Answer:
$340,000
Explanation:
The computation of the net income under variable costing is shown below;
Sales (50000 × $20) $1,000,000
Less: Variable costs of production;
Units produced (70000 × $10) $700,000
Cost of goods available for sale $700,000
Less: Ending inventory (20000 × $10) ($200,000)
Cost of goods sold ($500,000)
Gross contribution margin $500,000
Less: Variable selling expenses (50000 × $3) ($150000)
Contribution margin $350,000
Less: Fixed overhead ($10,000)
Net income $340,000
Answer:
Net Income = $340000
Explanation:
Given the total unit produced = 70000
Number of units sold = 50000
Selling price = $20
Variable cost of production = $10
Variable selling expense = $3
Fixed overhead = $10000
Net Income = (50000 x 20) - (50000 x 10) - (50000 x 3) - 10000
Net Income = $340000
____________is a marketing tool that is often not a directly paid for medium and is used to influence, inform and persuade the consumer to purchase a product g.
Answer:
Public relations.
Explanation:
Marketing can be defined as the process of developing promotional techniques and sales strategies by a firm, so as to enhance the availability of goods and services to meet the needs of the end users or consumers through advertising and market research. Thus, it comprises of all the activities such as, identifying, anticipating set of medium and processes for creating, promoting, delivering, and exchanging goods and services that has value for customers. It typically, involves understanding customer needs, building and maintaining healthy relationships with them in order to scale up your business.
Public relations involves the process of professionally maintaining and sustaining a favourable public perception and image by an organization or an elite.
It is a strategic communication process used by PR managers to issue and disseminate quality informations between their principal (usually an individual) or an organization and the public, in order to build a mutualistic relationship and boost their level of sales.
Public relations is a marketing tool that combine news covered by the media which are often not a directly paid for medium and is typically used to influence, inform and persuade the consumer to purchase a product.
Juanita is the sole shareholder of Belize Corporation (a calendar-year S corporation). She is considering revoking the S election. It is February 1, year 1. What options does Juanita have for timing the effective date of the S election revocation
Answer:
January 1 Year 2 would be an effective date.
Explanation:
Juanita have two ( 2 ) options and they are
Terminating the election after March 15th Terminating the Election at the beginning of the next Financial yearSince it is already February 1 Year 1 , The most effective date for the S election revocation would be January 1 year 2 ( calendar-year of S corporation ) .
Mike is planning to invest his savings in a savings account. He manages to deposit $1,000 at the end of the first year, $700 at the end of the second year, $1,500 at the end of the third year, and $600 at the end of the fourth year. If the account earns 7 percent interest each year, what is the terminal value of this uneven cash flow stream? (Round your answer to two decimal places.)
Answer:
$ 4,231.47
Explanation:
By terminal value, it means the value of savings deposit at the end of the fourth year bearing in mind the first deposit made at the end of year 1 would only earn interest in years 2,3 and 4 , the second deposit would interest in years 3 and 4 since it was made at the end of year 2 and so on .
Future value of deposits=deposit*(1+annual interest rate)^n
n is the number of years that the each deposit would earn interest
terminal value=$1,000*(1+7%)^3+$700*(1+7%)^2+$1500*(1+7%)^1+$600*(1+7%)^0
terminal value=$ 4,231.47
why is eskom a monopoly?
Answer:
I don't know We will know that soon
Answer:
Eskom is South Africa's monopoly power supplier. As the result of the lack of productive and allocational inefficiency, Eskom is considered an undesirable monopoly market structure.
Explanation:
Productive efficiency takes place at a point in which the marginal cost is equal to the average cost and where the allotment efficiency is equal to the marginal cost.
The monopoly of Eskom also generates extravagant costs that reduce the output by higher prices.
Stout Corporation had net income of $200,000 and paid dividends to common stockholders of $40,000 in 2012. The weighted average number of shares outstanding in 2012 was 50,000 shares. Stout Corporation's common stock is selling for $75 per share on the New York Stock Exchange. Stout Corporation's price-earnings ratio is Group of answer choices 3.8 times. 15 times. 18.8 times. 12 times.
