On March 1, 2020, Parnevik Company sold goods to Goosen Inc. for $660,000 in exchange for a 5-year, zero-interest-bearing note in the face amount of $1,062,937 (an inputed rate of 10%). The goods have an inventory cost on Parnevik's books of $400,000. Required:
Prepare the journal entries for Parnevik on (a) March 1, 2020, and (b) December 31, 2020.

Answers

Answer 1
Answer:

Answer:

Parnevik Company

Journal Entries:

(a) March 1, 2020

Debit Notes Receivable (Goosen Inc.) $660,000

Credit Sales Revenue $660,000

To record the sale of goods in exchange for a 5-year, zero-interest-bearing note in the face amount of $1,062,937.

Debit Cost of Goods Sold $400,000

Credit Inventory $400,000

To record the cost of goods sold.

(b) December 31, 2020:

Debit Interest Receivable (Goosen Inc.) $55,000

Credit Interest Revenue $55,000

To record the interest receivable for 10 months on the note.

Explanation:

The sale of goods will be recorded net of the interest.  Interest Receivable from Goosen Inc. will be accumulated until when it is settled by Goosen Inc. at the end of the note's 5-year life.  By that time, the interest must have accumulated to $402,937 compounded yearly.


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For each of the following entities, identify if the entity would be governed by GASB standards by selecting a "G", FASB standards by selecting an "F", or FASAB standards by selecting an "FB". (Hint: Search the website of the entity listed if you are unsure.)1. Your university 2. Department of Defense 3. American Institute of Certified Public Accountants 4. The county in which you live 5. Internal Revenue Service 6. Mayo Clinic 7. New York City 8. American Cancer Society 9. Metropolitan Washington Airports Authority (operates the Washingtorn, DC, airports) 10.The Metropolitan Museum of Art, New York City

Tri-bikes manufactures two different levels of bicycles: the Standard and the Extreme. The total overhead of $300,000 has traditionally been allocated by direct labor hours, with 150,000 hours for the Standard and 50,000 hours for the Extreme.After analyzing and assigning costs to two cost pools, it was determined that machine hours is estimated to have $200,000 of overhead, with 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.

It was also estimated that the setup cost pool would have $100,000 of overhead, with 1,000 hours for the Standard and 1,500 hours for the Extreme.

A. What is the overhead rate per product under Traditional costing?

What is the overhead rate under Absorption Costing for:

B. The machine pool overhead rate

C. The setup pool overhead rate

Answers

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

Estimated costs and direct labor hours:

The total overhead= $300,000

Standard= 150,000 hours

Extreme= 50,000 hours

1) Under traditional costing, overhead gets allocated using a single plantwide manufacturing overhead rate.

To calculate the estimated manufacturing overhead rate we need to use the following formula:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 300,000/200,000= $1.5 per direct labor hour

Now, we can allocate overhead to each product:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Standard= 1.5*150,000= $225,000

Extreme= 1.5*50,000= $75,000

2) Machine:

Overhead= $200,000

Hours= 4,000 hours used on the Standard product and 1,000 hours used on the Extreme product.

Estimated manufacturing overhead rate= 200,000/5,000= $40 per hour

3)Set up:

Overhead= $100,000

Hours= 1,000 hours for the Standard and 1,500 hours for the Extreme.

Estimated manufacturing overhead rate= 100,000/2,500= $40

Which of the following categories in the portfolio matrix is a market leader and growing fast?a.Star
b.Meteor
c.Cash cow
d.Shiner
e.Top dog

Answers

Answer:

It is Star (B)

Explanation:

Option (a) True. Star is a product with high relative market share in a high growing market . This product is full of potential but require more investment and spending in the areas of advertising,innovation and  market research in order to maintain its market leadership position. Hence, it might be cash neutral at this stage.

In the long-run, it will eventually turns to cash cow in the portfolio if we can sustain its position.

Option(b) Meteor. False. This does not exist in product portfolio matrix.

Option (c) Cash cow. False.

This product has a large relative market share in a stagnating (mature) market, profits and cash flows are expected to be high. Because of the lower growth rate, investments needed should also be low.

