On the first day of January, Harris Company borrowed $3,000 on a one-year note payable bearing interest at 5% per year. The note specifies that principal and interest must be paid in full at the end of the one-year period. On June 30, the adjusted trial balance will show Interest Payable of

Answers

Answer 1

Answer: $75 Credit

Explanation:

Based on the information given in the question, there will be a debit of interest expense and also a credit of interest payable. This will be in the amount of:

= $3000 × 5% × 6/12

= $3000 × 0.05 × 0.5

= $75

Debit: Interest expense $75

Credit: Interest expense $75

The answer is $75 credit.


Related Questions

Assume the smart watch industry is a perfectly competitive industry that uses a specialized input. If this industry experiences an increase in demand, we might expect that in the long run: Multiple Choice neither input nor output prices will increase. both input and output prices will increase. only input prices will increase. only output prices will increase.

Answers

Answer:

Option B, both input and output prices will increase

Explanation:

Since the demand far smart watches is increasing, the price of watches will escalate to cater the opportunity cost. With the rising demand for smart watch, the demand for specialized input will also increase. Considering the growth in demand for specialized input, its cost shall also escalate to take the benefit of opportunity. Along with raw material, variable costs such as transportation, manpower, electricity etc.  will also increase both in input (bringing raw material and producing final product) and output (export of the final product)

In nut shell, both the input and output price will increase.

E-Wisdom, a publishing company, implements a new business strategy to keep both talent and information within the organization by creating their own content instead of outsourcing it. In the given scenario, which of the following factors has most likely influenced the company's new business strategy?
a. The potential for role ambiguity
b. The potential for data loss
c. The potential for employee burnout
d. The potential for intragroup conflict

Answers

Answer:

B: poten of data loss

Explanation:

Suppose that a consumer has an initial endowment of 48.00 eggs. He is able to sell these eggs freely on the market for $1.00 per egg, but has no other income. However, he still demands some eggs himself. His demand is given by the following equation:
x1 = 16.00+ m/4p1
The price for eggs increases to $2.00 per egg. Calculate this consumer's endowment income effect.

Answers

Answer and Explanation:

The computation of the consumer's endowment income effect is as follows:

But before that following calculations must be done

Beginning value of the endowment,

m = 48 × 1

= 48

Now New value of endowment,

m' = 48 × new price

= 48 × 2

= 96

so,

Consumer's endowment income effect is

= x1(p1', m') - x1(p1', m)

= 28 - 22

= 6 eggs.

Working notes:

(x1(p1', m') is

= 16 + (96 ÷ 4 × 2)

= 16 + (96 ÷ 8)

= 16 + 12

= 28

And, x1(p1', m) is

= 16 + (48 ÷ 4 × 2)

= 16 + (48 ÷ 8)

= 16 + 6

= 22

The ABC Lawn Company aims for a high number of clients that result in high profits. To meet its goal ABC markets its landscaping service vigorously because there are many lawn services and nurseries in the local community. As a sales-oriented company, ABC focuses on _______.

Answers

Answer:

Agressive trading technique

Explanation:

A Sales Orientation company is a company that capitalizes or dwell on selling its products and services rather than satisfying their customers wants or needs. Due to the fact that sales orientation business is bent on pushing their product out to the customer it use or employ aggressive techniques in its handling, and this will cost or involves intensive promotions and price- strategy.

Aggressive trading shoulders more risk and thereafter may be accepting a big loss.

During Year 3, Rex Co. introduced a new product carrying a 2-year assurance-type warranty against defects. The estimated warranty costs related to dollar sales are 2% within 12 months following sale and 4% in the second 12 months following sale. Sales and actual warranty expenditures for year ended December 31, Year 3 and Year 4, are as follows:

Year Sales Actual Warranty Expenditures

2008 $250,000 $2,250
2009 250,000 7,500
Total $500,000 $9,750

What amount should Gum report as estimated warranty liability on its December 31, 2009 balance sheet?

Answers

Answer:

the amount that should reported as the estimated liability is $20,250

Explanation:

The computation of the amount that should reported as the estimated liability is as follows:

= Total sales × total percentage - total actual warranty expenditure

= $500,000 × 6% - $9,750

= $30,000 - $9,750

= $20,250

Hence, the amount that should reported as the estimated liability is $20,250

You have decided to invest $15,000 in a money market fund that pays you interest at the annual rate of 6% and compounds interests monthly. Your plan is to take out your money in a year and pay taxes on the interest earned. If the corresponding tax rate is 20%, how much money in total will you expect to receive in a year after paying taxes.