Answer:
18.8 times
Explanation:
Calculation to determine what Stout Corporation's price-earnings ratio is
Using this formula
Price-Earning Ratio = Price Per Share ÷ (Net Earnings ÷ Outstanding Shares)
Let plug in the formula
Price-Earning Ratio= $75 ÷ ($200,000 ÷ 50,000)
Price-Earning Ratio= 75 ÷ 4
Price-Earning Ratio= 18.75
Price-Earning Ratio=18.8 times (Approximately)
Therefore Stout Corporation's price-earnings ratio is 18.8 times
Your grandmother has promised to give you $5,000 when you graduate from college. She is expecting you to graduate two years from now. What happens to the present value of this gift if you delay your graduation by one year and graduate three years from now?
a. remains constant
b. increases
c. decreases
d. becomes negative
e. cannot be determined from the information provided
Answer:
c
Explanation:
Below is information from the financial statements of Greenwich Company: Accounts receivable (net) 2016: $2,400 Accounts receivable (net) 2015: $2,200 Net sales 2016: $25,875 What is the average collection period
Answer:
32.44 days
Explanation:
The computation of the average collection period is shown below:
But before that we have to determine the account receivable turnover ratio
So, the account receivable turnover ratio is
= (net sales) ÷ (average of account receivables)
= $25,875 ÷ ($2,400 + $2,200) ÷ 2
= $25,875 ÷ $2,300
= 11.25 times
Now the average collection period is
= Total no of days in a year ÷ account receivable turnover ratio
= 365 ÷ 11.25
= 32.44 days
We assume that the no of days that should be considered is 365 days
Transaction-processing systems _____.
a. involve low volumes of data
b. require maximum human involvement
c. require extensive managerial judgment
d. involve operations that are repetitive
Answer:
d. involve operations that are repetitive
Explanation:
Transaction-processing systems can be defined as a system used by businesses to process their daily transactions by collecting, storing, modifying and retrieving of related data (informations). It's commonly used by businesses that deals with e-commerce (online transactions) and as such involves a request by a customer, an acknowledgement by the company, an action in response to the request and an output to the customer.
Transaction-processing systems involve operations that are repetitive.
a. A fall in the price of donuts will cause a ________________ in the Supply Curve for donuts.
b. An increase in the price of flour will cause a _______________ in the Supply Curve for donuts.
c. An increase in the local number of donut shops will cause a __________ in the Supply Curve for donuts.
Answer:
movement down
leftward shift
rightward shift
Explanation:
True False All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound interest. Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest. All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year.
Answer:
All other variables held constant, investments paying simple interest have to pay significantly higher interest rates to earn the same amount of interest as an account earning compound interest. TRUE.
This is a true statement because compound interest is based on the previous balance in addition to the interest earnings on the balance. It therefore accrues on a higher balance than simple interest which builds on the same amount of principal throughout. Simple interest would therefore need a higher rate to bridge this gap.
Everything else held constant, an account that earns compound interest will grow more quickly than an otherwise identical account that earns simple interest. TRUE.
An account earning compound interest would increase faster than an identical one using simple interest because compound interest is based on an accrued balance whilst simple interest does not change the balance it is based on.
All other factors being equal, both the simple interest and the compound interest methods will accrue the same amount of earned interest by the end of the first year. TRUE.
At the end of the first year, an assuming yearly compounding, both simple and compound interest will yield the same result because they would be based on the same principal amount.
Explain whether each of the following statements is true or false.
The marginal rate of substitution (MRS) diminishes as an individual moves downward along the demand curve. Assume the statement refers to good X with price Upper P Subscript Upper X , where good X is measured on the horizontal axis of an indifference map and good Y is measured on the vertical axis.
