BUSINESS COLLEGE

On December 1, 2016, Insto Photo Company purchased merchandise, invoice price $25,000, and issued a 12%, 120-day note to Ringo Chemicals Company. Insto uses the calendar year as its fiscal year and uses the perpetual inventory system.

Answers

Answer 1
Answer:

Answer:

See explanation section

Explanation:

Requirement A

                            Insto Photo Company

                                  Journal Entries

Date                             Accounts Name                    Debit          Credit

December 1, 2016     Inventory                              $25,000

                                           Notes payable                                 $25,000

Note: As the merchandise company issued a note for the credit purchase of merchandise inventory, notes payable is used instead of accounts payable.

Dec. 31, 2016             Interest expense                      $250

                                               Interest payable                             $250

Note: Adjusting entry is needed as the fiscal year is ended on 31st December, therefore, there will be an accrued interest expense to be paid for one month. The calculation of interest expense = $25,000 × 12% × (30 ÷ 360) [assuming  1 year = 360 days, 1 month = 30 days]. = $250 for one month's accrual.

Requirement B

March 31, 2017           Interest expense                     $   750

                                   Interest payable                      $   250

                                   Notes payable                       $25,000

                                                      Cash                                      $26,000

Note: At the end of the maturity date, the buyer will pay all the bills of the notes plus interest. Interest payable becomes debit as it did not pay by the buyer on 31st December, 2016. The remaining interest = $25,000 × 12% × (90 ÷ 360) = $750. Total cash will be paid after the maturity = $25,000 + $250 + $750 = $26,000.

Related Questions

Maria, the landlord, refuses to fix a small leak in the roof that was there prior to the current tenant. Juan, the current tenant, has just discovered the leak after a heavy rain. The consequence is that black mold has been forming in the attic for quite some time. Juan still has significant time remaining on his lease. Juan has notified Maria in writing of the mold and leak issue but has received no response. He is concerned about the premises becoming unsafe to live in. It has been 14 days since he emailed her his notification. What are all of Juan’s options if Maria declines to do the repairs? Please discuss all remedies Juan may seek. Please remember to reference the contract and text to support your analysis.
A budget that spends more money than the revenue coming in is known as a _______ budget. A. surplus B. federal C. balanced D. deficit
1 pointif the price decreases from Rs10 to Rs 8 of a commodity butthe quantity demandedremains the same , priceelasticity is * oneO zeroO infinityO none of these​
How much would a person have to deposit now to be able to withdraw $550 at the end of each year for 20 years from an account that earns 11 percent?$3.785 95$4 379 8354 739 95$5.076.55
Assume this process continues, with each successive loan deposited into a checking account and no banks keeping any excess reserves. Under these assumptions, the $500,000 injection into the money supply results in an overall increase of ______ in demand deposits.

Maintenance money for an athletic complex has been sought. Mr. Kendall, the Athletic Director, would like to solicit a donation to cover all future expected maintenance costs for the building. These maintenance costs are expected to be $1 million each year for the first five years, $1.3 million each year for years 6 through 10, and $1.5 million each year after that. (The building has an indefinite service life.)If the money is placed in the account that will pay 5% interest compounded annually, how large should the gift be?

Answers

Answer:

Total donation= $76,000,000

Explanation:

Giving the following information:

These maintenance costs are expected to be $1 million each year for the first five years, $1.3 million each year for years 6 through 10, and $1.5 million each year after that. The money is placed in the account that will pay a 5% interest compounded annually.

First, we need to calculate the final value of the donation:

We have 3 perpetual annuities.

FV= 1,000,000/0.05= 20,000,000

FV= 1,300,000/0.05=26,000,000

FV= 1,5000,000/0.05= 30,000,000

Total donation= $76,000,000

Final answer:

The amount of donation Mr. Kendall should solicit to cover all future expected maintenance costs for the athletic complex is approximately $58.81 million, based on the principle of Time Value of Money.

Explanation:

This problem is related to the concept of the Time Value of Money, which is a fundamental principle in finance. According to this principle, the value of money you have now is greater than the same amount in the future due to its potential earning capacity. It can be solved using the formula for the present value of a perpetuity.