Answers

Answer:

$15,869.66

Explanation:

The formula for determining the future value of the amount invested is :

FV = PV x (1 + r / m)^mn

FV = Future value  

PV = Present value  

R = interest rate  

N = number of years

m = number of compounding

$15,000 x (1+ 0.06/12)^12 = $15,925.17

Interest earned = future value - present value

$15,925.17 - $15,000 = $925.17

Tax paid on interest earned = 0.06 x  $925.17 = $55.51

Interest after taxes = $925.17 - $55.51 = $869.66

Total amount expected = $15,000 + $869.66 = $15,869.66

Sales revenue $944,200 Less: Cost of goods sold 598,100 Gross profit 346,100 Less: Operating expenses (includes depreciation expense and bad debt expense) 248,500 Income from operations 97,600 Other revenues and expenses Gain on sale of investments $14,900 Loss on sale of equipment (2,900 ) 12,000 Income before taxes 109,600 Income taxes 45,200 Net income $64,400 (a) Compute net cash provided by operating activities under the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net cash flow from operating activities

Answers

Answer:

$500

Explanation:

Net cash flow from operating activities is $500

1. Friedman distinguishes between the two concepts that (a) businesses really do act in ways to maximize profit and (b) businesses have a moral responsibility (or, as he puts it, a social responsibility) to act to maximize profit. How does he defend the latter position? (See both the Friedman and Sandbu readings)

Answers

Explanation:

Friedman defends the position that companies have a social responsibility to act to maximize profit, in the sense that, the primary function of companies is to generate profit. The author goes against the growing opinions in society that companies must have social responsibility, that is, they need to create a positive and sensitive corporate image to please political and society interests and counter or even soften the words and actions its central purpose, which is profit generation. For him, social responsibility cannot be politicized in order to be an obligation of companies, as it limits freedom and interests arising from the business.

Parks Corporation is considering an investment proposal in which a working capital investment of $10,000 would be required. The investment would provide cash inflows of $2,000 per year for six years. The working capital would be released for use elsewhere when the project is completed. If the company's discount rate is 10%, the investment's net present value is closest to (Ignore income taxes.): Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.

Answers

Answer:

$4,355.26  

Explanation:

The net present value is the present value of future cash flows expected from the project minus the initial investment outlay

initial investment outlay=working capital investment = -$10,000

Years 1-5 cash inflow=$2,000

Year 6 cash inflow=normal cash inflows+release of working capital

Year 6 cash inflow=$2,000+$10,000=$12,000

the present value of a future cash flow=cash flow/(1+r)^n

n is 1 for year cash inflow 2 for year 2 cash inflow, 3 for year 3 cash inflow and so on

NPV=-$10,000+$2,000/(1+10%)^1+$2,000/(1+10%)^2+$2,000/(1+10%)^3+$2,000/(1+10%)^4+$2,000/(1+10%)^5+$12,000/(1+10%)^6

NPV=$4,355.26  

Below are certain events that took place at Hazzard, Inc., last year: Collected cash from customers. Paid cash to repurchase its own stock. Borrowed money from a creditor. Paid suppliers for inventory purchases. Repaid the principal amount of a debt. Paid interest to lenders. Paid a cash dividend to stockholders. Sold common stock. Loaned money to another entity. Paid taxes to the government. Paid wages and salaries to employees. Purchased equipment with cash. Paid bills to insurers and utility providers. Required: Indicate how each of the transaction would be classified on a statement of cash flows. Place an X in the Operating, Investing, or Financing column as appropriate.

Answers

Answer:

Events                                                            Operating Investing Financing

a. Paid cash to repurchase its own stock.                                              X

b. Borrowed money from a creditor.                                                       X

c. Paid suppliers for inventory purchases.            X

d. Repaid the principal amount of a debt.                                              X

e. Paid interest to lenders.                                     X

f. Paid a cash dividend to stockholders.                                                 X

g. Sold common stock.                                                                             X

h. Loaned money to another entity.                                         X

i. Paid taxes to the government.                             X

j. Paid wages and salaries to employees.              X

k. Purchased equipment with cash.                                          X  

l. Paid bills to insurers and utility providers.           X

Joe wants to open a restaurant and feels his best chance of being successful would be to purchase the rights to a well-known restaurant concept. This form of restaurant ownership is known as which of the following?