Answer:
1. True
Explanation:
Marginal rate of substitution is quantity of good which a consumer will need to have in order to leave another good. The MRS equals to Px/Py. This will decrease when the demand curve decreases.
uppose the demand curve for a product is given by
Q = 10 - 2P + Ps
where P is the price of the product and Ps is the price of a substitute good. The price of the substitute good is $2.00.
a. Suppose P = $1.00. The price elasticity of demand is_____.
b. Suppose the price of the good, P, goes to $2.00. Now what is the price elasticity of demand? What is the cross-price elasticity of demand?
Answer:
A. 0.2
B. 0.5, 0.25
Explanation:
Q = 10-2p+2
We take like terms
Q= 10+2-2p
= 12-2p
A. If p = 1 dollar
12-2(1)
Q = 10
Price elasticity would be change in quantity divided by the change in price = -2
-2 x p/q
= -2x1/10
= 0.2
Price elasticity of demand is 0.2
B. P = 2 dollars
Q= 10-2x2+2
= 10-4+2
= 8
Price elasticity
= -2x2/8
= 0.5
Cross elasticity
= 1x2/8
= 0.25
Prepare the Statement of Retained Earnings from the Adjusted Trial Balance and Income Statement. Within each section of the statement, use the drop-down menus to enter the accounts in Chart of Accounts order and select the account balances. SMART TOUCH LEARNING SMART TOUCH LEARNING Adjusted Trial Balance December 31, 2016 Income Statement Month Ended December 31, 2016 Balance Debit Credit Revenue: Account Title Service Revenue 51,300 Cash 16,900 Accounts Receivable 9,300 Expenses: 2,200 Office Supplies 200 Depreciation Expense--Furniture Interest Expense 300 Prepaid Rent 11,200 3,300 Rent Expense Furniture 19,700 Salaries Expense 3,900 Accumulated Depreciation--Furniture 6,700 Accounts Payable 900 2,200 Supplies Expense Total Expenses 10,600 Salaries Payable 500 Net Income Interest Payable 40,700 300 Unearned Revenue 5,600
Notes Payable 7,900 Common Stock 11,000 Retained Earnings 11,200 Dividends 28,800 Service Revenue 51,300 Depreciation Expense-- Furniture 2,200 Interest Expense 300 Rent Expense 3,300 Salaries Expense 3,900 Retained Earnings, December 31, 2016 23,100 Supplies Expense 900 Total 96,700 96,700
Answer:
SMART TOUCH LEARNING
Statement of Retained Earnings
For the Month Ended, December 31, 2016
Particulars Amount
Retained earning Dec 1, 2016 $11,200
Add: Net Income $40,700
$51,900
Less: Dividend $28,800
Retained earning Dec 31, 2016 $23,100
Clay is a marketing student learning how to evaluate value propositions for effectiveness. He looked through ten different propositions and found them to all be ineffective. What elements did he mostly likely identify as the reasons for their ineffectiveness?
Answer: they were generic, and they had no unique value communicated
Explanation:
Value proposition refers to the promise
that's made by an organization to its customers indicating why a product should be bought.
Since Clay looked through ten different propositions and found them to all be ineffective, the reason attributed to this will be due to the fact that the propositions were generic, and had no unique value communicated.
During 2019, $27,000 of cash dividends were declared and paid. A patent valued at $80,000 was obtained in exchange for land. Equipment that originally cost $20,000 and had $7,000 accumulated depreciation was sold for $13,000 cash. Bonds payable were sold for cash and cash was used to pay for structural improvements to the building. Required a. Compute the change in cash that occurred during 2019. b. Prepare a statement of cash flows using the indirect method
Answer:
a. Change in Cash that occurred during 2019:
Cash outflow $27,000
Cash inflow = $13,000
Net outflow = $14,000
b. Statement of Cash Flows for the year ended December 31, 2019:
Investing activities:
Sale of Equipment $13,000
Financing activities:
Payment of dividends ($27,000)
Net cash outflow = $14,000
Explanation:
a) Data and Calculations:
Cash dividends paid during 2019 = $27,000
Patent purchased = $80,000
Land sold in exchange of patent = $80,000
Sale of equipment = $13,000
Sales of Bonds Payable = Cost of Building Improvements
The balance sheet of a partnership will:_________
a. report retained earnings below the partnership capital accounts.
b. show a separate capital account for each partner.
c. show a separate drawing account for each partner.
d. show the amount of income that was distributed to each partner.
