Answer: large numbers of users, including operational staff
Explanation:
Active Data Warehousing refers to the technical ability that can be used in the capture of transactions when change occurs and then integrating them into the warehouse.
The traditional data warehouses uses on-premise IT resources like software and servers in order to deliver Data Warehouse functions.
The statement that's more descriptive of active data warehouses in contrast with traditional data warehouses is the large numbers of users, including operational staff.
Answer:
.C) large numbers of users, including operational staffs
Explanation:
The traditional Data Warehouse works through the
availability of on-premise IT resources like servers as well as software to carry out Data Warehouse functions. All firms that runs on-premise Data Warehouses needs to manage their infrastructure effectively.
Active Data Warehouse can be regarded as type of ware house that requires technical ability which involves capturing of transactions whenever they change,then integrate them back into the warehouse as well as maintaining batch or scheduled cycle refreshes
It should be noted that in description of
active data warehouses in contrast with traditional data warehouses there is large numbers of users, including operational staffs.
a reward or benefit meant to encourage specific economic behavior is a
Answer:
incentive
Explanation:
Information for Pidris Metalworks as of December 31 follows. Prepare (a) the company's schedule of cost of goods manufactured for the year ended December 31; (12 Points).(b) prepare the company's income statement that reports separate categories for selling and general and administrative expenses. (12 Points).
Answer: hello your question is incomplete attached below is the missing data. ( first image )
answer:
Attached below
Explanation:
A) company's schedule of cost of goods manufactured for year ended
attached below is the required schedule ( second Image )
B) Company's income statement
attached below is the company's income statement ( Image 3 and 4 )
When the Jones were shopping for their present home, the asking price from the previous owner was $375,000.00. The Jones had decided they would pay no more than $365,000.00 for the house. After negotiations, the Jones actually purchased the house for $350,000.00. They, therefore, enjoyed a consumer surplus of
Answer:
$15,000
Explanation:
Calculation to determine the consumer surplus
Consumer surplus=$365,000.00-$350,000.00
Consumer surplus=$15,000
They, therefore, enjoyed a consumer surplus of $15,000
Information related to Kerber Co. is presented below.
1. On April 5, purchased merchandise from Wilkes Company for $23,000, terms 2/10, net/30, FOB shipping point.
2. On April 6, paid freight costs of $900 on merchandise purchased from Wilkes.
3. On April 7, purchased equipment on account for $26,000.
4. On April 8, returned damaged merchandise to Wilkes Company and was granted a $3,000 credit for returned merchandise.
5. On April 15, paid the amount due to Wilkes Company in full.
Collapse question
Prepare the journal entries to record these transactions on the books of Kerber Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
No. Date Account Titles and Explanation Debit Credit
1. April 5April 6April 7April 8April 15
2. April 5April 6April 7April 8April 15
3. April 5April 6April 7April 8April 15
4. April 5April 6April 7April 8April 15
5. April 5April 6April 7April 8April 15
Answer:
Date Account titles & Explanation Debit Credit
Apr-05 Merchandise Inventory $23,000
Accounts Payable $23,000
Apr-06 Merchandise Inventory $900
Cash $900
Apr-07 Equipment $26,000
Accounts Payable $26,000
Apr-08 Accounts Payable $3,000
Merchandise Inventory $3,000
Apr-15 Accounts Payable $20,000
($23,000-$20,000)
Merchandise Inventory $400
($20,000*2%)
Cash $19.600
Recycling is Primarily an example of a issue facing businessess.
a. human resource
b. natural resource
c. ethical
d. social
The title is in the picture
$1,000 par value zero-coupon bonds (ignore liquidity premiums) Bond Years to Maturity Yield to Maturity A 1 6.00% B 2 7.50% C 3 7.99% D 4 8.49% E 5 10.70% One year from now bond C should sell for ________ (to the nearest dollar).
Answer:
$842
Explanation:
The computation of the One year from now bond C should sell is shown below;
But before that we have to determined the expected yield to maturity for bond C in one year :
So,
1.0799^3 = 1.06 x (1 + r)^2
1.188 = (1 + r)^2
√1.188 = √(1 + r)^2
1.08999 = 1 + r
r = 0.08999
= 9%
Now
the yield to maturity = (future value ÷ present value)^0.5 - 1
0.09 + 1 = ($1,000 ÷ value in 1 year)^0.5
1.09 = ($1,000 ÷ value in 1 year)^0.5
1.09^2 = $1,000 ÷ value in 1 year
So,
value in 1 year is
= $1,000 ÷ 1.09^2
= $1,000 ÷ 1.1881
= $841.68
≈ $842
Bundling:__.
