BUSINESS COLLEGE

Use below information to prepare general journal entries for Belle Co.’s 1 through 7 transactions. a. D. Belle created a new business and invested $5,900 cash, $6,900 of equipment, and $12,900 in web servers in exchange for common stock.
b. The company paid $6,000 cash in advance for prepaid insurance coverage.
c. The company purchased $800 of supplies on account.
d. The company paid $600 cash for selling expenses.
e. The company received $6,000 cash for services provided.
f. The company paid $800 cash toward accounts payable.
g. The company paid $4,000 cash for equipment.

Answers

Answer 1
Answer:

Here are the general journal entries for each of the transactions:

a. D. Belle invested in the business with cash, equipment, and web servers in exchange for common stock:

  • Cash: $5,900
  • Equipment: $6,900
  • Web Servers: $12,900
  • Common Stock: $25,700

b. The company paid in advance for insurance coverage:

  • Prepaid Insurance: $6,000
  • Cash: $6,000

c. The company purchased supplies on account:

  • Supplies: $800
  • Accounts Payable: $800

d. The company paid cash for selling expenses:

  • Selling Expenses: $600
  • Cash: $600

e. The company received cash for services provided:

  • Cash: $6,000
  • Service Revenue: $6,000

f. The company paid cash to settle accounts payable:

  • Accounts Payable: $800
  • Cash: $800

g. The company paid cash to acquire equipment:

  • Equipment: $4,000
  • Cash: $4,000

Journal entries are the chronological recordings of financial transactions in a company's accounting system. They serve as a detailed record, documenting each transaction's effects on various accounts, such as assets, liabilities, revenues, and expenses.

Journal entries provide a clear audit trail, helping track the flow of money and enabling the creation of financial statements.

They act as the foundation for accurate financial reporting, facilitating transparency, analysis, and decision-making within an organization.

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Answer 2
Answer:

Final answer:

This question is about preparing general journal entries for various transactions in Belle Co.'s business. The company engages in activities such as investing cash and equipment, purchasing supplies on account, and receiving cash for services provided. The journal entries for each transaction are provided in the response.

Explanation:

Journal Entry a:

Debit: Cash ($5,900) + Equipment ($6,900) + Web servers ($12,900)

Credit: Common stock ($25,700)

Journal Entry b:

Debit: Prepaid Insurance ($6,000)

Credit: Cash ($6,000)

Journal Entry c:

Debit: Supplies ($800)

Credit: Accounts payable ($800)

Journal Entry d:

Debit: Selling expenses ($600)

Credit: Cash ($600)

Journal Entry e:

Debit: Cash ($6,000)

Credit: Service revenue ($6,000)

Journal Entry f:

Debit: Accounts payable ($800)

Credit: Cash ($800)

Journal Entry g:

Debit: Equipment ($4,000)

Credit: Cash ($4,000)

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A static budget: _________a. should be compared to actual costs to assess how well costs were controlled. b. should be compared to a flexible budget to assess how well costs were controlled. c. is valid for only one level of activity. represents the best way to set spending targets for managers. d. A planning budget is prepared before the period begins and is valid for only the planned level of activity.
Puget Sound Divers is a company that provides diving services such as underwater ship repairs to clients in the Puget Sound area. The company’s planning budget for May appears below: Puget Sound Divers Planning Budget For the Month Ended May 31 Budgeted diving-hours (q) 350 Revenue ($420.00q) $ 147,000 Expenses: Wages and salaries ($11,500 $130.00q) 57,000 Supplies ($4.00q) 1,400 Equipment rental ($2,200 $25.00q) 10,950 Insurance ($3,900) 3,900 Miscellaneous ($510 $1.44q) 1,014 Total expense 74,264 Net operating income $ 72,736 Required: During May, the company’s actual activity was 340 diving-hours. Compute the flexible budget of activity.

TB MC Qu. 05-109 Marquis Company uses... Marquis Company uses a weighted-average perpetual inventory system and has the following purchases and sales: August 2 10 units were purchased at $12 per unit. August 18 15 units were purchased at $14 per unit. August 29 12 units were sold. What is the amount of the cost of goods sold for this sale

Answers

Answer:

$158.40

Explanation:

For computation of amount of the cost of goods sold for this sale first we need to find out the Weighted Average Cost per unit which is shown below:-

Weighted Average Cost per unit = ((10 units × $12) + (15 units × $14)] ÷ (10 + 15)

= 330 ÷ $25

= $ 13.20 per unit

Cost of Goods Sold = Purchase per unit × Weighted Average Cost per unit

= 12 units × 13.20 per unit

= $158.40

TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The following is per-unit information relating to the manufacture and sale of this product. Unit sales price $ 30 Variable cost per unit 6 Fixed costs per year 360,000 a. Determine the contribution margin ratio. b. Determine the sales volume (in dollars) required to break even. c. Determine the sales volume (in dollars) required to earn an annual operating income of $440,000. d. Determine the margin of safety (in dollars) if annual sales total 60,000 units.

