BUSINESS COLLEGE

A company’s past experience indicates that 60% of its credit sales are collected in the month of sale, 30% in the next month, and 5% in the second month after the sale; the remainder is never collected. Budgeted credit sales were: Ch7_Q181 The cash inflow in the month of June is expected to be $282,500. $213,750. $225,000. $270,000.

Answers

Answer 1

Answer:

Answer:

$213,250

Explanation:

The calculation of cash inflow is shown below:-

Expected cash collections

For the month of June

Months Sales Percentage Expected collections

April $282,500 5% $14,125

May $213,750 30% $64,125

June $225,000 60% $135,000

Total collection in the month of June $213,250

Here we assume Sales for April$282,500, May $213,750 and June $225,000.

Please ignore the last value as it is not relevant to the question

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Which financial statement matches asset increases from operating a business with asset decreases from operating the business?Statement of changes in equity.Balance sheet.Statement of cash flows.Income statement.

Answers

Answer:

Income statement

Explanation:

Statement of change in equity: It records beginning balance of equity, ending balance of equity, net income or loss, dividend paid if any.

Balance sheet: It records the assets and the liabilities side of the balance sheet which equals to

Total assets = Total liabilities + Stockholder equity

Statement of cash flows: It records three types of activities:

1. Operating activities: It includes those transactions which affect the working capital, and it records transactions of cash receipts and cash payments.

2. Investing activities: It records those activities which include purchase and sale of the fixed assets

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance.

Income statement: It records all income and expenses of a particular period.

In the given question, the increase in assets records under the revenue part whereas if the asset decreases, it records under expenses part of the income statement.

Dextra Computing sells merchandise for $6,000 cash on September 30 (cost of merchandise is $3,900). Dextra collects 5% sales tax. 1. Record the entry for the $6,000 sale and its sales tax.
2. Record the entry that shows Dextra sending the sales tax on this sale to the government on October 15.
3. Record the cost of Sept. 30th sales.
4. Record the entry that shows the remittance of the 5% tax on this sale to the state government on October 15.
5. Record the cash sales and 3% sales tax.

Answers

Answer:

Sept - 30

DR Cash $6,300

CR Sales $6,000

CR Sales Tax $300

(To record Cash sales and Tax Payable)

Working

Sales Tax = 6,000 * 5%

= $300

Oct - 15

DR Sales Tax Payable $300

CR Cash $300

(To record remittance of Sales Tax to the State Government)

Sept - 30

DR Cost of Goods Sold $3,900

CR Merchandise Inventory $3,900

(To transfer inventory to Cost of Goods sold)

4. Repeat question for question 2.

5. Repeat question for question 1.

1. Dr. Cash $6300

Cr. Sales $6000

Cr. Sales tax $300

(Being the cash sales and tax payable recorded.)

2. Oct 15

Dr. Sales Tax Payable $300

Cr. Cash $300

(Being remittance of Sales Tax to the State Government is recorded)

Sept. 30

Dr. Cost of Goods Sold $3,900

Cr. Merchandise Inventory $3,900

(Being transfer of inventory to Cost of Goods sold is recorded)

To know more about sales tax here:

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A $20,000 municipal bond is offered for sale at $18,000. The bond interest rate is 6 percent per year payable semiannually. The bond will mature and be redeemed at face value 5 years from now. If you purchase the bond, the first premium you will receive is 6 months from today. You have decided that you will invest $18,000 in the bond if your effective semi-annual yield is at least 4 percent. What effective semi-annual rate will this investment yield?

Answers

Answer:

For this calculation we need to use the Effective Annual Yield Formula.

EY = (1 + r/n)^n - 1

Where:

EY = Effective annual yield
r = coupon rate
n = number o periods the coupon rate is compounded per year

Plugging the amounts into the formula we obtain:

EY = (1 + 0.06/2)^2 - 1

EY = 0.062

EY = 6.2%

To obtain the effective semi-annual yield, we simply divide the effective annual yield by two:

= 0.062/2

=0.031

Effective semi-annual yield = 3.1%

In this case, we would not invest in the bond because the effective semi-annual yield does not reach the required 4%.