Answer:
b. show a separate capital account for each partner.
Explanation:
A partnership can be defined as a type of business ownership in which two or more individuals come together to start up a business and share the profits made together.
Balance sheet refers to a document that contains financial information about assets, liability, and equity.
A current asset can be defined as all of the assets that are being owned by a company or business entity and are expected to be converted into their cash equivalent through sales or use within a period of one year of its date on the organization's balance sheet.
In Financial accounting, the balance sheet of a partnership is typically designed to show a separate capital account for each partner. Thus, if there are four or more people in a partnership form of business, each of them would have a separate capital account in the balance sheet of the partnership.
You have been pricing an MP3 player in several stores. Three stores have the identical price of $700. Each store charges 18 percent APR, has a 30-day grace period and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C uses the previous balance method. Assume you purchased the MP3 player on May 5 and made a $100 payment on June 15.
Answer:
I don't know.
Explanation:
Kumaran Pillay has a vegetable stall at the Suva Market. His business has been plagued with under-stocking and over-stocking problems for some time now. When he under-stocks, he loses sales as customers move to competing stalls. When he over-stocks, is left with unsold vegetables. These are perishable and cannot be kept long for later sales. Pillay is concerned with how he can minimize these losses stemming from under and over-stocking.
1. Identify and explain how he could use 3 qualitative forecasting methods to improve his stocking. Note that you will need to justify your proposals and link it to the business being discussed. (10 marks)
2. Identify and explain how he could use 2 quantitative forecasting methods to improve his stocking. Note that you will need to justify your proposals and link it to the business being discussed. (10 marks)
Answer:
1) Using the 3 qualitative forecasting methods
Executive opinions,
Delphi method,
Salesforce polling.
2) Using the 2 quantitative forecasting methods:-
The straight-line method,
The average approach.
Explanation:
1) Using the 3 qualitative forecasting methods
Executive opinions- In this method, he could seek subjective views from experts concerning his sales. this might be viewed on his purchasing, finance, and future sales. However, it's utilized in conjunction with other quantitative forecasting methods so as to realize the simplest forecasts.
Delphi method- He could question a gaggle of experts about their views individually. they are doing not meet to avoid manipulation in judgments. Forecasts during this case might be compiled and analyzed by an external observer and returned to the experts for further questioning.
Salesforce polling- he could use this approach whereby he reaches bent people that are in touch with the regular customers and who can correctly predict the trends of the customers' consumption so as to offer him insights on how and when to restock counting on demand. This method is sweet for future forecasting since it gives the expected consumption trends of the purchasers that would be employed by the owner to make a decision on the quantity of inventory to stock in the future.
2) Using the 2 quantitative forecasting methods:-
The straight-line method- This is the only method of calculating future sales supported past data. It involves the utilization of a straight-line equation this measures the expansion or future predictions in sort of percentages. Here, past data is collected and a few analysis is completed to work out the trend that customers might adopt in their subsequent purchases. once they're known, the forecast on increasing or decreasing the inventory is predicated on percentage increase or reduction respectively. for instance, once demand is forecasted to grow, the vendor will decide the share they might order to hide the rise in demand.