Answers

Answer:

Instructions are below.

Explanation:

Giving the following information:

Unit sales price $ 30

Variable cost per unit 6

Fixed costs per year 360,000

To calculate the contribution margin ratio, we need to use the following formula:

Contribution margin ratio= contribution margin / selling price

Contribution margin ratio= (30 - 6) / 30

Contribution margin ratio= 0.8

The break-even point in dollars formula is:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point in units= 360,000 / 0.8

Break-even point in units= $450,000

Now, the desired profit is $440,00:

Break-even point (dollars)= (fixed costs + desired profit) / contribution margin ratio

Break-even point (dollars)= (360,000 + 440,000) / 0.8

Break-even point (dollars)= $1,000,000

Finally, the margin of safety:

Sales= 60,000*30= $18,000,000

Margin of safety= (current sales level - break-even point)

Margin of safety= 18,000,000 - 450,000

Margin of safety=  $17,550,000

The makers of Whirlpool washers and other electrical appliance manufacturers need to be concerned about the kind and availability of electricity in the global marketplace. If there were a compatibility problem, it would be the result of a _____________difference. a. technological
b. cultural
c. societal
d. economic

Answers

Answer:

a. technological

Explanation:

since in the given situation it is mentioned that the manufactured are concerned with respect to the availability of the electricity in the global marketplace. Now when the compatibility problem is there so this is the technological difference as here the compatibility is to be seen whether it is fiited or not

Therefore the option a is correct

"The Federal Reserve raises the reserve requirement from 7 percent to 8 percent. Consequently banks must set aside more money and consequently have less money to lend. The result is that the banks will raise the interest rate they charge to their customers. These conditions make it harder and more expensive for people and businesses to borrow money. Because they can’t borrow as much, they can’t spend as much. If people aren’t spending as much, prices don’t go up. With this action, the Fed has lessened the likelihood of ________."

Answers

Answer: a. Inflation

Explanation:

Inflation refers to the general rise in prices of items in an economy in a certain period of time. Inflation essentially erodes the value of the domestic currency of the economy in question.

Central Banks like the Fed can use Monetary policy to influence inflation. In this case they reduced the amount of money in the economy by reducing bank loans. This will ensure that people cannot spend too much which would increase demand and therefore increase prices.

By doing this, they have limited the likelihood of inflation.

You are going to buy a new car worth $24,500. The dealer computes your monthly payment to be $514.55 for 60 months of financing. What is the dealer’s effective rate of return on this loan transaction?

Answers

Answer:

9.92%

Explanation:

First, find the Annual Percentage Rate (APR).

You can do this with a financial calculator using the following inputs;

PV = -24500

N = 60

PMT = 514.55

then CPT I/Y = 0.792% (this is a monthly rate)

APR = 0.792% *12 = 9.5%

Next, convert APR to EAR;

EAR = (1+(APR)/(m)) ^(m) -1

whereby m= number of compounding periods per year ;12 in this case.

EAR =(1+(0.095)/(12)) ^(12) -1

= 1.0992476 - 1

=0.0992476  or 9.92%

Therefore, the effective rate on this loan is 9.92%

A produce distributor uses 773 packing crates a month, which it purchases at a cost of $11 each. The manager has assigned an annual carrying cost of 33 percent of the purchase price per crate. Ordering costs are $28. Currently the manager orders once a month. How much could the firm save annually in ordering and carrying costs by using the EOQ?

Answers

\sqrt(2*773*28)/(33)Answer:

Explanation:

Using the EOQ Formula =  EOQ\sqrt(2*D*O)/(H)

D = Demand = 773

O = Ordering Cost =28

H = holding Cost = 11*33% =3.63

So we have :

EOQ=\sqrt(2*D*O)/(H)

EOQ= \sqrt(2*773*28)/(3.63)

EOQ=\sqrt(43288\n)/(3.63)

EOQ= √(11925.06887)

EOQ= 109.20196

   

Previous per unit order cost = 28/773 =0.03622

No of Orders = D/o  

No of Orders = 773/109.20196 =7.0786

Cost per order =109.20196*0.03622 =3.9555

Total order cost= 7.0786*3.9555=27.9998

At EOQ holding Cost is equal to Order Cost

New Order cost =27.9998

Holding Cost = 27.9998

New cost As per EOQ = 56

Previous (33+28)  =  61

Net Saving = 5
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