The annual adjusting entry for depreciation on December 31 involves debiting Depreciation Expense for $53,750 and crediting Accumulated Depreciation - Equipment for the same amount. This updates the accounts to reflect the depreciation incurred during the year.
To prepare the annual adjusting entry for depreciation on December 31, we need to record the depreciation expense and update the accumulated depreciation account. Here's the adjusting entry:
Debit:
Depreciation Expense: $53,750
Credit:
Accumulated Depreciation - Equipment: $53,750
This entry records the depreciation expense for the year and increases the accumulated depreciation account by the same amount. Now let's update the T-accounts:
Equipment:
Debit: $30,000
Accumulated Depreciation - Equipment:
Credit: $53,750
After posting this adjusting entry, the Equipment account remains at $30,000, and the Accumulated Depreciation - Equipment account shows a credit balance of $53,750, representing the accumulated depreciation for the equipment.
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a. Discuss the decision taken by the Production Manager.
b. If the performance of a divisional manager at SAG operates in many countries and has a diverse product offering. With such complex and broad operations, there are invariably many factors that can affect the performance of a business sector or division. In its 2019 Annual Report, SAG refers to its future trading strategy, called ‘Vision 2020+’, which aims to grant their individual businesses more entrepreneurial freedom and responsibility for their results. A key component of this strategy relates to sustainable company development, and it is reported that, as one element of determining the total remuneration payable to the Managing Board, sustainability is to be measured according to a bespoke SAG Sustainability Index which takes into account the following: ‘three equally weighted key factors: CO2 emissions (environmental), learning hours per employee (social) and Net Promoter Score (governance)’. Presumably, these (or very similar) measures would also form part of the performance measurement system for divisional management. Throughout the 2019 Annual Report, the targets set under the Vision 2020+ programme are outlined and reported upon. For example, under the financial heading, revenue growth is referred to as follows: ‘Our primary measure for managing and controlling our revenue growth is comparable growth, because it shows the development in our business net of currency translation ... and port-folio effects.’
Required:
How might the actual assessment of divisional performance differ in recessionary times?
The Performance of a Divisional Manager at SAG operates in many countries and has a diverse product offering. The production manager has decided to introduce various ways of motivating employees to improve their efficiency.
The measures he introduced include the encouragement of teams to come up with new suggestions for improving production systems, the inclusion of overtime as part of the work contract, and the provision of recognition and cash rewards for employees who make outstanding contributions to production.
This means that the production manager's decision is to focus on employee motivation to improve productivity, which is the key to the company's profitability.
In recessionary times, the assessment of divisional performance might differ in the following ways: Revenue: During the recession, the revenue generated by the company may decrease as customers become less interested in buying expensive products or services that are not a priority.
In this case, the revenue target set in Vision 2020+ will be affected, and thus, the actual assessment of divisional performance might be negative.
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Which of the following is the most costly form of foreign direct investment?
a. Offshoring
b. Franchising
c. Importing
d. Licensing
The most costly form of foreign direct investment is: a. Offshoring.
Offshoring involves establishing a physical presence in a foreign country, such as setting up manufacturing plants or offices. This requires significant upfront investment in infrastructure, equipment, hiring local workforce, and complying with foreign regulations. Additionally, offshoring often involves long-term commitments and ongoing operational costs. In contrast, other forms of foreign direct investment like franchising, importing, and licensing may involve lower upfront costs or reliance on existing infrastructure and partnerships. Therefore, offshoring is considered the most expensive and resource-intensive option for companies expanding their operations internationally.
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Self interest rationales for helping develop poorer countries include all the following except
a.Creating markets for our products.
b.Creating opportunity for indigenous peoples.
c.Reduce terrorism.
d.Preserve the environment.
Self-interest rationales for helping develop poorer countries include all of the following except:
d. Preserve the environment.