In the first five years, Mr. Kendall needs $1 million per year, thus, the present value (PV) of these costs could be calculated by $1 million / 0.05 = $20 million. For years 6 through 10, he needs $1.3 million per year, however, since these costs will occur in the future, they should be discounted back to the present. Hence, the PV would be $1.3 million / 0.05 = $26 million, then discounted back for five years, which is $26 million / (1.05)^5 = $20.43 million. For any year after the 10th year, he needs $1.5 million per year, this is a perpetuity that will start in year 11, so, its PV would be $1.5 million / 0.05 = $30 million, then discounted back for ten years, which is $30 million / (1.05)^10 = $18.38 million. Finally, to cover all the expected maintenance costs, the donation should be the sum of these PVs, which is $20 million + $20.43 million + $18.38 million = $58.81 million.

Learn more about Time Value of Money here:

brainly.com/question/36646697

#SPJ12

Omnidata uses the annualized income method to determine its quarterly federal income tax payments. It had $100,000, $50,000, and $90,000 of taxable income for the first, second, and third quarters, respectively ($240,000 in total through the first three quarters). What is Omnidata's annual estimated taxable income for purposes of calculating the third quarter estimated payment?

Answers

Answer: $300,000

Explanation:

Given that,

Taxable income,

First quarter = $100,000

Second quarter = $50,000

Third quarter = $90,000

we need to annualized the cumulative taxable income of first half of the year that will have taxable income for the first and second quarters.

Annualizing the cumulative taxable income:

= 2 × (First quarter taxable income + Second quarter taxable income)  

= 2 × ($100,000 + $50,000)

= $300,000

Therefore, Omnidata's annual estimated taxable income for purposes of calculating the third quarter estimated payment is $300,000.

Robin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829960. Required:
A) The entry to record the redemption will include __________.
O a debit of $32000 to Premium on Bonds Payable.
O debit of $2040 to Loss on Bond Redemption.
O credit of $32040 to Premium on Bonds Payable.
O credit of $2040 to Loss on Bond Redemption.

Answers

Answer:

The correct option is debit of $2040 to Loss on Bond Redemption

Explanation:

The unamortized premium on the bonds at redemption date=carrying value-face value

carrying value is $829,960

face value is $800,000

unamortized premium=$829,960-$800,000=$29,960

cash paid on redemption=$800,000*104%=$832,000.00  

The appropriate entries would a credit to cash of $ 832,000 while face value is debit to bonds payable and also the unamortized premium is debited to premium on bonds payable

loss on retirement=$832,000-$829,960=$2040

The loss is debited to loss on bond redemption

Final answer:

The correct answer is a debit of $2040 to Loss on Bond Redemption, as the amount paid to redeem the bonds exceeded their carrying value by this amount.

Explanation:

Robin Corporation retired its bonds at 104% of their face value, which implies the bonds were bought back for $832,000 ($800,000 x 1.04). The bonds had a carrying value of $829,960. The difference between the redemption price and the carrying value caused a loss on bond redemption of $2,040 ($832,000 - $829,960).

Therefore, the entry to record the redemption of Robin Corporation's bonds will include a debit of $2040 to Loss on Bond Redemption. This shows that the company experienced a financial loss due to the cost of redeeming the bonds being higher than their book value.

Learn more about Bond Redemption here:

brainly.com/question/34167182

#SPJ11

Gabriele enterprises has bonds on the market making annual payments, with seven years to maturity, a par value of 1000, and selling for 962. At this price, this price, the bonds yield 6.6 percent.What must the coupon rate be on the bonds?

Answers

Answer:

The answer is =5.91%

Explanation:

N(Number of periods) = 7 years

I/Y(Yield to maturity) = 6.6percent

PV(present value or market price) = $962

PMT( coupon payment) = ?

FV( Future value or par value) = $1,000.

We are using a Financial calculator for this.

N= 7; I/Y = 6.6; PV = -962; FV= $1,000; CPT PMT= $59.05

Therefore, the coupon rate of the bond is of the bond is $59.05/1000

=5.91%

A _____ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership.

