require in pounds + Ending inventory × pounds of raw material K requires

= 1200 + (30% × 310 units) × 4

= 1200 + 93 × 4

= 1200 + 372

= 1,572

Budgeted purchases for raw material K for June:

= Total production require in pound - Beginning balance

= 1,572 - 360

= 1,212

Analyzing and Interpreting the Inventory Turnover Ratio Dell Inc. is the leading manufacturer of personal computers. In a recent year, it reported the following in dollars in millions: Net sales revenue \$ 78,660 Cost of sales 58,606 Beginning inventory 2,538 Ending inventory 2,678 Source: Dell Inc. Required: 1. Determine the inventory turnover ratio and average days to sell inventory for the current year. 2. Explain the meaning of each number.

1. Inventory turnover ratio = 22.47 and Average days to sell the inventory = 16 days

Explanation:

2. Inventory Turnover Ratio indicates how quickly an entity completes its inventory cycle i.e. sell its inventory. In the given scenario, Dell Inc. is able to sell its inventory 22.47 times during the year.

The inventory turnover ratio is calculated by dividing the cost of goods sold with the average inventory held during the year

Hence, average number of days to sell the inventory is 16 days which shows that Dell Inc. is able to sell its inventory in 16 days

(Video) On January 1, Crane Corporation had 95,500 shares of no-par common stock issued and outstanding

It should be taken into consideration that this ratio should be compared with the industry benchmark since the inventory holding period varies significantly from one industry to another

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