Self-interest rationales for helping develop poorer countries typically revolve around economic and geopolitical considerations. Let's analyze each option:
a. Creating markets for our products: This rationale suggests that by assisting in the development of poorer countries, new markets can be created for products and services from wealthier nations. This can lead to increased trade and economic growth for the assisting countries.
b. Creating opportunity for indigenous peoples: This rationale emphasizes the importance of empowering and uplifting indigenous populations in poorer countries, enabling them to participate in economic and social development. It focuses on promoting social justice and equality.
c. Reduce terrorism: This rationale suggests that by addressing the root causes of poverty and inequality in poorer countries, the conditions that often give rise to extremism and terrorism can be mitigated. By promoting stability and security, the assisting countries can also safeguard their own interests.
d. Preserve the environment: While environmental preservation is an important global concern, it is not typically viewed as a self-interest rationale for helping develop poorer countries. Environmental considerations often involve broader global cooperation and sustainable development goals rather than immediate self-interest motives.
In summary, the correct answer is d. Preserve the environment, as it is not typically seen as a primary self-interest rationale for assisting in the development of poorer countries.
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manufacturers' agents are most likely used in such lines as ________.
Manufacturers' agents are most likely used in such lines as furniture, sporting goods, and hardware.
An agent is a person who represents the seller and has a contract with the manufacturer to sell the goods. They get paid a commission on their sales. Manufacturers' agents are a type of agent that is involved in selling a manufacturer's goods. They work on commission and are hired by the manufacturer to sell their products to wholesalers, retailers, and other distributors. In the furniture industry, manufacturers' agents may be used to sell furniture to retailers, wholesalers, and distributors.
Sporting goods manufacturers' agents may be used to sell sports equipment to retailers, wholesalers, and distributors. In the hardware industry, manufacturers' agents may be used to sell hardware to retailers, wholesalers, and distributors. These agents have a great deal of knowledge about the products they are selling and can help the manufacturer reach a larger market than they would be able to on their own.
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. True or false
For South Africa, an exchange if R9/$ is equivalent $0.11/R by
the direct method of stating an exchange rate in South Africa.
Explain either way.
The statement is false. When stating an exchange rate using the direct method, we express the price of one unit of foreign currency in terms of the domestic currency. Therefore, an exchange rate of R9/$ in South Africa is equivalent to $0.11/R.
The statement is false.
When stating an exchange rate using the direct method, we express the price of one unit of foreign currency in terms of the domestic currency. Therefore, if the exchange rate in South Africa is R9/$, it means that
one US dollar can be exchanged for 9 South African rand.
To convert this exchange rate to the equivalent of dollars per rand, we need to take the reciprocal of R9/$. That is:
$1 / R9 = $0.11
So the equivalent exchange rate in dollars per rand is $0.11/R.
Therefore, the statement is false.
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Click Submit to complete this assessment Question 41 10 points Save Ar [CLO-4) Around 50 billion square yards of used carpet are being thrown every year. Therefore, a carpet manufacturer has decided to recycle obsolete carpet (at the end of its useful life). The cost of recycling is $1.50 per square yard of carpet, and the remanufactured carpet can be sold for $3 per square yard if the recycling equipment costs $0.85 million and has an estimated salvage value of $60,000 at the end of the eight-year ide, how many square yards of carpet must be recycled annually to make this a profitable undertaking? Assume that the company's MARR is 10% per year and the study period is 8 years Question 41 of 41 Capsunare Question 41 of 41
The company needs to recycle at least $3.21 million / $3 per sq yd = 1.07 billion sq yds of carpet annually to make this a profitable undertaking.
To determine the number of square yards of carpet that must be recycled annually to make this a profitable undertaking, we need to calculate the net present value (NPV) of the project and then use that to find the annual equivalent cost (AEC) of the project.
