In a simple random sample of 800 people age 20 and over in a certain country, the proportion with a certain disease was found to be 0.165 (or 16.5%). Complete parts (a) through (c) below. a. What is the standard error of the estimate of the proportion of all people in the country age 20 and over with the disease? (Round to four decimal places as needed.) b. Find the margin of error, using a 95% confidence level, for estimating this proportion. m=______(round to three decimal places as? needed.)c. Report the 95% confidence interval for the proportion of all Americans age 20 and over with diabetes.
Answers
Answer and Explanation:
Please find attachment
I'm calculating standard error we used the formula standard deviation/√number of samples. Standard deviation is not known and so it was first calculated
Margin of error and confidence intervals were also calculated using their formulas
Related Questions
Tennessee Corporation is analyzing a capital expenditure that will involve a cash outlay of $109,332. Estimated cash flows are expected to be $36,000 annually for 4 years. The present value factors for an annuity of $1 for 4 years at interest of 10%, 12%, 14%, and 15% are 3.170, 3.037, 2.914, and 2.855, respectively. The internal rate of return for this investment is a.9% b.3% c.10% d.12%
Answers
Answer:
D
Explanation:
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
IRR can be calculated with a financial calculator
Cash flow in year 0 = $-109,332
Cash flow each year from year 1 to 4 = $36,000
IRR = 12%
To find the IRR using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the IRR button and then press the compute button.
A mortgage is paid off in 30 years with a total of $124,000. It had a 2% interest rate that compounded monthly. What was the principal
Answers
Answer:
the Principle, PV on the mortgage was $68,086.64.
Explanation:
The Principle on the mortgage, PV is determined as follows :
FV = $124,000
N = 30 × 12 = 360
P/ yr = 12
PMT = $0
R = 2%
PV = ?
Using a Financial Calculator, the Principle, PV on the mortgage was $68,086.6399 or $68,086.64.
In the liquidation of a partnership, any gain or loss on the realization of non-cash assets should be allocated:_____.
a. first to creditors and the remainder to partners.
b. to the partners on the basis of their capital balances.
c. only after all creditors have been paid.
d. to the partners on the basis of their income-sharing ratio.
Answers
Answer:
D. To the partners on the basis of their income-sharing ratio.
Explanation:
Partnership liquidation can be easily seen to come into existence indefinitely through periodic changes within the ownership, they are seen to occur by circumstances which are totally uncommon occurrence.
The form of the dissolution is irrelevant, whether by absenting by personal decision of individual member or wholesale departure and formal liquidation. The end result will be the same. The primary dream of these harmonious and synchronical growth of the firm will be seen to come to an end.
This is why it is best shared to the partners on the basis of their income sharing ratio.
n the _____stage of team development, team members often become intensely loyal to one another and feel mutual accountability for team successes and failures.
Answers
Answer:
Performing.
Explanation:
In other to get to this stage of team development, you must have passed through the certain other three stages where you are been formed as a group and also stormed before performance.
Group seen to have made it to their performing stage are seen to displays a level of competence experience and also trust that is less apparent in the earlier stages of group development. Cohesion is seen to be the vital driver in this stage of team development. Also strong relationships is maintained amongst its members facilitating smooth flow of work; and can certainly work without supervision too.
Company X was expected to have earnings per share of $0.52 for the upcoming quarter. On the day of the results, the company reported earnings per share of $0.83. What happened to the share price when the stock market opened?
Answers
Answer:
Rise in stock price.
Explanation:
In general, the stock price has increased because the expected earning was $0.52 per share but the actual earnings were $0.83. therefore, we can say that stock prices have increased. moreover, there are other factors that may affect the stock price. But in this case. A positive surprise in the earnings per share results in stock price going up.
White says, “We live in a world where success is defined by income.” Do you agree with this statement? Discuss examples in your life that support or negate this idea.
Answers
Answer:
yes i agree coz nowadays even in my family, the outsiders give more respect and praise my big brother as he earns big income
The decision that could be made regarding the statement that "In the modern world, income has turned equivalent to success" would be:
Yes.