Food service corporation

Food service franchise

Independent food service operation

Food service chain

Answers

Answer:

Food-service franchise

Explanation:

A food-service franchise is a business arrangement where an established and successful restaurant allows the opening of an independent branch under its brand name. The new branch will be similar to the other existing branches in terms of appearance, products and services, operations, and pricing.

For an entrepreneur to open a food service franchise, they need to purchase a license from the franchisor. The franchise license increases the chances of success as customers are already familiar with the brand.

Marcus was offered a job as a senior manager by Super Corp. The offer, which was made over the phone, was for a three-year contract for $120,000 salary per year. Marcus orally accepted, there was no writing. The state in which Marcus was offered the job requires that such contracts be in writing. Marcus quit his current job, which paid $75,000 a year, and headed to the state where Super Corp was headquartered. When he arrived, the director at Super Corp who had originally offered him the job said that they were revoking and that there was no contract, as Marcus never signed an employment agreement. If Marcus sues Super Corp, what is the likely result

Answers

,Answer:

-Marcus is owed something by Super Corp because he relied reasonably and to his detriment on Super Corp's offer.

Explanation:

Employment contracts can be written, oral, or implied and each of these are binding to some extent.

In the given instance it is required that employment should be written in the state where Super Corp operates.

So Marcus will not be able to compel them to give him a job as the offer was made and accepted orally.

However the offer resulted in him quitting his current job, which paid $75,000 a year, and heading to the state where Super Corp was headquartered.

He relied on the offer to his detriment of losing his current job, so Super Corp owes him for the damages incurred

Prepare Krum Co.'s journal entries to record the following transactions involving its short-term investments in available-for-sale debt securities, all of which occurred during the current year. a. On August 1, paid $70,000 cash to purchase Houtte's 11%, six-month debt securities ($70,000 principal), dated August 1. b. On October 30, received a check from Houtte for 90 days' interest on the debt securities in transaction a

Answers

Answer and Explanation:

The journal entries are shown below:

On Aug 1

Short­-term investments $70,000  

        To Cash $70,000

(Being the short term investment is recorded)

Here short term investment is debited as it increased the asset and credited the cash as it decreased the asset

On Oct 30

Cash ($70,000 × 11% × 90 days ÷ 360 days) 1,925  

       To Interest revenue $1,925

(Being the interest revenue is recorded)

here cash is debited as it increased the asset and credited the interest revenue as it also increased the revenue

Here we assume 360 days in a year

Fran Bowen created the following budget: Budget Food $ 364 Clothing $ 164 Transportation 408 Personal expenses and recreation 307 Housing 994 She actually spent $331 for food, $416 for transportation, $1,046 for housing, $161 for clothing, and $259 for personal expenses and recreation. Calculate the variance for each of these categories, and indicate whether it was a deficit or surplus.

Answers

Answer:

Fran Bowen

Budget Vs Actual, Variance and Status:

                                                      Budget     Actual   Variance  Status

Food                                                $ 364     $331         $33        Surplus

Clothing                                               164       161              3        Surplus

Transportation                                   408       416            -8        Deficit

Personal expenses and recreation  307      259           48        Surplus

Housing                                             994    1,046          -52       Deficit

Total                                             $2,237  $2,213         $24       Surplus

Explanation:

a) Data and Calculations:

                                                      Budget     Actual   Variance  Status

Food                                                $ 364     $331         $33        Surplus

Clothing                                               164       161              3        Surplus

Transportation                                   408       416            -8        Deficit

Personal expenses and recreation  307      259           48        Surplus

Housing                                             994    1,046          -52       Deficit

Total                                             $2,237  $2,213         $24       Surplus

b) The difference between the estimated budget cost and the actual cost spent on each item gives rise to either surplus or deficit.  This surplus or deficit is described as the variance.  It is surplus when the budgeted cost is greater than the actual cost spent.  It is deficit when the budgeted cost is less than the actual cost spent.

Marge owns land and a building (held for investment) with an adjusted basis of $75,000 and a fair market value of $250,000. The property is subject to a mortgage of $400,000. Because Marge is in arrears on the mortgage payments, the creditor is willing to accept the property in return for canceling the amount of the mortgage.
a. How can the adjusted basis of the property be less than the amount of the mortgage?
b. If the creditor's offer is accepted, what are the effects on the amount realized, the adjusted basis, and the realized gain or loss for Marge?
c. Does it matter in (b) if the mortgage is recourse or nonrecourse?