The average approach- Here, the owner of a business conducts a mean of the past sales they need to be made to customers over a selected period. the most assumption is that the longer-term forecast is that the average of the past data. Since the owner has been making overstocking and understocking methods, it's assumed that the type of the orders is adequate to the longer-term forecast. for instance, if the owner decided within the past to order 100 units of a specific product and therefore the customers demanded quite 100 units maybe 150 units, there's an understocking decision. The owner might plan to increase subsequent stock to 200 units and at this point, the purchasers only demand 175 units making him to possess more stock than it had been required. On learning this concerning the market, the owner then decides to conduct a mean and order 150 units to require care of the overstocking and under-stocking problems.
What payment method is this? Draw the payment process and explain the steps in the payment process.
Sales contract No: 053TTCB07
Seller:A&T Co., Ltd. Add: 258 Bis Le Dai Hanh Street, District 1, HCM City.
Account number: 2173357 – Vietcombank – Saigon Branch (Swift code: BFTVVNVX023)
Buyer: Pelco Co., Ltd. Add: 350 Pelcogate, Clovis, NYC
Account number: 4945020923 – Wells Fargo Bank – NYC Branch (FNBPUS3NNYC)
Payment article: Payment by TT 50% 30 days after B/L date.
PLEASE HELP ME
Answer:
I don't understand this question
Explanation:
what is this supposed to be?
define foreign employment promotion board
Answer:
Kindly check explanation
Explanation:
The key word. Foreign employment could be explained as jobs offered in a country to nationals of another country. This is called foreign employment. The foreign employment promotion board as part of its responsibility is charged with the enhancement of international relation and between countries. Furthermore, the board handles the generation of foreign employment welfare fund. If a country has a good and functioning Foreign Employment promotion board, such country will likely enjoy good international trade between countries as they often take note of international trade opportunities and tap into it.
Cash outflows can be categorized into all of the following groups except: Multiple Choice opportunity costs associated with selecting a specific capital project. outflows associated with the initial investment. working capital commitments.
Answer:
opportunity costs associated with selecting a specific capital project.
Explanation:
The cash outflows should be classified in various kind of groups like the outflows that attached with the initial investment, commitment related to the working capital, also at the same time it increased the operating expense but does not considered the opportunity cost along with the capital project as the outflow of cash means the payment is to be done in cash but the opportunity cost is the cost that provides the benefit over the another choice
So the above statement should be the answer
Jane is a very intelligent graduate of FIN 3601. As such, she knows she should will start contributing into her company's retirement plan. She decides to allocate $250 at the end of each month into her 401(k). However, her company offers a fairly generous matching program. For every dollar that Jane saves in her 401(k), her firm will add $0.50 to her account. If she is employed by this firm for 30 years and earns an average of 10.50% on her retirement savings per year, how much will Jane have in her retirement account 30 years from now? Report your answer rounded to two decimal places.
Answer:
The amount that Jane will have in her retirement account 30 years from now is $943,650.37.
Explanation:
Jane’s monthly savings = $250
Amount added monthly by Jane’s firm = Jane’s monthly savings * Amount added by Jane’s firm for every dollar = $250 * $0.50 = $125
Total monthly savings to Jane’s 401(k) = Jane’s monthly savings + Amount added monthly by Jane’s firm = $250 + 125 = $375
Since Jane decides to allocate $250 at the end of each month into her 401(k), this implies the relevant formula to use to calculate the amount Jane will have in her retirement account 30 years from now is the formula for calculating the Future Value (FV) of an Ordinary Annuity as follows:
FV = M * (((1 + r)^n - 1) / r) ................................. (1)
Where,
FV = Future value or the amount that Jane will have in her retirement account 30 years from now = ?
M = Total monthly savings to Jane’s 401(k) = $375
r = Average monthly interest rate = Average annual interest rate / 12 = 10.50% / 12 = 0.1050 / 12 = 0.00875
n = number of months = number of years * number of months in a year = 30 * 12 = 360
Substituting the values into equation (1), we have:
FV = $375 * (((1 +0.00875r)^360 - 1) / 0.00875) = $375 * 2,516.40 = $943,650.37
Therefore, the amount that Jane will have in her retirement account 30 years from now is $943,650.37.