A. is illegal in most U.S. states.
B. increases transaction costs for consumers.
C. is when firms sell multiple separate goods together for a single price.
D. is where a firm wraps its fragile goods in special packaging and charges a higher price than if the goods are put into regular packaging.
Answer:
c
Explanation:
Bundling is when separate products of a company are combined together and sold to customers usually at a lower price
Q1. What is recruitment? Explain 5 commonly used recruitment sources companies’ use?
Answer:
The top five most popular recruitment sources used by employers include (indicated by percentage of employers): General online job boards and websites (89%) Employee referrals (81%) Staffing agency or third-party recruiter (58%)
Explanation:
choose me to brainlist
Suppose that the price of a good decreased. The substitution effect shows the change in consumption for all goods in reaction to a change in _____________ relative prices income preferences holding _____________ purchasing power utility constant.
Answer:
The correct answer is "relative prices; utility". A further explanation is provided below.
Explanation:
The conditions of a connection or bond between variables customer demand or perhaps the proportion of such a given cost of production to the normal distribution of so many other products available throughout the marketplace.Individual's pleasure is usually measured by the consumption of that same goods and services.Thus the above is the correct answer.
Nexis Corp. issues 1,000 shares of $15 par value common stock at $22 per share. When the transaction is recorded, credits are made to:______.
a. Common Stock, $22,000, and Retained Earnings, $15,000
b. Common Stock, $22,000
c. Common Stock, $15,000, and Paid-In Capital in Excess of Par, $7,000
d. Common Stock, $7,000, and Paid-In Capital in Excess of Stated Value, $15,000
Answer: C. Common Stock, $15,000, and Paid-In Capital in Excess of Par $7,000
Explanation:
The journal entry that will be made for this transaction include:
Debit Cash $22,000
Credit Common Stock $15,000
Credit Paid-In Capital in Excess of Par $7,000
Therefore, the correct option is C
Ellen Co. has offered their customers a 1% discount off the amount owed if they pay within 15 days of receiving their bill. Handler Company owed Ellen Co. $2,185 as of May 1st and paid Ellen Co. on May 7th. How much cash did Handler Company send to Ellen Co. on May 7th?
Answer:
Money send to Ellen = $2163.15
Explanation:
Discount offered by the Ellen Co. = 1%
Owed amount = $2185
Since the amount is repaid within 15 days to the offer of a 1% discount will be applicable. So the Handler will send an amount that is 1% less than the actual amount.
Money send to Ellen = 2185 - (1% x 2185)
Money send to Ellen = $2163.15
Which of the following is an indirect manufacturing cost in a manufacturing company?
a. Indirect Materials
b. Real estate taxes on the factory
c. Salary of production floor manager
d. All of the above would be considered indirect manufacturing costs
Answer:
d
Explanation:
Indirect costs are costs of production that cannot be directly linked to a unit, activity or product.
Indirect manufacturing costs are cost of production that cannot be directly linked to a good that is produced.
Examples of indirect manufacturing cost include :
Indirect Materialsutility machine maintenance Real estate taxes on the factoryDepreciation Salary of production floor managerThomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $840,000 of 25-year, 8% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year.
May 1 Issued the bonds for cash at their face amount.
Nov. 1 Paid the interest on the bonds.
Answer:
May 1
Dr Cash $840,000
Cr Bonds payable $840,000
Nov 1
Dr Interest expense $33,600
Cr Cash $33,600
Explanation:
Preparation of the journal entry to record May 1 Issued bonds for cash at their face amount
May 1
Dr Cash $840,000
Cr Bonds payable $840,000
Preparation of the journal entry to record Nov. 1 interest on the bonds.