The reason to agree with this statement is due to the increased importance that the modern world has provided to money.For example, a person is considered successful only when he earns a handsome amount while a person with a lower or average income but greater satisfaction level is considered unsuccessful. However, there is also a saying that "money can't buy happiness" which suggests that people can be sad even after having money and vice versa.Thus, it depends on the individual's perception and the way they equate success with happiness or material possessions.Learn more about "Income" here:
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Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $1,000,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 190,000 $ 125,000 Property, plant, equip. (net) 650,000 765,000 Liabilities 255,000 255,000 Lake would record goodwill of
Answers
Answer:
Lake would record goodwill of $365,000
Explanation:
Fair value of net assets = Fair value of current asset + Fair value of property, plant and equipment
Fair value of net assets = $125,000 + $765,000
Fair value of net assets = $890,000
Fair market value = Fair value of net assets - Liabilities assumed
Fair market value = $890,000 - 255,000
Fair market value = $635,000
Goodwill = Consideration - Fair market value
= $1,000,000 - $635,000
= $365,000
Hence, the amount of goodwill is $365,000.
Journalize the following sales transactions for Salem Sportswear. Explanations are not required.
Aug. 1 Salem sold $69,000 of women's sportswear on account, credit terms of 3 / 10, n / 60. Cost of goods is $38,000.
5 Salem received a $3,500 sales return on damaged goods from the customer. Cost of goods damaged is $1 ,750.
10 Salem receives payment from the customer on the amount due, less the return and discount.
Journalize the sales transactions.
Aug 1 : Salem sold $69,000 of women's sportswear on account, credit terms of 3 / 10, n / 60. Cost of goods is S38,000.
Begin by preparing the entry to journalize the sale portion of the transaction.
Answers
Answer:
Aug. 1
Trade Receivable $69,000 (debit)
Cost of Sales $38,000 (debit)
Sales Revenue $69,000 (credit)
Inventory $38,000 (credit)
Aug 5
Sales Revenue $3,500 (debit)
Inventory $1 ,750 (debit)
Trade Receivable $3,500 (credit)
Cost of Sales $1 ,750 (credit)
Aug 10
Cash $63,535 (debit)
Discount allowed $1,965 (credit)
Trade receivable $65,500 (credit)
Explanation:
Aug 1
Recognize the Cost of Sale and the Assets of Trade Receivables.
Aug 5
De-recognize the Cost of Sales and Assets of Trade receivables to the extent of the goods that were returned.
Aug 10
Recognize the Cash Asset received less the cash discount of 3 % and also recognize the discount allowed expense to the amount of discount allowed.
Pedra, Inc. incurred direct labor costs of $54,000 for 6,000 hours. The standard labor cost was $55,200. During the month, Pedra assigned 6,000 direct labor hours costing $54,000 to production. The standard hours were 6,200. Journalize the transactions for Pedra, Inc. to account for this activity.
Answers
Answer and Explanation:
The Journal entry is shown below:-
1. Factory Labor Dr, $55,200
To Labor Price Variance $1,200
To Factory Wages Payable $54,000
(Being factory labor is recorded)
Here we debited the factory labor as it increased the expenses and we credited the labor price variance and factory wages payable as it the factory wages payable increased the liabilities
2. Work in Process Inventory $57,040 ($55,200 ÷ $6,000 × $6,200)
To Labor Quantity Variance $1,840
To Factory Labor $55,200
(Being is work in progress is recorded)
Here we debited the work in progress inventory as it increased the assets and we credited the labor quantity variance and factory labor as the factory labor decreased the expenses
Sand Key Development Company estimates that it will generate an operating income of $7.25 million. Which financing option should Sand Key use?
Answers
Answer: debt financing option
Explanation:
Debt financing is a way by which an economic agent such as the individual, firm or the government gets enough money in order to meet a particular need.
Debt financing can be through loans from family and friends, personal loans, bank loans, credit cards etc. Since Sand Key Development Company estimates that it will generate an operating income of $7.25 million, the company can use debt financing.
Carr Company is considering two capital investment proposals. Estimates regarding each project are provided below: Project Soup Project Nuts Initial investment $400,000 $600,000 Annual net income 30,000 46,000 Net annual cash inflow 110,000 146,000 Estimated useful life 5 years 6 years Salvage value -0- -0- The company requires a 10% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 5 3.890 3.791 3.696 3.605 6 4.486 4.355 4.231 4.111 "The net present value for Project Nuts" is Group of answer choices
Answers
Answer:
NPV = $35,868.06
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV for Project Nuts
NPV can be calculated using a financial calculator
Cash flow in year 0 = $-600,000
Cash flow each year from year 1 to 6 = 146,000
I = 10%
NPV = $35,868.06
To find the NPV using a financial calculator:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
Orbit Services, Inc. pays $ 760 ,000 to acquire 30% (200,000 shares) of the voting stock of State Investments, Inc. on January 5, 2019. State Investments, Inc. declares and pays a cash dividend of $ 1.40 per share on June 14, 2019. What is the correct journal entry for the transaction on June 14, 2019?