Current interest rates are 8%. You want to buy a long-term bond with a face value of $1000 that pays a coupon rate of 10%. Which of the following prices is feasible?
a. $888.88
b. $1,000.00
c. $1,111.11
d. Not enough information to answer.
e. None of the above is feasible.
Answer: c. $1,111.11
Explanation:
When a bond's coupon rate is higher than the prevailing interest rate, the bond will be more sought after because it is paying more than the market is paying. As a result, the price of the bond will be higher than its par value to reflect the increased demand for it.
In other words, when a bond coupon rate is higher than the interest rate, the price will be higher than par. This is the case here so the bond will be selling at a higher price than $1,000 and the only option higher than $1,000 is option c at $1,111.11.
1.6 Read the scenario below and answer the questions that follow:
Pearl inherited hudred thousand rands from her late uncle. She choose an investment which is managed by a fund manager who buys shares on the stock exchange/JSE
1.6.1 Name the form of investment chosen by Pearl.
1.6.2 Discuss the disadvantages of the form of investment mentioned in QUESTION 1.6.1
Answer:
1.6.1 unit trusts
1.6.2 -share price may fluctuate
-unit trusts are not allowed to borrow,
therefore reducing potential returns
-not good for people who want to invest for
a short period.
-Not good for people who want avoid risks at
all costs
The problem of determining what goods and services society should produce: would not exist if government owned all of the resources. exists because we can produce more than we need or want. exists because there are not enough resources to provide all of the goods and services that people want. would not exist if all goods and services were scarce.
Answer:
exists because there are not enough resources to provide all of the goods and services that people want.
Explanation:
Factors of production can be defined as the fundamental building blocks used by individuals or business firms for the manufacturing of finished goods and services in order to meet the unending needs and requirements of their customers.
The four factors of production are;
I. Land: this refers to the natural resources and raw materials extracted from the ground or grown in the soil e.g oil, gold, rubber, cocoa, etc.
II. Labor (working): this is the human capital or workers who are saddled with the responsibility of overseeing and managing all the aspects of production.
III. Capital resources: it includes the physical assets used for production of goods and services such as equipment, money, plant, etc.
IV. Entrepreneurship: it is intellectual capacity required to drive a business and the skills to develop an idea into a money making venture (business).
These four (4) factors of production when combined effectively and efficiently are used for the manufacturing or production of goods and services that meets the unending requirements or needs of the consumers.
However, the problem of determining what goods and services society should produce in order to meet the unending requirements or needs (demands) of consumers, exists because there are not enough resources such as the factors of production to provide all of the goods and services that consumers want.
A company wants to generate a forecast for unit demand for year 2018 using exponential smoothing. The actual demand in year 2017 was 120. The forecast demand in year 2017 was 110. Using this data and a smoothing constant alpha of 0.1, which of the following is the resulting year 2018 forecast value?
a. 110
b. 114
c. 120
d. 111
e. 100
Answer:
d. 111
Explanation:
Calculation to determine which of the following is the resulting year 2018 forecast value
Using this formula
2018 Forecast value = Ft= Ft - 1+ (At - 1- Ft - 1)
Let plug in the formula
2018 Forecast value = 110 + 0.1 (120 - 110)
2018 Forecast value=110+0.1(10)
2018 Forecast value=110+1
2018 Forecast value= 111
Therefore the resulting year 2018 forecast value
will be 111
Astair, Inc. reported sales of $6,000,000 for the month and incurred variable expenses totaling $4,600,000 and fixed expenses totaling $940,000. The company has no beginning or ending inventories. A total of 70,000 units were produced and sold last month. How many units would the company have to sell to achieve a desired profit of $620,000
Answer:
Break-even point in units= 78,000
Explanation:
Giving the following information:
Fixed cost= $940,000
Total contribution margin= (6,000,000 - 4,600,000)= $1,400,000
Unitary contribution margin= 1,400,000 / 70,000= $20
Desired profit= $620,000
To calculate the number of units to be sold, we need to use the following formula:
Break-even point in units= (fixed costs + desired profit) / contribution margin per unit
Break-even point in units= (940,000 + 620,000) / 20
Break-even point in units= 78,000
You have $267,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 14.2 percent, and Stock L, with an expected return of 11.8 percent.
