BUSINESS COLLEGE

E18-20 (LO3) (Sales with Returns) Organic Growth Company is presently testing a number of new agricultural seeds that it has recently harvested. To stimulate interest, it has decided to grant to five of its largest customers the unconditional right of return to these products if not fully satisfied. The right of return extends for 4 months. Organic Growth estimates returns of 20%. Organic Growth sells these seeds on account for $1,500,000 (cost $750,000) on January 2, 2017. Customers are required to pay the full amount due by March 15, 2017.Prepare the journal entry for Organic Growth at January 2, 2017.

Answers

Answer 1

Answer:

Answer:

Debit: Accounts receivable with 1,500,000

Sales account with 1,500,000

Explanation:

Journal entry for Organic Growth at January 2, 2017 will appear in the book as follows:

Details DR ($) CR ($)

Accounts receivable 1,500,000

Sales account 1,500,000

Being the sales of Organic Growth on credit

Related Questions

Nash Co. sells $435,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Nash buys back $130,500 worth of bonds for $136,500 (includes accrued interest). Give entries through December 1, 2022. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end.
The United States taxes the domestic and remitted foreign earnings of U.S. based MNEs no matter where the earnings occurred. This is an example of a/an ________ approach to levying taxes.
) A homeowner is considering putting solar panels on the roof of his house. The installed cost of putting 3 kW of solar panels is $6000 and the panels come with a 25 year guarantee. The panels would be able to meet the average monthly electrical consumption of 850 kW-hrs for the house. a) If the homeowner has the $6000 available for the project, what would the cost of electricity from the power company need to be greater than ($/kW-hr) to make the project viable if other investments are providing 8% interest. ($0.0545/kW-hr) b) If the homeowner had to borrow the $6000 from the bank at 5% interest for 10 years (monthly payments) what would the cost of electricity need to be greater than in $/kWhr from the power company to make the project viable if other investments are providing 8% interest. ($0.0476/kW-hr)
The following information is available regarding the total manufacturing overhead of Olsen Company for a recent four-month period. Machine Hours Mfg. Overhead April 90,000 $ 170,000 May 80,000 $ 153,000 June 110,000 $ 198,000 July 95,000 $ 181,000 Using the high-low method, compute the fixed element of Olsen's
During 2016, Ayayai Corporation spent $144,000 in research and development costs. As a result, a new product called the New Age Piano was patented. The patent was obtained on October 1, 2016, and had a legal life of 20 years and a useful life of 10 years. Legal costs of $17,400 related to the patent were incurred as of October 1, 2016. Prepare all journal entries required in 2016 and 2017 as a result of the transactions above. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Companies generate income from their "regular" operations and from other sources like interest earned on the securities they hold, which is called non-operating income. Lindley Textiles recently reported $12,500 of sales, $7,250 of operating costs other than depreciation, and $1,000 of depreciation. The company had no amortization charges and no non-operating income. It had $8,000 of bonds outstanding that carry a 7.5% interest rate, and its federal-plus-state income tax rate was 40%. How much was Lindley's operating income, or EBIT?

Answers

Answer:

$4,250

Explanation:

The computation of the operating income or EBIT is shown below:

Earning before interest and taxes = Sales reported - operating cost other than depreciation - depreciation expense

= $12,500 - $7,250 - $1,000

= $4,250

We simply deduct the operating cost and the depreciation expense from the sales reported to arrive the earning before interest and taxes

All other information which is given in the question is not relevant. hence, ignored it

Prepare financial statements from an adjusted trial balance (LO3-5) [The following information applies to the questions displayed below.] The December 31, 2021, adjusted trial balance for Fightin' Blue Hens Corporation is presented below.
Accounts Debit Credit
Cash $ 11,200
Accounts Receivable 142,000
Prepaid Rent 5,200
Supplies 26,000
Equipment 320,000
Accumulated Depreciation $ 127,000
Accounts Payable 11,200
Salaries Payable 10,200
Interest Payable 4,200
Notes Payable (due in two years) 32,000
Common Stock 220,000
Retained Earnings 52,000
Service Revenue 420,000
Salaries Expense 320,000
Rent Expense 16,000
Depreciation Expense 32,000
Interest Expense 4,200
Totals 847,800 876,600
Required:
Prepare an income statement for the year ended December 31, 2021.
FIGHTIN' BLUE HENS CORPORATION
Income Statement
For the Year Ended December 31, 2021
Expenses:
Total expenses