Answers
Answer:
since Orbit's investment represents a significant influence (more than 20%) on State, we have to use the equity method for accounting for investments in other companies.
the journal entry to record the initial investment:
January 5, 2019, investment in State Investments, Inc.
Dr Investment in State Investments, Inc., 760,000
Cr Cash 760,000
When we use the equity method, cash dividends decrease the carrying value of our investments:
June 14, 2019, cash dividend received from State Investments, Inc.
Dr Cash 280,000
Cr Investment in State Investments, Inc., 280,000
A trader maintains a position in a small capitalization stock that has low trading volume. The trader has a high level of which of the following risks?
A) MarketB) LiquidityC) BusinessD) Inflation
Answers
Answer:
B) Liquidity
Explanation:
Liquidity is the ability of quickly buy or sell a stock without any price change.
Liquidity in a small-capitalization stock that has low trading volume is generally low that causes a problem for traders. It is so because in small capitalization, traders are unable to understand potential pitfalls and blindly invest in small-capitalization stocks which do not give profit as expected and the liquidity becomes low.
Hence, the correct answer is B) Liquidity.
"In the long-run, monopolistically competitive firms: have excess capacity. produce at the minimum of average total cost. charge prices equal to marginal cost. both B and C are true."
Answers
Answer:
The correct answer is the option D: Both B and C are true.
Explanation:
To begin with, a monopolistically competitive firms is the one that produces in a market in where the other companies sell a pretty similar but different product and there are a lot of buyers so the most important way to difference themself is by the publicity or the identification of the brand in the mind of the consumers. Moreover, in this type of market in the long-run equilibrium the price if equal to the marginal cost and also to the minimun of the average total cost so therefore that it is said that there are zero economic profit
2. Roth retirement funds require you to pay taxes on your investment dollars up-front, while
traditional IRAs allow you to pay taxes only when you withdraw your investment at age 59.5 or
older. What are the pros and cons of each option?
(10 points: 5 for at least one pro and 5 for at least con)
Answers
Answer:
The Pros and Cons of Roth IRA and the Traditional IRA or 401(K):
Roth IRA is not advantageous to those, who are starting to save late in their career. It favors the younger worker, who is starting out with low-paying jobs at lower-paying tax rates, who will later be earning more.
With Roth IRA, you suffer the tax burden upfront when you are active and while making your contributions, so that you can enjoy your retirement benefits tax-free. This is why the younger worker benefits more. In the prime of life with little responsibilities, you can settle the taxman so that you can be free of him later in older age. But, if you are in the high tax bracket, this category is not funny for you, anyway. The IRS has an income limit for this category, therefore, you must go for the traditional IRA.
The traditional IRA saves you the tax burden initially, but you can never be free of the IRS. It must take its share later, having allowed you to enjoy tax-free contributions. When the net is filled, the IRS cuts its percentage off.
You will never feel bad then, because your tax rate will surely be reduced in comparison with when you are making the contributions. So, it is just and right to allow the IRS, who generously helped you to grow the nest in the first place to take its just and lawful cut. It does not bleed too much then, afterall you are drying up with life's responsibilities, including reduced tax bracket, and many of your children have started answering to the IRS independently. This is the better time to deal with IRS, anyway.
Explanation:
The question has the explanation: ROTH IRAs are retirement funds that allow you to pay taxes on your investments into retirement funds as you are making the contributions, so that you are free to make your withdrawals after at least 5 years without paying additional taxes.
The traditional IRAs or the 401(K) encourage you to make your retirement contributions without paying taxes on them so that you can contribute more. Then the IRS will bounce on you to pay the taxes when you are making withdrawals having grown the investments.
IRAs mean Individual Retirement Accounts which individuals use to save and accumulate their retirement funds.