First, let's calculate the total cost of the project:
Cost of recycling equipment = $0.85 million
Salvage value of equipment at end of eight-year life = $60,000
Total cost of equipment = $0.85 million - $60,000 = $0.79 million
Annual cost of recycling = 50 billion sq yds * $1.50/sq yd = $75 billion
Now, let's calculate the total revenue from the remanufactured carpet:
Revenue per square yard of remanufactured carpet = $3
Assuming all recycled carpet is successfully remanufactured and sold, the total revenue would be:
50 billion sq yds * $3/sq yd = $150 billion
Next, let's calculate the NPV of the project using a discount rate of 10% and an eight-year study period:
NPV = -(0.79 million) + (150 billion / (1+0.10)^1) + (75 billion / (1+0.10)^2) + (75 billion / (1+0.10)^3) + ... + (75 billion / (1+0.10)^8)
NPV = $17.63 million
Finally, we can use the NPV to find the AEC of the project:
AEC = NPV / [(1 - 1/(1+0.10)^8)/0.10]
AEC = $3.21 million
Therefore, the company needs to recycle at least $3.21 million / $3 per sq yd = 1.07 billion sq yds of carpet annually to make this a profitable undertaking.
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Using the EDD (earliest due date) decision rule for sequencing the jobs, the order is (to resolve a tie, use the order in which the jobs were received) Sequence Job 1 2 3 4 5 The total flow time for the sequence developed using the EDD rule=days (round your response to two decimal places) The percentage utilization for the sequence developed GILE ecerved, and due dates for the jobs are given elow. In what sequence would the jobs be anked according to the decision rules on the aft D Date Job Received Job Due Date A 115 185 122 195 120 180 118. 200 E 125 205 All dates are according to shop calendar days. oday on the manufacturing planning calendar day 132. Compute all times based on nitiating (starting) work on day 132. 14 BCDL с Processing (days) 17 2126 20 14 The a) Using the EDD (earliest due date) decision rule for sequencing the jobs, the order is (to resolve a tie, use the order in which the jobs were received) Job Sequence 1 2 3 4 5 The total flow time for the sequence developed using the EDD rule days (round your response to two decimal places) The percentage utilization for the sequence developed using the EDD rule= % (enter your response as a percentage rounded to two decimal places). The average number of jobs in the system for the sequence developed using the EDD rule jobs (round your response to two decimal places) At Morgan's Transformer Rebuilding, following jobs (below) are ready for dispatching to a work center. The processing times, date job received, and due dates for the jobs are given below. In what sequence would the jobs be ranked according to the decision rules on the left. Date Job Received. 115 Processing (days) Job Due Date: 185 A 17 B 122 195 20 0 120 180 14 D 118 200 22 E 125 205 16 All dates are according to shop calendar days. Today on the manufacturing planning calendar is day 132 Compute all times based on initiating (starting) work on day 132 С
According to the EDD (Earliest Due Date) decision rule, the jobs would be ranked in the following sequence: Job 1, Job 2, Job 3, Job 4, and Job 5. To resolve any tie, the order in which the jobs were received is considered.
The total flow time for this sequence, calculated by adding up the processing times of each job, would be a certain number of days (rounded to two decimal places). The percentage utilization for the sequence developed using the EDD rule can be calculated by dividing the total processing time of all jobs by the available time during the planning calendar. This utilization percentage indicates how effectively the available time is utilized for completing the jobs. Additionally, the average number of jobs in the system can be determined by calculating the total flow time and dividing it by the planning calendar time.
In conclusion, the EDD rule prioritizes jobs based on their due dates, with the earliest due date given the highest priority. This ensures that jobs with closer due dates are completed first, minimizing the risk of delays.
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A store will cost $725,000 to open. Variable costs will be 57% of sales and fixed costs are $110,000 per year. The investment costs will be depreciated straight-line over the 10 year life of the store to a salvage value of zero. The opportunity cost of capital is 13% and the tax rate is 35%.
Find the operating cash flow each year if sales revenue is $800,000 per year.
The Operating cash flow each year if sales revenue is $800,000 per year is $105,975.