Answers

Answer:

Fightin' Blue Hens Corporation

Income Statement

For the year ended December 31, 2021

Service Revenue $420,000

Operating expenses:

Salaries Expense $320,000
Rent Expense $16,000
Depreciation Expense $32,000 ($368,000)

Operating income $52,000

Other revenues and expenses:

Interest Expense $4,200 ($4,200)

Net income before taxes $47,800

*The totals of the trial balance sheet were added incorrectly, they both debit and credit total $876,600.

Suppose you operate a coal power plant and is considering upgrading the flue gas desulphurisation (FGD) facility (or "scrubbers") to reduce sulphur dioxide emissions. A contractor says their new system will cost $5000 per year to operate. Calculate, to the nearest dollar, the present value of the operational costs for the next four years. Assume a discount rate of 2%.

Answers

Answer:

The present value is $19,039

Explanation:

The computation of the Present value is shown below

= Present value of all yearly cash inflows after applying discount factor

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,

rate is 2%

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.02^1 = 0.9804

For Year 2 = 1 ÷ 1.02^2 = 0.9612

For Year 3 = 1 ÷ 1.02^3 = 0.9423

For Year 4 = 1 ÷ 1.02^4 = 0.9238

So, the calculation of a Present value of all yearly cash inflows are shown below

= (Year 1 cash inflow × Present Factor of Year 1) + (Year 2 cash inflow × Present Factor of Year 2) + (Year 3 cash inflow × Present Factor of Year 3) + (Year 4 cash inflow × Present Factor of Year 4)

= ($5,000 × 0.9804) + ($5,000 × 0.9612) + ($5,000 × 0.9423) + ($5,000 × 0.9238)

= $4,901.96 + $4,805.84 + $4,711.61 + $4,619.23

= $19,039

We take the first four digits of the discount factor.

Given this project and the requirement that the number of resources working on a task cannot be less than the number assigned to the task, answer the following question. What is the least amount of time that the project can be completed and how many resources are required to complete the work?a. 16 days, 7 workers
b. 7 days, 5 workers
c. 5 days, 7 workers
d. 8 days, 3 workers

Answers

Answer: c. 5 days, 7 workers

Explanation: With the project requirements provided, and with the least of number of resources working on the task not less than the number of those assigned to the task.

The least amount of time for the project to complete would be approximately 5 days, and the resources needed to complete the task would be approximately 7 workers.

If your firm has a capital structer of 60% debt and 40% common equity with the debt having cost of 10% and the equity of 17% what is the firm weight average cost of capital

Answers

Answer:

12.8%

Explanation:

Data provided in the question:

Debt = 60% = 0.60

Equity = 40% = 0.40

Cost of debt, kd = 10% = 0.10

cost of equity, ke = 17% = 0.17

Now,

firm weight average cost of capital

= ( ke × weight of equity ) + ( kd × weight of debt )

on substituting the respective values, we get

= ( 0.17 × 0.40 ) + ( 0.10 × 0.60 )

= 0.068 + 0.06

= 0.128

= 0.128 × 100%

= 12.8%

E9-14 Computing and Interpreting the Fixed Asset Turnover Ratio from a Financial Analysts Perspective [LO 9-7] The following data were included in a recent Papaya Inc. annual report (in millions): 2013 2014 2015 2016 Net revenue $ 82,225 $ 120,119 $ 163,500 $ 167,910 Net property, plant, and equipment 4,960 9,380 15,620 17,000 Required: Compute Papaya's fixed asset turnover ratio for 2014, 2015, and 2016. (Do not round intermediate calculations. Round your answers to 1 decimal place.)