Nov 1
Dr Interest expense $33,600
Cr Cash $33,600
(840,000*8%*6/12)
The following information is available for the Johnson Corporation:
Beginning inventory $27,000
Inventory purchases (on account) 157,000
Merchandise purchases (on account) 157,000
Freight charges on purchases (paid in cash) 12,000
Merchandise returned to supplier (for credit) 14,000
Ending inventory 32,000
Sales (on account) 252,000
Cost of merchandise sold 150,000
Required:
Applying both a perpetual and a periodic inventory system, prepare the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.
Answer:
Perpetual Inventory System:
1) Dr Inventory 157,000
Cr Accounts Payable 157,000
2) Dr Inventory 12,000
Cr Cash 12,000
3)Dr Accounts Payable 14,000
Cr Inventory 14,000
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
5) Dr Cost of Goods Sold 150,000
Cr Inventory 150,000
6) No entry
Periodic Inventory System:
1)Dr Purchases 157,000
Cr Accounts Payable 157,000
2) Dr Freight - in 12,000
Cr Cash 12,000
3) Dr Accounts Payable 14,000
Cr Purchase Returns 14,000
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
5) No entry
6) Dr Cost of Goods Sold 150,000
Dr Ending Inventory 32,000
Dr Purchase Returns 14,000
Cr Beginning Inventory $27,000
Cr Purchases 157,000
Cr Freight - in $12,000
Explanation:
Preparation of the journal entries that summarize the transactions that created these balances. Include all end-of-period adjusting entries indicated.
PERPETUAL INVENTORY SYSTEM:
1) Dr Inventory 157,000
Cr Accounts Payable 157,000
(To record the purchase of inventory on account)
2) Dr Inventory 12,000
Cr Cash 12,000
(To record the payment of freight charges by cash)
3)Dr Accounts Payable 14,000
Cr Inventory 14,000
(To record the return of inventory purchased on account)
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
(To record the sales made on account)
5) Dr Cost of Goods Sold 150,000
Cr Inventory 150,000
(To record the cost of goods sold)
6) No entry
PERIODIC INVENTORY SYSTEM:
1)Dr Purchases 157,000
Cr Accounts Payable 157,000
(To record the purchase of inventory on account)
2) Dr Freight - in 12,000
Cr Cash 12,000
(To record the payment of freight charges by cash)
3) Dr Accounts Payable 14,000
Cr Purchase Returns 14,000
(To record the return of inventory purchased on account)
4) Dr Accounts Receivable 252,000
Cr Sales Revenue 252,000
(To record the sales made on account)
5) No entry
6) Dr Cost of Goods Sold 150,000
Dr Ending Inventory 32,000
Dr Purchase Returns 14,000
Cr Beginning Inventory $27,000
Cr Purchases 157,000
Cr Freight - in $12,000
(To record the adjusting entry for inventory)
A bank has $132,000 in excess reserves and the required reserve ratio is 11 percent. This means the bank could have __________ in checkable deposit liabilities and __________ in (total) reserves. Group of answer choices $5,000,000; $5,869,000 $1,000,000; $110,000 $4,000,000; $590,000 $4,700,000; $869,000
Answer:
$14,520 in check-able deposit liabilities and $117,480 in total reserves.
Explanation:
The bank has $132,000 in excess reserves and excess reserves ratio is 11%. The bank will have total reserves of $132,000 * 89% = $117,480. The total liabilities will be equivalent to the excess reserves which is $14,520 [$132,000 - $117,480].
Xlon Co budgets a seling price of $ 86 per unit , varlable costs of $ 34 per unit , and total fixed costs of $ 286,000 . During June , the company produced and sold 12,400 units and incurred actual variable costs of $ 367,000 and actual fixed costs of $ 301,000 . Actual sales for June were $ 1,100,000 . Prepare a flexible budget report showing variances between budgeted and actual results . List variable and fixed expenses separately . ( Indicate the effect of each variance by selecting for favorable , unfavorable , and no variance )
Answer and Explanation:
The preparation of the flexible budget report is presented below;
Particulars Flexible budget Actual sales Variance fav or unfav
Sales $1,066,400 $1,100,000 $33,600 favorable
Less:
Variable expense $421,600 $367,000 $54,600 favorable
Contribution margin $644,800 $733,000 $88,200 favorable
Less:
Fixed expense $286,000 $301,000 $15,000 unfavorable
Net operating income $358,800 $432,000 $73,200 favorable
Of what use is the statement of cash flows?