The operating cash flow each year, considering sales revenue of $800,000 per year, is calculated as follows:
Operating cash flow = Sales revenue - Variable costs - Fixed costs - Depreciation expense - Taxes
First, the depreciation expense per year is calculated. The initial investment cost of $725,000 will be depreciated straight-line over the 10-year life of the store to a salvage value of zero. Therefore, the annual depreciation expense will be:
Depreciation expense = (Initial investment cost - Salvage value) / Useful life
Depreciation expense = ($725,000 - $0) / 10 yearsDepreciation expense = $72,500 per yearNext, the annual variable costs are calculated, which are 57% of the sales revenue:
Variable costs = 57% of Sales revenue
Variable costs = 0.57 * $800,000Variable costs = $456,000 per yearNow the operating cash flow for each year is calculated :
Year 1 :
Operating cash flow = $800,000 - $456,000 - $110,000 - $72,500 - (35% * ($800,000 - $456,000 - $110,000 - $72,500))Operating cash flow = $800,000 - $456,000 - $110,000 - $72,500 - (0.35 * $161,500)Operating cash flow = $800,000 - $456,000 - $110,000 - $72,500 - $56,525Operating cash flow = $105,975Years 2-10 :
Operating cash flow = $800,000 - $456,000 - $110,000 - $72,500 - (35% * ($800,000 - $456,000 - $110,000 - $72,500))Operating cash flow = $105,975To know more about Operating cash flow, refer to the link:
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Last year Carson Industries issued a 10-year, 14% semiannual coupon bond at its par value of $1,000. Currently, the bond can be called in 6 years at a price of $1,070 and it sells for $1,280. What are the bond's nominal yield to maturity and its nominal yield to call?
The bond's nominal yield to maturity is 8.38% and its nominal yield to call is 5.98%.
To calculate the nominal yield to maturity, we need to find the discount rate that equates the present value of the bond's future cash flows (coupons and par value) to its current price.
Using the present value formula for a bond, we can set up the following equation:
$1,280 = C × [1 - (1 + r/2)^(-2×10)] / (r/2) + $1,000 / (1 + r/2)^(2×10)
where C is the semiannual coupon payment, r is the yield to maturity, and the bond has a 10-year maturity with semiannual payments.
Solving this equation for r, we find that the yield to maturity is approximately 8.38%.
To calculate the nominal yield to call, we use a similar approach, but instead of using the bond's maturity, we consider the call price and the remaining time to call.
$1,070 = C × [1 - (1 + r/2)^(-2×6)] / (r/2) + $1,000 / (1 + r/2)^(2×6)
Solving for r, we find that the yield to call is approximately 5.98%.
Therefore, the bond's nominal yield to maturity is 8.38% and its nominal yield to call is 5.98%.
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Which element of the marketing communications mix does OXO most heavily utilize? a) Direct marketing b) Personal selling c) Public relations d) Sales promotionc
Option (c) Public relations is the correct answer. OXO most heavily utilizes public relations from the marketing communications mix.
Public Relations (PR) is a component of the marketing communication mix that is critical for OXO. OXO focuses heavily on public relations in order to maintain a favorable public image of the organization, attract customers, and improve consumer perceptions of the brand.
OXO primarily utilizes public relations to increase brand awareness and foster favorable customer perceptions. Through public relations, OXO aims to build brand trust and authority while also keeping consumers informed of new items, updates, and promotional campaigns.
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Maxwell Software, Inc., has the following mutually exclusive projects.
Year Project A Project B
0 –$22,000 –$25,000
1 13,000 14,000
2 9,500 10,500
3 3,100 9,500
a-1. Calculate the payback period for each project. (Do not round intermediate calculations and round your answers to 3 decimal places, e.g., 32.161.)
Payback period
Project A years
Project B years
a-2. Which, if either, of these projects should be chosen?
Project A
Project B
Both projects
Neither project
b-1. What is the NPV for each project if the appropriate discount rate is 16 percent? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
NPV
Project A $
Project B $
b-2. Which, if either, of these projects should be chosen if the appropriate discount rate is 16 percent?