Required:
If your goal is to create a portfolio with an expected return of 12.85 percent, how much money will you invest in Stock H and in Stock L? (Do not round intermediate calculations. Round your answers to 2 decimal places (e.g., 32.16).)
Investment in Stock H $ _________________
Investment in Stock L $ _________________
Answer and Explanation:
The computation of the money invested in stock H and stock L is given below;
Given that
H expected return is 14.2%
and l expected return is 11.8%
and,
portfolio return is 12.85%
Now if we assume that
if h investment portion is X and l investment portion is 1-X
So,
12.85= X × 14.2 +(1 - X) × 11.8
= 14.2X+11.8-11.8X
1.05= 2.4X
X= 43.75%
So investment portion of l is 56.25%
Finally
h investment = 267,000 × 43.75%
= $116,812.5 0
And,
l investment = 267,000 × 56.25%
= $150187.50
Say that investment increases by $60 for each interest rate drop of 1 percent. Say also that the expenditures multiplier is 4. If the money multiplier is 5, and each 5-unit change in the money supply changes the interest rate by 1 percent, what open market policy would you recommend to increase income by $240
The following information is available for the Johnson Corporation:
Beginning inventory $27,000
Inventory purchases (on account) 157,000
Merchandise purchases (on account) 157,000
Freight charges on purchases (paid in cash) 12,000
Merchandise returned to supplier (for credit) 14,000
Ending inventory 32,000
Sales (on account) 252,000
Cost of merchandise sold 150,000
Required:
Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.
Answer:
Perpetual Inventory System:
1) Dr Inventory 157,000
Cr Accounts Payable 157,000
2) Dr Inventory 12,000
Cr Cash 12,000
3)Dr Accounts Payable 14,000
Cr Inventory 14,000
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
5) Dr Cost of Goods Sold 150,000
Cr Inventory 150,000
6) No entry
Periodic Inventory System:
1)Dr Purchases 157,000
Cr Accounts Payable 157,000
2) Dr Freight - in 12,000
Cr Cash 12,000
3) Dr Accounts Payable 14,000
Cr Purchase Returns 14,000
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
5) No entry
6) Dr Cost of Goods Sold 150,000
Dr Ending Inventory 32,000
Dr Purchase Returns 14,000
Cr Beginning Inventory $27,000
Cr Purchases 157,000
Cr Freight - in $12,000
Explanation:
Preparation of the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.
PERPETUAL INVENTORY SYSTEM:
1) Dr Inventory 157,000
Cr Accounts Payable 157,000
(To record the purchase of inventory on account)
2) Dr Inventory 12,000
Cr Cash 12,000
(To record the payment of freight charges by cash)
3)Dr Accounts Payable 14,000
Cr Inventory 14,000
(To record the return of inventory purchased on account)
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
(To record the sales made on account)
5) Dr Cost of Goods Sold 150,000
Cr Inventory 150,000
(To record the cost of goods sold)
6) No entry
PERIODIC INVENTORY SYSTEM:
1)Dr Purchases 157,000
Cr Accounts Payable 157,000
(To record the purchase of inventory on account)
2) Dr Freight - in 12,000
Cr Cash 12,000
(To record the payment of freight charges by cash)
3) Dr Accounts Payable 14,000
Cr Purchase Returns 14,000
(To record the return of inventory purchased on account)
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
(To record the sales made on account)
5) No entry
6) Dr Cost of Goods Sold 150,000
Dr Ending Inventory 32,000
Dr Purchase Returns 14,000
Cr Beginning Inventory $27,000
Cr Purchases 157,000
Cr Freight - in $12,000
(To record the adjusting entry for inventory)