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization schedule from issuance until maturity:
Date Cash Effective Decrease in Outstanding
interest interest balance balance
1/1/2021 $207,020
6/30/2021 $7,000 $6,211 $789 206,230
12/31/2021 7,000 6,187 813 205,417
6/30/2022 7,000 6,163 837 204,580
12/31/2022 7,000 6,137 863 203,717
6/30/2023 7,000 6,112 888 202,829
12/31/2023 7,000 6,085 915 201,913
6/30/2024 7,000 6,057 943 200,971
12/31/2024 7,000 6,029 971 200,000
What is the annual stated interest rate on the bonds?
a. 3.5%
b. 6%
c. 7%
d. none of the above
Answers
Answer:
c. 7%
Explanation:
According to the given scenario, the computation of the annual stated interest rate on the bonds is shown below:-
Sated interest Rate = Cash interest ÷ Face Value of the bond × 2
= $7,000÷ $200,000 × 2
= 7%
Therefore for computing the annual stated interest rate on the bonds we simply applied the above formula. hence the correct option is c
changed its estimates to a total useful life of 5 years with a salvage value of $81000. What is 2021 depreciation expense?
Answers
Answer: $162,000
Explanation:
The depreciation expense for the first 3 years up till 2021 is;
= (Cost - Salvage value)/Useful life
= ( 579,000 - 57,000) / 9
= $58,000
In 2021, the Net book value was;
= 579,000 - ( 58,000 * 3)
= 579,000 - 174,000
= $405,000
Useful life has been changed to 5 years. 3 years have already elapsed left with 2.
New salvage value is $81,000.
= (NBV - Salvage Value) / Useful life
= (405,000 - 81,000) / 2
= $162,000
building that has a market value of $366,000; the partnership assumes responsibility for a $133,000 note secured by a mortgage on the property. Monroe invests $108,000 in cash and equipment that has a market value of $83,000. For the partnership, the amounts recorded for Fontaine's Capital account and for Monroe's Capital account are:\
Answers
Answer:
Fontaine - $233,000Monroe - $191,000Explanation:
Fontaine invested a building that had a value of $366,000 but the partnership assumes a $133,000 note secured by a mortgage on the property. This therefore reduces Fontaine's contribution;
= 366,000 - 133,000
= $233,000
Monroe contributed both cash and equipment so that would go to Monroe's capital account as their capital contribution;
= 108,000 + 83,000
= $191,000
Selling, general, and administrative expenses were $160,600; net sales were $730,000; interest expense was $17,500; research and development expenses were $76,650; net cash provided by operating activities was $193,800; income tax expense was $16,360; cost of goods sold was $401,500. Required: a. Calculate operating income for the period.
Answers
Answer:
OPERATING INCOME $91,250
NET INCOME $57,390
Explanation:
a. Calculation for operating income for the period.
Net sales $730,000
Less: Cost of goods sold ($401,500)
Gross profit $328,500
Less Selling, general, and administrative expenses ($160,600)
Less: Research and development expenses ($76,650)
OPERATING INCOME $91,250
b. calculation for the net income for the period.
Net sales $730,000
Less: Cost of goods sold ($401,500)
Gross profit $328,500
Less Selling, general, and administrative expenses ($160,600)
Less: Research and development expenses ($76,650)
OPERATING INCOME $91,250
Less: Interest expense ($17,500)
Less: Tax expense ($16,360)
NET INCOME $57,390
Therefore the OPERATING INCOME will be $91,250 while the NET INCOME will be $57,390
g A company's most recent balance sheet reported total assets of $1.9 million, total liabilities of $0.8 million, and total equity of $1.1 million. Its Debt to equity ratio is: Group of answer choices
Answers
Answer:
0.73
Explanation:
Debt to equity ratio is calculated as Total debt / Total equity
= $0.8 million / $1.1 million
= 0.73
Therefore, debt to equity ratio is 0.73
Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $1,200,000 with a $300,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages of $180,000 per year. In addition, the equipment will have operating and energy costs of $7,500 per year.
Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
Answers
Answer:
Average rate of return = 11%
Explanation:
Depreciation = (Cost of equipment - Residual value) / Useful years
Depreciation = (1,200,000-300,000) / 10
Depreciation = 90,000
Increase in net annual income = 180,000 - 90,000 - 7,500
Increase in net annual income = 82,500
Average investment = (1,200,000 + 300,000) / 2 = 750,000
Average rate of return = Increase in net annual income / Average investment
Average rate of return = 82,500/750,000
Average rate of return = 0.11
Average rate of return = 11%
Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $ 380,000
Working capital required $ 120,000
Annual net cash receipts $ 135,000
Cost to construct new roads in year three $ 44,000
Salvage value of equipment in four years $ 69,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.
