you received to create an urgent presentation with predesigned and preinstalled elements. Which option will you use?

Kingbird Company had the following select transactions. Apr. 1.2022 Accepted Goodwin Company's 12-month, 8% note in settlen July

Bad White [126]

Answer:

4/1/22: Dr Notes Receivable x

Cr Cash x

(to record the acceptance of $x from Goodwin Company's note)

7/1/22: Dr Notes Receivable 22,000

Cr Cash 22,000

( to record the acceptance of $22,000 from Slocombe notes)

12/31/22: Dr Interest Receivable (x x 8%) x (9 : 12)

Cr Interest Income (x x 8%) x (9 : 12)

(to record interest accured from Goodwin Company's note)

Dr Interest Receivable 1,210

Cr Interest Income 1,210

(to recored interest accured from Slocombe notes which is calculated as: 22,000 x 11% x (6/12) =1,210)

4/1/23: Dr Cash x

Cr Notes Receivable x

(to record collection of principle from Goodwin's note)

Dr Cash ( x x 8%)

Cr Interest Receivable (x x 8%) x (9 : 12)

Cr Interest Income (x x 8%) x (3 :12)

(to record interest income receipt on termination of Goodwin's note)

For Slocombe's notes, as Kingbird expects it will eventually collect, at 4/1/23, although Slocombe's note is due yet not paid, Kingbird does not book provision for bad debt regarding to this note. Besides, the income earned but not yet received in 2023 from holding this note will not be recorded because the adjusting entries once a year on December 31 and in fact it is not paid yet ( together with the note's principal amount).

Explanation:

The explanations have been given following each entry in the answer. Beside the rules of double entries in accounting, accural accounting has to be well-understood in order to answer this question right. Accrual accounting is the accounting which records incomes/expenses when they are earned/incurred, rather than when they are received/paid.

Thus, the interest income has been earned from the very first day holding the two companies' notes has to be recorded (accured) at the end of the year 2022 rather than when it is received in order to accurately reflect the business result of the year 2022. At this point, a simple calculation ( as shown in the answer) needs to be done to determine an accurate amount of interest income to be booked for 2022.

8 0

2 years ago

The following items appeared in the year-end trial balance for the Brown Coffee Company: Debits Credits Revenues $ 600,000 Oper

alexgriva [62]

Answer:

What amount should be reported in the company's income statement as income from continuing operations?

$54000

Explanation:

revenue 600000

Operating expenses -420000

Interest expense -20000

gain on sale of investments 30000

restructuirng cost -100000

Income 90000

Tax rate 40%

tax expense 36000

Net income 54000

6 0

2 years ago

Read 2 more answers

The management of Musselman Corporation would like to set the selling price on a new product using the absorption costing approa

MissTica

Answer:

34%

Explanation:

Product cost using absorption costing:

Please note that under absorption costing, all manufacturing costs, whether fixed or variable, would be included in product cost'.

Unit product cost:

= Direct material cost per unit + Direct labor per unit+ Variable manufacturing overhead + Fixed manufacturing overhead

= $27 + $16 + $8 + ($216,000 ÷ 9,000)

= $27 + $16 + $8 + $24

= $75

Markup percentage on absorption cost :

= [(Required ROI × Investment) + Selling and administrative expenses] ÷ [Unit product cost × Units sales]

= [(10% × $1,305,000) + ($3.00 × 9,000 + $72,000)] ÷ [$75 × 9,000]

= $229,500 ÷ $675,000

= 34%

4 0

2 years ago

Which of the following endorsements would include the instructions “For deposit only”?

andrew11 [14]

Restrictive endorsement places a limitation on the use of a cheque for the payee. In this case the payee has to only deposit the money into the account

4 0

2 years ago

Miller Company's most recent contribution format income statement is shown below:sales (20,000 units)............300,000 15.00Va

Sphinxa [80]

Answer:

Miller Company

New contribution format income statement under each of the following conditions (consider each case independently):

1. The number of units sold increases by 15%.

Sales (23,000 units) $345,000 ( unit price $15.00)

Variable expenses $207,000 ( unit cost $9.00)

Contribution Margin $138,000 ( unit $6.00)

Fixed expense $70,000

Net operating income $68,000

2. The selling price decreases by $1.50 per unit, and the number of units sold increases by 25%.

Sales (25,000 units) $337,500 ( unit price $13.50)

Variable expenses $225,000 ( unit cost $9.00)

Contribution Margin $112,500 ( unit $4.50)

Fixed expense $70,000

Net operating income $42,500

3. The selling price increases by $1.50 per unit, fixed expenses increase by $20,000, and the number of units sold decreases by 5%.

Sales (19,000 units) $313,500 ( unit price $16.50)

Variable expenses $171,000 ( unit cost $9.00)

Contribution Margin $142,500 ( unit $7.50)

Fixed expense $90,000 ($70,000 + 20,000)

Net operating income $52,500

4. The selling price increases by 12%, variable expenses increase by 60 cents per unit, and the number of units sold decreases by 10%.

Sales (18,000 units) $302,400 ( unit price $16.80)

Variable expenses $172,800 ( unit cost $9.60)

Contribution Margin $129,600 ( unit $7.20)

Fixed expense $70,000

Net operating income $59,600

Explanation:

a) Contribution Format Income Statement as per question:

Sales (20,000 units) $300,000 ( unit price 15.00)

Variable expenses $180,000 ( unit cost 9.00)

Contribution Margin $120,000 ( unit 6.00)

Fixed expense $70,000

Net operating income $50,000

b) The contribution format income statement can be prepared under different scenarios to account for different events as in the above. They are estimates of future occurrences under scenario planning and analysis which can help management to make informed decisions, knowing the outcome of each situation.

7 0

2 years ago