BUSINESS COLLEGE

Alpha Company sold goods to customers who used Under-the-Hill bank credit cards. Credit card sales on July 8, 2016 amounted to $12,000 and were subject to a 2.5% bank fee. Use this information to prepare the General Journal entry (without explanation) for July 8, 2016.

Answers

Answer 1
Answer:

Answer:

Explanation:

The journal entry for July 8, 2016 is shown below:

Bank A/c Dr                       $11,700

Commission fee A/c $300 ($12,000 × 2.5%)

        To Sales A/c                    $12,000

Since the sales is recorded at $12,000 which includes commission fee of $300 ($12,000 × 2.5%) , the remaining balance i.e $11,700 ($12,000 - $300) would be debited to the bank account.

Related Questions

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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%.
The types of decision making a consumer uses for a product does not necessarily remain constant. Why ?
Brandon Ramirez wants to set up a scholarship at his alma mater. He is willing to invest $320,000 in an account earning 11 percent. What will be the annual scholarship that can be given from this investment
Williams Company pays each of its two office employees each Friday at the rate of $240 per day for a five-day week that begins on Monday. If the monthly accounting period ends on Tuesday and the employees worked on both Monday and Tuesday, the month-end adjusting entry to record the salaries earned but unpaid is:

On July 23 of the current year, Dakota Mining Co. pays $6,165,600 for land estimated to contain 8,808,000 tons of recoverable ore. It installs machinery costing $1,849,680 that has a 10-year life and no salvage value and is capable of mining the ore deposit in eight years. The machinery is paid for on July 25, seven days before mining operations begin. The company removes and sells 488,500 tons of ore during its first five months of operations ending on December 31. Depreciation of the machinery is in proportion to the mine's depletion as the machinery will be abandoned after the ore is mined.Required:
Prepare entries to record the following:_______.
(a)To record the purchase of the land.
(b)To record the cost and installation of machinery.
(c) To record the first five months' depletion assuming the land has a net salvage value of zero after the ore is mined.
(d)To record the first five months' depreciation on the machinery.

Answers

Answer:

a) July 23, 202x, purchase of land parcel (for mining purposes)

Dr Land and ore deposits 6,165,600

    Cr Cash 6,165,600

b) July 25, 202x, purchase and installation of mining machinery

Dr Machinery 1,849,680

    Cr Cash 1,849,680

c) December 31, 202x, depleting expense of ore deposits

Dr Depleting expense 341,917

    Cr Accumulated depletion: land and ore deposits 341,917

depleting expense = ($6,165,600 / 8,808,000 tons) x 488,500 tons = $341,917

d) December 31, 202x, depreciation expense of machinery

Dr Depreciation expense 102,585

    Cr Accumulated depreciation: machinery 102,585

depreciation expense = ($1,849,680 / 8,808,000 tons) x 488,500 tons = $102,585

Assume the total cost of a college education will be $200,000 when your child enters college in 16 years. You presently have $73,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child’s college education?

Answers

Answer:

6.5017%

Explanation:

Given that,

Total cost of a college education when your child enters college in 16 years, Future value = $200,000

Amount today to invest, present value = $73,000

Time period = 16 years

Therefore,

Annual rate of interest:

FV=PV(1+r)^(t)

200,000=73,000(1+r)^(16)

r =((200,000)/(73,000))^{(1)/(16)}-1

r = 6.5017%

Therefore, the annual rate of interest you must earn on your investment to cover the cost of your child’s college education is 6.5017%.

Suppose that you are obtaining a personal loan from your uncle in the amount of $30,000 (now) to be repaid in three years to cover some of your college expenses. If your uncle usually earns 9% interest (annually) on his money, which is invested in various sources, what minimum lump-sum payment three years from now would make your uncle satisfied with his investment?

Answers

Answer:

$38,851 approx

Explanation:

As per the information provided in the question, the minimum annual rate of return would be at-least equal to the usual rate of return the investor (here uncle) earns. Here it is 9% per annum.

Anything earned below this rate of return will not satisfy the investor since this represents the minimum required rate of return.

A= P(1 + r)^(n)

Where A= Amount

           P= Principal

           r= Annual Rate Of Interest

           n= period of loan

Therefore, A= 30,000(1 + .09)^(3)

                  A= $38,850.87 or $38,851 approx.

Assume that demand for a service depends upon price and income, where the price elasticity of demand is Ep = –0.6 and income elasticity is Ey = 1.2. If price falls by 4% and income rises by 2%, the quantity demanded of the service will _____. (a)-falls by 2.4%
(b)-falls by 9.6%
(c)-not affected since the price change and income change will exactly offset one another.
(d)-increase by 6%
(e)-increase by 4.8%

Answers

Answer:

Increase by 4.8%

Explanation:

The 4% price reduction will cause an increase in demand by 2.4%.  