Answers

Answer:

A. The amount deducted for Depreciation may be higher than the amortized amount of the mortgage principal.

Decrease in the value of the property after they granted the mortgage

Bi $400,000

ii. $75,000

iii. $325,000

C.No

Explanation:

a. The adjusted basis of the property can be tend to be lesser than the amount of the mortgage due to the fact that in the beginning of an asset life the amount that was deducted for Depreciation may be more higher than the amortized amount of the mortgage principal .

Secondly the adjusted basis of the property can be tend to be lesser than the amount of the mortgage when their is Decrease in the value of the property after they granted the mortgage .

Lastly the adjusted basis of the property can be tend to be lesser than the amount of the mortgage when the fair market value of Property are been given instead of the Adjusted basis of the property.

b. Calculation for the effects on the amount realized, the adjusted basis, and the realized gain or loss for

i. Based on the information given the amount that was realized will be the amount of $400,000

ii. Based on the information given the Adjusted basis will be the amount of $75,000

iii. Realized gain=$400,000 − $75,000

Realized gain= $325,000

c.No it don't not matter if the mortgage is recourse or nonrecourse since the amount that was realized was the amount of $400,000 and

to justify the nonrecourse mortgage is that the taxpayer has already enjoy some benefit when the mortgage was acquired due to the increase in Adjusted basis of the property.

Melissa is an unmarried person who earns a salary of $54,000 per year and has $500 of interest income. Her itemized deductions total $2,500. She is able to use a non-refundable credit of $400. She has $5,000 of federal income taxes withheld from her wages. What is the amount of Melissa's REFUND OR TAX DUE FOR 2020

Answers

Answer:

$6150

Explanation:

These are the details of Melissa's income

Salary = $54000

Interest income = 500

Itemized deductions = $ 2500

Non refundable credit = $400

Withheld federal income tax = $5000

We have to calculate the amount of her tax return for year 2020

Taxable income = 54000+500-2500

= $52500

Tax rate 22%

Tax on taxable income = 52500x0.22

= 11550

Minus non refundable credit = 11550-400

Minus federal tax withheld = 11550-400-5000

= $6150

Emilio’s accountant told him that if he continues to pay $50 a month on his credit card, it will take him 42 years to pay off his current balance (assuming the interest rate doesn’t change and assuming he doesn’t charge anything else on that card). His credit card interest rate is 18.99%. What is his balance?

Answers

Answer:

$3,158.40  

Explanation:

The current balance on his credit card is the present value of $50 payable per month over 42-year period as shown below:

PV=monthly payment*(1-(1+r)^-n/r

PV=the unknown

montly paymet=$50

r=monthly interest rate= 18.99%/12=0.015825

n=number of monthly payments=42*12=504

PV=$50*(1-(1+0.015825)^-504/0.015825

PV=$50*(1-(1.015825)^-504/0.015825

PV=$50*(1-0.000365827)/0.015825

PV=$50*0.999634173/0.015825

PV=$3,158.40  

Kilt Company used a predetermined overhead rate of $41 per direct labor hour for the year and estimated that direct labor hours would total 6,100 hours. Assume the only inventory balance is an ending Work in Process balance of $17,700. How much overhead was applied during the year

Answers

Answer:

$205,000

Explanation:

The above is an incomplete question as we were not given actual direct labor hours. From a similar question, I picked 5,000 as the direct labor hours .

With regards to the above information, applied overhead is computed as;

Applied overhead = Overhead rate × Actual direct labor hour

Given that;

Overhead rate = $41

Actual direct labor hour = 5,000

Therefore,

Applied overhead = $41 × 5,000 = $205,000

Outline the process the raw ingredients for a single flavor of ice cream might undergo to get to a local grocery’s freezer case.

Answers

Answer: fermenting , shredding , pasteurizing

Dell is undergoing a major expansion. The expansion will be financed by issuing new 15-year, $1,000 par, 9% annual coupon bonds. The market price of the bonds is $1,070 each. Dell's flotation expense on the new bonds will be $50 per bond. Dell's marginal tax rate is 35%. What is the pre-tax cost of debt for the newly-issued bonds

Answers

Answer:

8.76%

Explanation:

The computation of the pre-tax cost of debt is as follows:

Market price of the bond is

= $1,070 - $50

= $1,020

Coupon payment = Face value × Annual coupon rate

= $1,000 × 9%

= $90

Now YTM would be

Given that

NPER = 15

PMT = $90

PV = $1,020

FV = $1,000

The formula is given below:

=RATE(NPER;PMT;-PV;FV;TYPE)

After applying the above formula, the yield to maturity is 8.76%

An Argentinian economist pointed out that the inflation rate based on the PCE(personal consumption expenditures) deflator was higher than the inflation rate you calculated in part (b) based on the GDP deflator. Provide two possible explanations for this difference between the inflation rates calculated from the PCE deflatorversus the GDP deflator.