Answer:
The purpose of the statement of cash flows is to present cash inflows and outflows for a reporting period to the reader of the report. These inflows and outflows are further classified into operating, investing, and financing activities.
A flexible expense and a periodic expense are basically the same thing. True or false
the answer of the question is true
A market Group of answer choices always requires face-to-face contact between buyer and seller. reflects upsloping demand and downsloping supply curves. is an institution that brings together buyers and sellers. entails the exchange of goods, but not services.
Answer:
Option C "is an........sellers" is the right answer.
Explanation:
The market is considered as a location wherever vendors as well as purchasers gather together or enable their exchange of goods and commodities of products or even just providers.It could be like a department shop wherever individuals keep in touch throughout real life or virtually like such an internet market, where other businesses and consumers weren’t directly connected.The provided situation isn't linked to other alternatives. Thus the above response is the right one.
Read each scenario, decide whether the company is using Cash basis or Accrual basis, and then enter your answer to the question.
The Purple Tulip Law Firm prepays for advertising in the local newspaper. On January 1, the law firm paid $790 for six months of advertising. Purple Tulip Law Firm recorded $790 in the Prepaid Advertising account.
If Purple Tulip Law Firm had recorded their expenses using the other method, how much advertising expense would they have recorded for the two months ending February 28?
Sweet Catering completed the following selected transactions during May 2016:
May 1: Prepaid rent for three months, $2,100
May 5: Received and paid electricity bill, $90
May 9: Received cash for meals served to customers, $2,520
May 14: Paid cash for kitchen equipment, $3,770
May 23: Served a banquet on account, $1,900
May 31: Made the adjusting entry for rent (from May 1).
May 31: Accrued salary expense, $2,290
May 31: Recorded depreciation for May on kitchen equipment, $560 If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May?
If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May?
Answer:
1. Cash Basis $790
Accrual basis $263
2. Cash method $(3,440)
Accrual method $780
Explanation:
1. Calculation to determine how much advertising expense would they have recorded for the two months ending February 28
UNDER THE CASH BASIS, the Law Firm will record $790 of advertising expense for the two months ending February 28.
UNDER THE ACCRUAL BASIS, the Law Firm will record $263 ($790/6*2) of advertising expense for the two months ending February 28.
Therefore the amount of advertising expense l would they have recorded for the two months ending February 28 is:
Cash Basis $790
Accrual basis $263
2a. Calculation to determine how much net income (loss) would they have recorded for the month of May If Sweet Catering had recorded transactions using the Cash method
Using this formula
Net income (loss) using cash method = Meals served to customer – Rent paid – Electricity bill – Cash paid for kitchen equipment
Let plug in the formula
Net income (loss) using cash method= $2,520 -$2,100-$90-$3,770
Net income (loss) using cash method= $(3,440)
Therefore If Sweet Catering had recorded transactions using the Cash method, how much net income (loss) would they have recorded for the month of May is $(3,440)
2b. Calculation to determine how much net income (loss) would they have recorded for the month of May If Sweet Catering had recorded transactions using the Accrual method
Using this formula
Net income (loss) using accrual method = Meals served to customer+ Served a banquet on account – Rent expense – Electricity bill – Salary expense – Depreciation
Let plug in the formula
Net income (loss) using accrual method= $2,520+$1,900-($2,100/3)-$90-$2,290-$560
Net income (loss) using accrual method=$2,520+$1,900-$700-$90-$2,290-$560
Net income (loss) using accrual method=$780
Therefore If Sweet Catering had recorded transactions using the Accrual method, how much net income (loss) would they have recorded for the month of May is $780
Swifty Corporation has beginning work in process inventory of $128000 and total manufacturing costs of $277000. If cost of goods manufactured is $280000, what is the cost of the ending work in process inventory?
a. $125000
b. $131000.
c. $140000.
d. $110000.
Answer:
a. $125000
Explanation:
Calculation to determine the cost of the ending work in process inventory
Beginning work in process inventory $128000
Add total manufacturing costs $277000
Less cost of goods manufactured $280000
Ending work in process inventory $125000
($128000+$277000-$280000)
Therefore the cost of the ending work in process inventory is $125000
The units of Manganese Plus available for sale during the year were as follows:
Mar. 1 Inventory 22 units $29
June 16 Purchase 31units $20
Nov. 28 Purchase 46 units $39
There are 14 units of the product in the physical inventory at November 30. The periodic inventory system is used. Determine the inventory cost in (a) FIFO, (b) LIFO, and (c) average cost methods.