Explanation:

Hagar Corporation has municipal bonds classified as a held-to-maturity at December 31, 2017. These bonds have a par value of $800,000, an amortized cost of $800,000, and a fair value of $720,000. The company believes that impairment accounting is now appropriate for these bonds.Required:
Prepare the journal entry to recognize the impairment.

Answers

Explanation:

The journal entries are as follows

On December 31,2017

Loss on impairment Dr $80,000

To Debt investment - available for sale $80,000

(Being the loss on impairment is recorded)

It is computed below:

= $800,000 - $720,000

= $80,000

On December 31, 2017

Fair value adjustment- available for sale Dr $80,000

To Unrealized holding gain or loss - equity $80,000

(Being the fair value adjustment is recorded)

Answer:

Dr Allowance for Doubtful Accounts $80,000

Cr Debt Investments 80,000

Explanation:

Impairment = Cost - Fair Value = 800,000 - 720,000 = 80,000

Companies should use the CECL model to record the impairment of debt investments similar to receivables.

In evaluating the securities, Hagar now determines that it is probable that it will not collect all amounts due. In this case, it records a debit to allowance for doubtful accounts. Hagar includes this amount in income and records the impairment as shown above.

The following cost data relate to the manufacturing activities of Chang Company during the just completed year: Manufacturing overhead costs incurred: Indirect materials $ 17,000 Indirect labor 150,000 Property taxes, factory 10,000 Utilities, factory 90,000 Depreciation, factory 147,000 Insurance, factory 12,000 Total actual manufacturing overhead costs incurred $ 426,000 Other costs incurred: Purchases of raw materials (both direct and indirect) $ 420,000 Direct labor cost $ 80,000 Inventories: Raw materials, beginning $ 22,000 Raw materials, ending $ 32,000 Work in process, beginning $ 42,000 Work in process, ending $ 72,000 The company uses a predetermined overhead rate of $20 per machine-hour to apply overhead cost to jobs. A total of 21,700 machine-hours were used during the year. Required: 1. Compute the amount of underapplied or overapplied overhead cost for the year. 2. Prepare a schedule of cost of goods manufactured for the year.

Answers

Answer:

Part 1

under-applied overheads = $8,000

Part 2

Schedule of cost of goods manufactured for the year.

Opening Work in process $ 42,000

Add Direct Materials $393,000

Add Direct Labor $ 80,000

Add Applied Overheads $434,000

Less Ending Work In Process ( $ 72,000)

Cost of Goods Manufactured $877,000

Explanation:

The amount of underapplied or overapplied overhead cost for the year.

Applied Overheads = Predetermined overheads rate x Actual machine hours

= $20 x 21,700 machine-hours

= $434,000

Since,

actual manufacturing overhead costs = $ 426,000

and

applied manufacturing overhead = $434,000

then

under-applied overheads = $8,000 ($434,000 - $ 426,000)

Schedule of cost of goods manufactured for the year.

Opening Work in process $ 42,000

Add Direct Materials ($ 22 + $ 420 - $ 32 - $ 17) $393,000

Add Direct Labor $ 80,000

Add Applied Overheads $434,000

Less Ending Work In Process ( $ 72,000)

Cost of Goods Manufactured $877,000

Tri Fecta, a partnership, had revenues of $378,000 in its first year of operations. The partnership has not collected on $47,000 of its sales and still owes $38,700 on $235,000 of merchandise it purchased. There was no inventory on hand at the end of the year. The partnership paid $28,100 in salaries. The partners invested $47,000 in the business and $26,000 was borrowed on a five-year note. The partnership paid $2,600 in interest that was the amount owed for the year and paid $8,900 for a two-year insurance policy on the first day of business. Ignore income taxes. Compute the cash balance at the end of the first year for Tri Fecta.a) $332,110.b) $161,640.c) $166,290.d) $155,440.