The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company’s required rate of return is 18%.
Required:
Determine the net present value of the proposed mining project. (Any cash outflows should be indicated by a minus sign.
Answers
Answer:
The net present value of the proposed mining project is - $163,621.41.
Explanation:
The Summary of Cash flows is as follows :
Year 0 : - ($ 380,000 + $ 120,000) = - $500,000
Year 1 : $ 135,000
Year 2: $ 135,000
Year 3: $ 135,000 - $ 44,000 = $91,000
Year 4: $ 135,000 + $ 69,000 + $ 120,000 = $324,000
Determine the Net Present Value of the mining project as follows :
Using a Financial Calculator, entries will be as follows
- $500,000 CFj
$ 135,000 CFj
$ 135,000 CFj
$91,000 CFj
$ 135,000 CFj
18 % I/YR
SHIFT NPV - $163,621.41
Kenneth Arrow discussed two important situations in which profit maximization can be socially inefficient. One of these occurs when
Answers
Answer:
Explanation:
One of these occurs when costs are not paid for, as in pollution, the other is when there is an imbalance of knowledge between buyer and seller. Pollution can be a consequence that cannot be solved with money and can also be socially irresponsible for a company. On the other hand, an imbalance of knowledge can prevent a company from profit maximization if the seller does not understand the product or services that the buyer is selling.
Calgary Lumber Company incurs a cost of $315 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $440 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $465 per hbf, which can be sold for $600 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2).
Answers
Answer:
Calgary Lumber Company
Differential Analysis dated March 15:
Alternative 1 Alternative 2
Sell rough-cut Lumber Process to finished-cut
Sales $440 $600
Cost of processing 315 465
Profit $125 $135
Choose Alternative 2.
Explanation:
Calgary Lumber Company's differential analysis is a tool that its management can use to decide the alternative to pursue by examining the differences in the outcomes of two or more alternative actions. From the analysis done between the two alternatives open to Calgary, it appears that the second alternative will yield a higher profit of $135 instead of alternative 1's profit of $125. There is a differential profit of $10 per hundred board feet to be made if Calgary Lumber Company pursues alternative 2 instead of alternative 1.
Problems which deal with the direct distribution of products from supply locations to demand locations are called:____________.
a. Transportation problems
b. Assiignment problems
c. Network problems
d. Transshipment problems
Answers
Answer:
a. Transportation problems
Explanation:
In Business management, problems which deal with the direct distribution of products from supply locations to demand locations are called transportation problems.
Transportation is a supply chain technique which primarily includes all of the process involved in the distribution of finished goods and services from the production line to the consumers or end users, so as to meet their needs or wants.
Select the correct answer.
What does a production possibilities curve represent?
ОА.
a combination of price and demand of goods and services
B.
a combination of the goods produced before and after a change in a factor of production
Ос.
a combination of two factors of production used to produce a single good or service
OD
a combination of two goods that can be produced using limited resources
Answers
The statement that describes what a production possibility curve represent is: D.
What is Production Possibility Curve?Production possibility curve can be described as that which shows the quantity of two products that can possibly be produced if both products are to depend on the same resources for production to occur.The image attached below shows a typical production possibility curve.Therefore, the statement that describes what a production possibility curve represent is: D.
Learn more about production possibility curve on:
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Suppose that on August 14, 2019, an antique woven rug handmade in Canada is priced at CAD 1,100. The approximate U.S. dollar price of the rug would be
Answers
Answer:
USD 825.95Explanation:
Step one:
To tackle this problem we need data from historical chart.
From historical chart, on August 14, 2019, 1 USD is equivalent to CAD 1.3318
Step two:
From the historical data we need to perform conversion on the data to get the USD equivalent of the CAD given in the problem
Hence
if 1 USD = CAD 1.3318 then
x USD = CAD 1,100
by cross multiplying we have
x USD= 1,100/ 1.3318
x USD= 825.95
Hence as at August 14, 2019 CAD 1,100 is USD 825.95
Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,600 helmets, using 2,664 kilograms of plastic. The plastic cost the company $20,246. According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $8.00 per kilogram. Required: 1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,600 helmets? 2. What is the standard materials cost allowed (SQ × SP) to make 3,600 helmets? 3. What is the materials spending variance? 4. What is the materials price variance and the materials quantity variance?