Answer and Explanation:
The computation of the ending inventory by following methods are
a. Under FiFO
= 14 units at $39
= $546
b. Under LIFO
= 14 units at $29
= $406
c, Under average cost method
But before that the average cost per unit should be determined
= (22 units at $29 + 31 units at $20 + 46 units at $39) ÷ (22 units + 31 units + 46 units)
= ($638 + $620 + $1,794) ÷ (99 units)
= $30.83
Now the ending inventory is
= $30.83 × 14 units
= $431.62
= $432
XYZ segmented last year's income statement into its ten product lines. The CEO is curious as to what effect dropping one product line at the beginning of last year would have had on overall company profit. What is the best number to look at to determine the effect of this elimination on the net operating income of the company as a whole?
A) the product line's sales dollars.
B) the product line's contribution margin.
C) the product line's segment margin.
D) the product line's segment margin minus an allocated portion of common fixed expenses.
Answer:
Option c: The product line's segment margin
Explanation:
Net Operating Income
This is often regarded as the
adjusted Effective Gross Income (EGI) adjusted for annual operating expense and capital expenditures of a firm/organization
Net Operating Income Equation
(sales - variable expenses) - fixed expenses
Segment margin
The product line segment margin is usually said to be obtainable through the act of deduction of the traceable fixed costs of a segment from the segment's contribution margin. It shows or entails the margin at hand after a segment has covered all of its own costs. Itis the best gauge of the long-run profitability of a segment as it includes only those costs that are caused by the segment.
Segment margin formula
Contribution Margin - Traceable fixed costs
Current interest rates are 8%. You want to buy a long-term bond with a face value of $1000 that pays a coupon rate of 10%. Which of the following prices is feasible?
a. $888.88
b. $1,000.00
c. $1,111.11
d. Not enough information to answer.
e. None of the above is feasible.
Answer: c. $1,111.11
Explanation:
When a bond's coupon rate is higher than the prevailing interest rate, the bond will be more sought after because it is paying more than the market is paying. As a result, the price of the bond will be higher than its par value to reflect the increased demand for it.
In other words, when a bond coupon rate is higher than the interest rate, the price will be higher than par. This is the case here so the bond will be selling at a higher price than $1,000 and the only option higher than $1,000 is option c at $1,111.11.
Journalize the following transactions.a. On December 1, $13,250 was received for a service contract to be performed from December 1 through April 30. b. Assuming the work is performed evenly throughout the contract period, journalize the adjusting entry required on December 31.
Answer:
hello didi the code on their own lives r
Answer:
On December 1
$18000 To unearned revenue AC
Explanation:
$18000÷5months
=$3600
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a. Raw materials purchased on account, $210,000.
b. Raw materials used in production, $190,000 ($152,000 direct materials and $38,000 indirect materials).
c. Accrued direct labor cost of $50,000 and indirect labor cost of $21,000.
d. Depreciation recorded on factory equipment, $104,000. Other manufacturing overhead costs accrued during October, $131,000.
f. The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,100 machine-hours were used in October.
g. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h. Jobs that had cost $453,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.
Required:
a. Prepare journal entries to record the information given above.
b. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant information above to each account. Compute the ending balance in each account, assuming that Work in Proccss has a beginning balance of $42,000.
Answer:
The Polaris Company
a. Journal Entries
a. Debit Raw materials $210,000
Credit Accounts Payable $210,000
To record the purchase of raw materials on account.
b. Debit Work in Process $152,000
Debit Manufacturing Overhead $38,000
Credit Raw materials $190,000
To record raw materials used in production as direct and indirect.
c. Debit Work in Process $50,000
Debit Manufacturing Overhead $21,000
Credit Payroll $71,000
To record the costs of direct labor and indirect labor.
d. Debit Manufacturing Overhead $104,000
Credit Depreciation on factory equipment, $104,000
To record the depreciation expense.