Answers

It seems that you missed the given choices for this question. But the answer that would complete the given statement above is LIMITED LIABILITY COMPANY. A limited liability company maintains limited liability, but offers more flexibility in terms of tax treatment than other forms of business ownership. Here are the other options: Sole Proprietorship, corporation and limited liability partnership. 

Hayes Corp. is a manufacturer of truck trailers. On January 1, 2021, Hayes Corp. leases ten trailers to Lester Company under a six-year non-cancelable lease agreement. The following information about the lease and the trailers is provided: 1) Annual payment of $120,175 is due on January 1, 2021 and at December 31 from 2021 to 2025. Hayes Corp. has an implicit rate of 8% (present value factor for 6 periods at 8% is 4.99271). 2) Titles to the trailers pass to Lester at the end of the lease. 3) The fair value of each trailer is $60,000. The cost of each trailer to Hayes Corp. is $54,000. Each trailer has an expected useful life of nine years. 4) Collectibility of the lease payments is probable. Instructions (a) What type of lease is this for the Lester Company and Hayes Corp? (b) Prepare a lease amortization schedule for Lester Company till 12/31/2021. (c) Prepare the journal entries for Lester Company on 1/1/2021 and 12/31/2021. Round all amounts to the nearest dollar.

Answers

Answer:

FINANCING LEASE.

\left[\begin{array}{cccccc}YEAR&Beginning&Cuota&Interest&amortization&Ending\n0&600000&120175&0&120175&479825\n1&479825&120175&38386&81789&398036\n2&398036&120175&31842.88&88332.12&309703.88\n3&309703.88&120175&24776.31&95398.69&214305.19\n4&214305.19&120175&17144.42&103030.58&111274.61\n5&111274.61&120175&8901.97&111273.03&1.58\n\end{array}\right]

trailer    600,000 debit

  lease liability        479,825 credit

 cash                        120,175 credit

--to record Jan 1st entry--

interest expense    38,386 debit

lease liability           81,789 credit

 cash                                 120,175 credit

--to record Dec 31st entry--

Explanation:

The lease is for more than half of the asset useful life. Also, it has a present value equal to the fair value of the trailer. Also, ownership is acquired at the end of the lease life.

To build the schedule we calculate the interest on the principal

then, we subtract that from the installment to get the principal amortization  and solve for the remaining at year-end

we repeat this procedure during the life of the lease.

Jan 1st, 2021

the journal entries will recognize the lease liability, the cash from the first payment, and the trailers received

Dec 31st, 2021

Here we must recognize the interest expense as well as the decrease in the lease liability.

Other Questions
Which of the following statements is (are) TRUE? I. A firm with market power maximizes profit by producing so that P = MC or MR = MC. II. If marginal revenue exceeds marginal cost, the firm should expand output to increase profits. III. If a firm has no costs of production, it should continue producing until marginal revenue falls to zero.
On December 31, 2021, Larry's Used Cars had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $70,000 and $1,250, respectively. During 2022, Larry's wrote off $2,675 in accounts receivable and determined that there should be an allowance for uncollectible accounts of $5,650 at December 31, 2022. Bad debt expense for 2022 would be:
​________ is an Internet marketing strategy used to increase the quantity and quality of traffic from search​ engines, often by improving the​ site's position in result lists.A.Search engine optimizationB.Search engine marketingC.A clickthrough rateD.GeotargetingE.Content farming
Crispy Fried Chicken bought equipment on January 2​, 2018​, for $ 33,000. The equipment was expected to remain in service for four years and to operate for 6,750 hours. At the end of the​ equipment's useful​ life, Crispy estimates that its residual value will be $ 6,000. The equipment operated for 675 hours the first​ year, 2,025 hours the second​ year, 2,700 hours the third​ year, and 1,350 hours the fourth year.Requirements1. Prepare a schedule of depreciation expense, accumulated depreciation, and book value per year for the equipment under the three depreciation methods: straight-line, units-of-production, and double-declining-balance. Show your computations. Note: Three depreciation schedules must be prepared.2. Which method tracks the wear and tear on the equipment most closely?