Hence, they  typically generate cash in excess of the amount of cash needed to maintain the business and this  ‘excess cash’ is supposed to be ‘milked’ from the Cash Cow for investments in other business units (Stars and Question Marks). Cash Cows ultimately bring balance and stability to a portfolio.

Option (d) Shiner. False .It does not exist

Option (e) Top dog. It is a product with low relative market share in a stagnant market.

Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the:_________a. revenue effect plus redistribution effect.
b. protective effect plus revenue effect.
c. consumption effect plus redistribution effect.
d. production distortion effect plus consumption distortion effect.
e. None of the above.

Answers

Answer:

Option e. is correct

Explanation:

The Terms of Trade is equal to the average price of exports / by the average price of imports. The terms-of-trade refers to the relative price of exports in terms of imports.

Protective effect refers to the wasted resources due to production of good at a higher cost. Consumption effect refers to the loss to consumer due to higher price that leads to less consumption.

Should the home country be "large" relative to the world, its imposition of a tariff on imports would lead to an increase in domestic welfare if the terms-of-trade effect exceeds the sum of the protective effect plus consumption effect

Which of the following is false about investing with borrowed money? (5 points)There is increased risk.

If you lose money, you will still have payments on it.

It is the best way to ensure you have retirement funds.

No investment is a sure deal

Answers

It is the best way to ensure you have retirement funds. 

Retirement funds are generally a conservative investment and investing with borrowed money is seen as a risky activity because it requires payment, regardless of whether you earn additional money through investing or not. Because no investment is a sure deal, the investment process carries risk and the loan requires certain outflows in payments. Therefore, it is not often prudent to use this technique when investing for retirement. 

A stainless steel knife set is one item it stocks. Demand (2,400 sets per year) is relatively stable over the entire year. Whenever new stock is ordered, a buyer must ensure that numbers are correct for stock on-hand and then phone in a new order. The total cost involved to place an order is about $5. RW figures that holding inventory in stock and paying for interest on borrowed capital, insurance, and so on, add up to about $4 holding cost per unit per year.Analysis of the past data shows that the standard deviation of demand from retailers is about four units per day for a 365-day year. Lead time to get the order is seven days.What is the economic order quantity?

Answers

Answer:

Annual demand (D) = 2,400 sets

Holding cost (H) =  $4

Ordering cost (Co) =  $5

EOQ =    √2 x 2,400 x $5

                          $4

EOQ = 77 units

Explanation:

Economic order quantity(EOQ) is the square root of 2 multiplied by annual demand and ordering cost per order divided by the holding cost per item per annum. EOQ is the quantity of stock that is bought each time a replenishment order is placed.

A city's Enterprise Fund issued revenue bonds with a face value of $10,000,000. The bonds were issued with a 2% premium and the issuance costs totaled $150,000. When the bonds are issued, the Enterprise Fund will report total other financing sources in the amount of $0. $9,850,000. $10,000,000. $10,200,000.

Answers

Answer:

The correct answer is $9,850,000

Explanation:

The Enterprise fund which will be reported, total other financing sources of the amount is computed as:

= Face Value - Cost of issuance

where

Face Value is $10,000,000

Cost of issuance is $150,000

Putting the values above:

= $10,000,000 - $150,000

= $9,850,000

Note: Premium will not be considered as it is asked for when the bonds are issued.

Final answer:

The total other financing sources reported by the Enterprise Fund would be $9,850,000.

Explanation:

The correct answer is $9,850,000.

When the city's Enterprise Fund issued revenue bonds with a face value of $10,000,000, it added a 2% premium to the face value. The premium is calculated by multiplying the face value by the premium rate, which is 2% in this case. So, the premium amount is $10,000,000 * 2% = $200,000.

The issuance costs are additional expenses incurred in the process of issuing the bonds. In this case, the issuance costs totaled $150,000.

Therefore, the total other financing sources reported by the Enterprise Fund would be $10,000,000 - $200,000 - $150,000 = $9,850,000.

Learn more about Issuing revenue bonds here:

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