A rumor of​ "right sizing" at​ Ojai's engineering firm has him and his​ wife, Kaya, concerned about their preparation for meeting financial emergencies. Help them calculate their net worth or complete Worksheet​ 4, and calculate and interpret the current​ ratio, given the following assets and​ liabilities:Checking account ………………… $2,000Savings account ………………….. $4,000
Stocks ……………………………. $8,000
Utility bills ………………………. $500
Credit card bills …………………. $1,000
Auto loan ……………………….. $2,600

Answer:

January 1, Year 1    Cash                                         $56017.5 Dr

                                Discount on Bonds Payable   $1732.5 Dr

                                        Bonds Payable                         $57750 Cr

Explanation:

The value of bonds which are issued at par is denoted by 100. If the bonds are issued at anything above 100 denomination, this means that the bonds are issued at a premium and if the denoted figure is less than 100, like in this question it is 97, the bonds are issued at a discount.

The cash received on the issuance of this bond will be 97% of the face value of the bond and the 3% will be the discount on the issuance of these bonds.

Thus, the cash received is = 57750 * 97% = $56017.5

The discount on Bonds Payable = 57750 - 56017.5 = $1732.5

The journal entry to record the bond issuance and the receipt of cash would be:

Date                 Account title                             Debit              Credit

Year 1              Cash                                         $56,017.5

                        Discount on Bonds Payable   $1, 732.5 Dr

                        Bonds Payable                                                $57, 750 Cr

How to make the journal entry?

Since the bonds were issued at 97, this means they were issued at a discount. The discount on bonds payable is the difference between the face value and the issue price.

Issue Price = $57,750 x 97%

= $56,017.50

Bond Discount = $57,750 - $56,017.50

= $1,732.50

The journal entry to record the issuance of the bonds on January 1, Year 1, would include:

Debit Cash for the amount received ($56,017.50).

Debit Discount on Bonds Payable for the discount amount ($1,732.50).

Credit Bonds Payable for the face value of the bonds ($57,750).

This entry reflects the receipt of cash and the creation of a liability for the face value of the bonds. The discount account represents the additional interest expense that will be recognized over the life of the bonds.

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If Louvers, Inc., accepted a $15,000, 180-day, 10 percent note from a customer on May 31. The necessary June 30 adjusting entry for Louvers will be:

Debit Interest receivable  $125

Credit Interest revenue $125

Louvers, Inc. Adjusting Journal entry

Debit Interest receivable  $125

Credit Interest revenue $125

($15,000 × 10% × 30/360)

(To record interest receivable)

The Interest amount  of $125 calculated as ($15,000 × 10% × 30/360) is due at maturity. Between May 31 and June30, a total of 30 days passed.

Inconclusion the necessary June 30 adjusting entry for Louvers will be:

Debit Interest receivable  $125

Credit Interest revenue $125

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Answer:

Interest receivable

       To Interest revenue

(Being the interest receivable is recorded)

Explanation:

The adjusting entry is as follows

Interest receivable

       To Interest revenue

(Being the interest receivable is recorded)

The computation is shown below:

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

= $15,000 × 10% × (30 days ÷ 360 days)

= $125

The 30 days is calculated from May 31 to June 30

Answer:

Jan.2

Dr Cash                      11,700

Cr Owner Equity       11,700

( to record owner's capital contribution to the business under the form of cash)

Jan.3

Dr Vehicles          3,510

Cr Cash               3,510

( to record the purchase of used car in cash)

Jan.9

Dr Supplies                  585

Cr Account Payable   585

(to record supplies purchase on account)

Jan.11

Dr Account Receivable          2,808

Cr Revenue                            2,808

( to record revenue earned in credit)

Jan.16

Dr Advertising expenses           410

Cr Cash                                      410

( to record advertising expenses paid in cash)

Jan.20

Dr Cash                              819

Cr Account Receivable    819

( to record the partial collection of receivables)

Jan.23

Dr Account Payable        351

Cr Cash                           351

( to record payment to creditor)

Jan.28

Dr Owner Equity              1,170

Cr Cash                           1,170

(to record owner's withdraw of capital in form of cash)

Explanation:

Answer:

No journal entry is required

Explanation:

In the case of Direct write-off method, for recording the estimating future debts, no journal entry is required as in this method only bad debt expense is recorded which is shown  below:

Bad debt expense A/c Dr XXXXX

              To Account receivable A/c XXXXX

(Being the bad debt expense is recorded)

So, no journal entry is required for estimated amount or Allowance for doubtful Accounts

Answer:

The weighted-average unit contribution margin is $33.49 per unit

Explanation:

We know that,

Weighted average Contribution margin per unit = (Selling price per unit - Variable expense per unit) × sales mix

For A12 = ($55 - $40) × 55% = $8.25

For B22 = ($107- $79) × 29% = $8.12

For C124 = ($414 - $307) × 16% = $17.12

So, the total would be equal to

= $8.25 + $8.12 + $17.12

= $33.49 per unit

Answer:

Operating Activity

Explanation:

The Indirect method, reconciles the Operating Profit to the Operating Cash Flow by adjusting the following items (1) Non Cash flow items previously added or deducted from Operating Profit and (2) Changes in Working Capital items.

Amortization of bond premium is an item of non-cash flow that was previously deducted from Operating Profit and needs to be added back.