Debit Manufacturing Overhead $131,000
Credit Other Expense $131,000
To record other manufacturing overhead costs.
f. Debit Work in Process $380,500
Credit Manufacturing Overhead $380,500
To record manufacturing overhead applied at the rate of $5 for 76,100 DLHs.
g. Debit Finished Goods $514,000
Credit Work in Process $514,000
To record the cost of goods manufactured.
h. Debit Cost of Goods Sold $453,000
Credit Finished Goods $453,000
To record the cost of goods sold.
Debit Accounts Receivable $616,080
Credit Sales Revenue $616,080
To record the sale of goods on account at 36% above cost.
b. T-accounts:
Manufacturing Overhead
Account Titles Debit Credit
Raw materials $38,000
Indirect labor cost 21,000
Factory depreciation 104,000
Other expenses 131,000
Work in Process $380,500
Overapplied overhead 86,500
Work in Process
Account Titles Debit Credit
Beginning inventory $42,000
Raw materials 152,000
Direct labor cost 50,000
Overhead 380,500
Finished Goods $514,000
Ending inventory $110,500
Explanation:
a) Data and Analysis:
a. Raw materials $210,000 Accounts Payable $210,000
b. Work in Process $152,000 Manufacturing Overhead $38,000 Raw materials $190,000
c. Work in Process $50,000 Manufacturing Overhead $21,000 Payroll $71,000
d. Manufacturing Overhead $104,000 Depreciation on factory equipment, $104,000 Manufacturing Overhead $131,000 Other Expense $131,000
f. Work in Process $380,500 Manufacturing Overhead $380,500
g. Finished Goods $514,000 Work in Process $514,000
h. Cost of Goods Sold $453,000 Finished Goods $453,000
Accounts Receivable $616,080 Sales Revenue $616,080
Due to a turnover, a company hires 400 employees each year, on average. Assume that an average stay of an employee in the company is 5 years. On average, how many employees does the company have?
Answer:
On average, the company has 2000 employees.
Explanation:
Since, due to a turnover, a company hires 400 employees each year, on average; assuming that an average stay of an employee in the company is 5 years, to determine, on average, how many employees does the company have, the following calculation must be performed:
Year 0 = 0
Year 1 = 400 (+400)
Year 2 = 800 (+400)
Year 3 = 1200 (+400)
Year 4 = 1600 (+400)
Year 5 = 2000 (+400)
Year 6 = 2000 (+400 -400)
Year 7 = 2000 (+400 - 400)
Therefore, on average, the company has 2000 employees.
Iron Man Foundry produces multiple products, one of which is casting a hose nozzle. The daily demand for these nozzles is 1,000 units per day. If Iron Man currently operates one shift of eight hours what would be the Takt time
Answer: 0.48 minutes
Explanation:
Takt time = Net time available / Daily demand
Net time available is number of minutes in a shift so:
= 8 hours * 60 minutes
= 480 minutes
Daily demand = 1,000 units
Takt time = 480 / 1,000
= 0.48 minutes
On December 31, 2020, Marin Company borrowed $67,653 from Paris Bank, signing a 5-year, $114,000 zero-interest-bearing note. The note was issued to yield 11% interest. Unfortunately, during 2022, Marin began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would receive back only $85,500 at maturity. The market rate of interest on loans of this nature is now 12%.
Prepare the entry, if any, to record the impairment of the loan on December 31, 2022, by Paris Bank.
Answer:
Journal Entries
December 31, 2020
Dr. Note Receivables $114,000
Cr. Discount on bond $46,347
Cr. Cash $67,653
December 31, 2020
Dr. Impairment loss $20,839
Cr. Allowance for Impairment $20,839
Explanation:
Calculate the discount on the bond as follow
Discount on the bond = Face value of Note - Borrowed Amount = $114,000 - $67,653 = $46,347
On December 31, 2020 calculate the present value of face value of note and recoverable value
Present value of Note = Face value x Discount factor at 11% for 3 years = $114,000 x 1/( 1 + 11%)^3 = $83,355.82
Present value of recoverable value of note = Recoverable value of note x Discount factor at 11% for 3 years = $85,500 x 1/( 1 + 11%)^3 = $62,516.86
Now calculate the impairment loss as follow
Impairment loss = Present value of Note - Present value of recoverable value of note = $83,355.82 - $62,516.86 = $20,838.96 = $20,839