Answers

Answer:

Note: The complete question is attached as picture below

Year       Nominal GDP   Real GDP

2019             100                    100

2020            105                     99

a) %change in nominal GDP = [(105 - 100) / 100] * 100 = 5%

%change in real GDP = [(99 - 100) / 100] * 100 = -1%

b) GDP deflator is = [Nominal GDP / Real GDP]. %change in GDP deflator = [(106.06 - 100) / 100] * 100 = 6.06%

c) Inflation calculated from GDP deflator and PCE is different because

- GDP deflator does not includes price increase of imported goods while PCE does.

- PCE measures change in price of goods which are generally consumed by consumers while GDP deflator includes all goods produced in an economy.

Adidea Corp. regularly buys merchandise from vendors. It just purchased 1,000 units on credit from one of its vendors. How will the company record this transaction?

The company will record the purchase as a debit to the inventory account and a credit to the ________ account.

Answers

Answer:

Vendor's account/ accounts payable

Explanation:

Merchandise is an asset to the company. An increase in assets is debited to that particular merchandise or inventory account.

Since the merchandise was bought on credit, liabilities will increase. An increase in liabilities is credited to the specific vendor's account who supplied the goods on credit.

You purchased a 5-year, 6% annual-coupon bond with $1,000 par value. The yield to maturity at the time of purchase was 4%. You sold the bond after one year, right after receiving the first coupon payment. The bond's yield to maturity was 3.4% when you sold it. What is your holding period return on the bond

Answers

Answer:

6.12%

Explanation:

the market value of the bond when you purchased it was:

PV of face value = $1,000 / 1.04⁵ = $821.93

PV of coupon payments = $60 x 4.4518 (PV annuity factor, 4%, 5 periods) = $267.11

initial investment = $1,089.04

after 1 year, you receive $60 +

PV of face value = $1,000 / 1.034⁴ = $874.82

PV of coupon payments = $60 x 3.6818 (PV annuity factor, 3.4%, 4 periods) = $220.91

market price = $1,095.73

total holding return = ($1,095.73 + $60 - $1,089.04) / $1,089.04 = 6.12%

What type of hazard could occur by wearing jewelry while preparing food

Answers

Answer:

it can fall into the food

Suppose that it costs $1.50 to download a song. How many songs will Ray choose to download per
month?

Answers

Answer:

18

Explanation:

1.50x12=18

At December 31, 2017, Ayayai Corporation has the following account balances: Bonds payable, due January 1, 2021$6,500,000 Premium on bonds payable132,000 Interest payable290,000 Show how the above accounts should be presented on the December 31, 2017, balance sheet, including the proper classifications. (Enter account name only and do not provide descriptive information.)

Answers

Answer:

See below

Explanation:

Balance sheet as at December 31, 2017

Current liabilities

Bond interest payable

$290,000

Long term liabilities

Bonds payable

$6,500,000

Less: premium on bonds payable

($132,000)

Net bonds payable

$6,368,000

Binder Corporation agreed to build a warehouse for a client at an agreed contract price of $4,000,000. Expected (and actual) costs for the warehouse follow: 2017, $640,000; 2018, $1,600,000; and 2019, $800,000. The company completed the warehouse in 2019. Compute net income for each year 2017 through 2019 using the cost-to-cost method. a. 2017: $200,000 2018: $520,000 2019: $240,000 b. 2017: $640,000 2018: $1,600,000 2019: $800,000 c. 2017: $0 2018: $0 2019: $960,000 d. 2017: $320,000 2018: $320,000 2019: $320,000

Answers

Answer:

The correct option is a. 2017: $200,000 2018: $520,000 2019: $240,000.

Explanation:

The formula for cost to cost method is expected or actual cost incurred to date divided by the total cost of the project or contract.