Answers
Answer and Explanation:
The computation is shown below;
1. The Standard quantity of kilogram for making 3,600 helmets is
= Number of helmets × number of kilograms required
= 3,600 × 0.65
= 2,340
2. The standard material cost is
= Standard quantity × standard price
= 2,340 × $8
= $18,720
3. Material spending variance is
= Plastic cost - standard material cost
= $20,246 - $18,720
= $1,526 unfavorable
4. The material price and quantity varaince is
Price variance
= Plastic cost - (number of plastic × cost)
= $20,246 - (2,664 × $8)
= $1,066 favorable
Quantity variance
= Standard Cost × (Actual quantity - standard quantity)
= $8 × (2,664 - 2,340)
= $2,592 unfavorable
Harris Co. takes a full year's depreciation expense in the year of an asset's acquisition and no depreciation expense in the year of disposition. Data relating to one of Harris's depreciable assets at December 31, 2015 are as follows: Acquisition year 2013 Cost $210,000 Residual value 30,000 Accumulated depreciation 144,000 Estimated useful life 5 years Using the same depreciation method as used in 2013, 2014, and 2015, how much depreciation expense should Harris record in 2016 for this asset? a. $24,000b. $36,000c. $42,000d. $48,000
Answers
Answer:
A.24,000
Explanation:
Depreciation expense for the year 2016 can be calculated as follows
DATA
Acquisition year = 2013
Cost = $210,000
Residual value = 30,000
Accumulated depreciation = 144,000
Estimated useful life = 5 years
Remaining useful life = 5 + 4 + 3 + 2 + 1 = 15
Solution
Year Cost Remaining life Depreciation fraction Depreciation exp
1 180,000 5 5/15 $60,000
2 180,000 4 4/15 $48,000
3 180,000 3 3/15 $36,000
4 180,000 2 2/15 $24,000
5 180,0000 1 1/15 $12,000
Harris Co. should record $24,000 in 2016 for this asset
[The following information applies to the questions displayed below.]
Allied Merchandisers was organized on May 1. Macy Co. is a major customer (buyer) of Allied (seller) products.
May 3 Allied made its first and only purchase of inventory for the period on May 3 for 2,000 units at a price of $10 cash per unit (for a total cost of $20,000).
5 Allied sold 1,500 of the units in inventory for $14 per unit (invoice total: $21,000) to Macy Co. under credit terms 2/10, n/60. The goods cost Allied $15,000.
7 Macy returns 125 units because they did not fit the customer’s needs (invoice amount: $1,750). Allied restores the units, which cost $1,250, to its inventory.
8 Macy discovers that 200 units are scuffed but are still of use and, therefore, keeps the units. Allied sends Macy a credit memorandum for $300 toward the original invoice amount to compensate for the damage.
15
Allied receives payment from Macy for the amount owed on the May 5 purchase; payment is net of returns, allowances, and any cash discount.
Prepare journal entries to record the following transactions for Allied assuming it uses a perpetual inventory system and the gross method. (Allied estimates returns using an adjusting entry at each year-end.)
Answers
Answer:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
In order to document a business transaction in the accounting records of the company, a journal entry is employed. A journal entry is often made in the general ledger, but it can also be made in a subsidiary ledger and subsequently rolled forward into the general ledger after being summarised.
The journal entry has been attached below:
Allied Merchandisers
Journal Entries
Date General Journal Debit Credit
03-May Merchandise Inventory $20,000
To Cash $20,000
05-May Accounts Receivable $21,000
To Sales $21,000
05-May Cost of goods sold $15,000
To Merchandise Inventory $15,000
07-May Sales Returns and allowances $1,750
To Accounts Receivable $1,750
07-May Merchandise Inventory $1,250
To Cost of goods sold is $1,250
08-May Sales Returns and allowances $300
To Accounts Receivable $300
15-May Cash $18,571
Sales Discounts $379
($18950*2%)
To Accounts receivable $18,950
($21000-$1750-$300)
After then, the general ledger is utilized to produce the company's financial statements. The idea behind a journal entry is to use double-entry accounting, which requires that every company transaction be recorded at least twice.
For instance, when you make a cash sale, the revenue account and the cash account are both increased. Alternatively, if you purchase items on credit, this raises both the accounts payable and inventory accounts.
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