\Delta Q/Q=\epsilon_p*\Delta P/P=(-0.6)*(-0.04)=0.024

The 2% rise in income will cause an increase in demand by 2.4%

\Delta Q/Q=\epsilon_I*\Delta I/I=(1.2)*(0.02)=0.024

If we take into account both variations and add them, we have an increase in demand by 2.4%+2.4% = 4.8%

What is one course of action available in every decision making process?a. Respond in a way which will have only positive consequences
b. Respond in a way which will have no negative consequences
Choose to do nothing about the issue
d. None of the above
Please select the best answer from the choices provided
А

Answers

Answer:

Answer C

Explanation:

Macinski Leasing Company Leases a new machine to Sharrer Corporation. The machine has a cost of $70,000 and fair value of $95,000. Under the 3 year, non-cancelable contract, Sharrer will receive title to the machine at the end of the lease. The machine has a 3 year useful life and no residual value. The lease was signed on January 1, 2017. Macinski expects to earn an 8% return on its investment, and this implicit rate is known by Sharrer. The annual rentals are payable on each December 31, beginning December 31, 2017.a) Discuss the nature of the lease agreement and the accounting method that each party to the lease should applyb) Prepare amortization schedule suitable for both the lessor and lesseec) Prepare the journal entry at commencement of the lease for Macinskid) Prepare the journal entry at commencement of the lease for Sharrere) Prepare the journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Macinski's implicit rate (Sharrer's incremental borrowing rate is 9%), and (2) Sharrer incurs initial direct costs of $10,000.

Answers

Answer:

Explanation:

amortization schedule:

Date      Lease PMT    Interest    Principal                   Lease Balance

01.01.17                                                                                    95,000

12.31.17  37,534.57     8550         28,984.57                         66,015.43

12.31.18  37,534.57     5,941.39    31,593.18                           34,422.25

12.31.19  37,534.57     3,112.33     34,422.25                                 0

Present value interest factor of annuity for 9% and 3 years = 2.531

Annual payment will be = 95,000/2.531 = $37,534.57

Interest for the 1st year will be = 95,000*0.09 = $8550

Dr Fixed Asset 95,000

Cr Lease Paybale 95,000

31/12/17

Dr Lease Payable  28,984.57                        

Dr Interest 8550

Cr Cash 37,534.57

31/12/18

Dr Lease Payable  31,593.18                          

Dr Interest 5,941.39    

Cr Cash 37,534.57

31/12/19

Dr Lease Payable  34,422.25                                

Dr Interest 3,112.33    

Cr Cash 37,534.57

Final answer:

The journal entry at commencement of the lease for Macinski includes debit: Lease Receivable $234,618.36, debit: Machine Cost $70,000.00, and credit: Lease Revenue $304,618.36. The journal entry at commencement of the lease for Sharrer includes debit: Machine $304,618.36, credit: Lease Payable $234,618.36, and credit: Cash $70,000.00.

Explanation:

a) The lease agreement between Macinski Leasing Company and Sharrer Corporation is a finance lease because it transfers ownership of the machine to Sharrer at the end of the lease term. Both parties should apply the accounting method for finance leases.

b) To prepare the amortization schedule, we need to calculate the annual lease payment, which is the present value of the future lease payments. We can use the formula PV = PMT x [(1 - (1 + r)^-n) / r], where PV is the present value, PMT is the annual payment, r is the interest rate, and n is the number of periods. Using the given information, we can calculate the annual payment and then prepare the amortization schedule.

c) The journal entry at commencement of the lease for Macinski is:

  • Debit: Lease Receivable $234,618.36
  • Debit: Machine Cost $70,000.00
  • Credit: Lease Revenue $304,618.36

d) The journal entry at commencement of the lease for Sharrer is:

  • Debit: Machine $304,618.36
  • Credit: Lease Payable $234,618.36
  • Credit: Cash $70,000.00

e) The journal entry at commencement of the lease for Sharrer, assuming (1) Sharrer does not know Macinski's implicit rate and (2) Sharrer incurs initial direct costs of $10,000, is:

  • Debit: Machine $304,618.36
  • Debit: Lease Liability (including initial direct costs) $244,618.36
  • Debit: Lease Liability (excluding initial direct costs) $234,618.36
  • Credit: Cash $70,000.00

Learn more about Lease Accounting here:

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