Therefore, we have:

Total cost = Cost in 2017 + Cost in 2018 + Cost in 2019 = $640,000 + $1,600,000 + $800,000 = $3,040,000

Cost in 2017 contribution to total cost = Cost in 2017 / Total cost = $640,000 / $3,040,000 = 0.21

Cost in 2018 contribution to total cost = Cost in 2018 / Total cost = $1,600,000 / $3,040,000 = 0.53

Cost in 2019 contribution to total cost = Cost in 2019 / Total cost = $800,000 / $3,040,000 = 0.26

Revenue in 2017 = Cost in 2017 contribution to total cost * Contract price = 0.21 * $4,000,000 = $840,000

Revenue in 2018 = Cost in 2018 contribution to total cost * Contract price = 0.53 * $4,000,000 = $2,120,000

Revenue in 2019 = Cost in 2019 contribution to total cost * Contract price = 0.26 * $4,000,000 = $1,040,000

Therefore, net income for each year 2017 through 2019 using the cost-to-cost method can be computed as follows:

Net income for year 2017 = Revenue in 2017 - Cost in 2017 = $840,000 - $640,000 = $200,000

Net income for year 2018 = Revenue in 2018 - Cost in 2018 = $2,120,000 - $1,600,000 = $520,000

Net income for year 2019 = Revenue in 2019 - Cost in 2019 = $1,040,000 - $800,000 = $240,000

Therefore, the correct option is a. 2017: $200,000 2018: $520,000 2019: $240,000.

Answer:

Eet

Explanation:

Baxter Inc. has a target capital structure of $30 million debt, $15 million preferred stock, and $55 million common equity. The company's after-tax cost of debt is 7%, its cost of preferred stock is 11%, its cost of retained earnings is 15%, and its cost of new common stock is 16%. The company stock has a beta of 1.5 and the company's marginal tax rate is 35%. What is the company's weighted average cost of capital if retained earnings are used to fund the common equity portion

Answers

Answer:

12%

Explanation:

Weighted Average Cost of Capital = Weight of Equity * Cost of Equity + Weight of Preferred Stock * Cost of Preferred Stock + Weight of Debt * Cost of Debt

Particluars                Weights (given)          Cost             Weights*Cost

Common stock           55% or 0.55               16%                  = 8.8 %

Debt                            30 % or 0.30              7% (after tax)   = 2.1 %

Preferred Stock           15 % or 0.15               7.15 % =             1.0725 %

                                         WACC                                               12 %

Check the correct category for each of the following items. Note: for purposes of this exercise, consider cash in and out for this couple regardless of whether the item is for personal or business use. Cash In/Income Cash Out/Expense Cost of business trip State tax liability Clothing purchases Once expenses have been identified, they can be categorized as either fixed expenses or variable expenses. For example, your mortgage would be considered a expense, because . Conversely, grocery bills would be considered , because the actual amount is

Answers

Answer:

1. The correct category for each of the following items:

Cash In/Income:

Personal income

Business Income

Cash Out/Expense:

Cost of business trip = variable

State tax liability = fixed

Clothing purchases = variable

2. For example, your mortgage would be considered a fixed expense, because the total amount does not vary.  Conversely, grocery bills would be considered variable, because the actual amount is not fixed but varies.

Explanation:

Variable cost or expense has a fixed cost per unit, with the total amount varying, depending on the units or quantities consumed.  Fixed cost does have a fixed total amount within the relevant range, but the cost per unit varies.

The following transactions occurred during the month of June 2021 for the Stridewell Corporation. The company owns and operates a retail shoe store.Issued 100,000 shares of common stock in exchange for $500,000 cash.Purchased office equipment at a cost of $100,000. $40,000 was paid in cash and a note payable was signed for the balance owed.Purchased inventory on account at a cost of $200,000. The company uses the perpetual inventory system.Credit sales for the month totaled $280,000. The cost of the goods sold was $140,000.Paid $6,000 in rent on the store building for the month of June.Paid $3,000 to an insurance company for fire and liability insurance for a one-year period beginning June 1, 2021.Paid $120,000 on account for the merchandise purchased in 3.Collected $55,000 from customers on account.Paid shareholders a cash dividend of $5,000.Recorded depreciation expense of $2,000 for the month on the office equipment.Recorded the amount of prepaid insurance that expired for the month.

Answers

Answer:

Sew below

Explanation:

Sidwell

Debit Cash account $500,000

Credit Common stock $625,00

To record the issue of 100,000 shares for cash

Debit office equipment $100,000

Credit cash account $40,000

Credit notes payable $60,000

To record the purchase of office equipment

Debit inventory $200,000

Credit Accounts payable $200,000

To record the purchase of inventory

Debit Accounts receivables $280,000

Credit Sales revenue $280,000

To record the sales of goods on account

Debit Cost of goods sold $140,000

Credit Inventory $140,000

To record the cost of goods sold

Debit rent expenses $6,000

Credit cash account $6,000

To record the payment of rent for the month

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