Project A
Project B
Both projects
Neither project
Project B should be selected as it has a positive NPV of $943.84 if the appropriate discount rate is 16%.Project B should be chosen if the appropriate discount rate is 16%.
a-1. Calculation of Payback Period for each project:
For Project A: Initial investment = -22,000Cash inflow for year 1 = 13,000Cash inflow for year 2 = 9,500Cash inflow for year 3 = 3,100Cash inflow for year 4 = 0Amount recovered at the end of year 3 = 22,600 Amount to recover = 22,000 – 22,600 = -600Payback period = 2.31 years (Approximately 2.308 years)For Project B:Initial investment = -25,000Cash inflow for year 1 = 14,000Cash inflow for year 2 = 10,500Cash inflow for year 3 = 9,500Cash inflow for year 4 = 0Amount recovered at the end of year 3 = 34,000Amount to recover = 25,000 – 34,000 = -9,000Payback period = 2.632 years (Approximately 2.632 years)
a-2. Based on the payback period of Project A and Project B, we can conclude that Project A has a lower payback period than Project B, which means that Project A has less risk as compared to Project B. Thus, Project A should be selected.Neither project should be chosen as both have a negative NPV if the appropriate discount rate is 16%.
b-1. Calculation of NPV for each project:For Project A:Year Cash flows Discount Factor at 16%Discounted Cash flows0 (22,000) 1.0000 (22,000)1 13,000 0.8621 11,202.60 2 9,500 0.7432 7,056.94 3 3,100 0.6412 1,987.28 NPV = -1,753.18For Project B:Year Cash flows Discount Factor at 16%Discounted Cash flows0 (25,000) 1.0000 (25,000)1 14,000 0.8621 12,058.50 2 10,500 0.7432 7,807.14 3 9,500 0.6412 6,090.20 NPV = 943.84
b-2. Based on the NPV of Project A and Project B, we can conclude that Project B should be selected as it has a positive NPV of $943.84 if the appropriate discount rate is 16%.Thus, Project B should be chosen if the appropriate discount rate is 16%.
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Uranus, a Web site reviewing the latest trends in fashion, has a banner link to an online clothes retailer. When consumers purchase from the retailer, through this link, Uranus receives a percentage of the sale. On the basis of the given information we can say that this is an example of:
1. cloud targeting.
2. affiliate marketing.
3. behavioral targeting.
4. a company name that teenagers will make fun of.
5. viral marketing.
Uranus, a Web site reviewing the latest trends in fashion, has a banner link to an online clothes retailer. When consumers purchase from the retailer, through this link, Uranus receives a percentage of the sale. On the basis of the given information we can say that this is an example of affiliate marketing.
In this scenario, Uranus is acting as an affiliate for the online clothes retailer by promoting their products through a banner link on their website. When consumers make a purchase through that link, Uranus receives a percentage of the sale as a commission. This is a common practice in affiliate marketing, where websites or individuals earn a commission for driving traffic and sales to a retailer's website.
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Choose any Hotel near you
List the amenities they have along wioth the types of rooms they
provide .
A general list of common amenities found in hotels and some common types of rooms that hotels typically offer.
Common amenities in hotels can include Wi-Fi or internet access, Complimentary breakfast, Swimming pool, Fitness center, On-site restaurant or room service, Business center, Parking facilities, Spa or wellness facilities, 24-hour front desk, Laundry services. Standard or Deluxe Room, Suite, Executive Room, Family Room, Connecting Rooms, Accessible or ADA-compliant Room, Penthouse or Presidential Suite, Studio Room, Junior Suite, Extended Stay Room or Apartment. When searching for a hotel near your location, I recommend using online hotel booking platforms or search engines where you can specify your desired amenities and room types to find hotels that meet your preferences.
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In a market economy, how much of each good to produced is ultimately determined by the interaction of
1. collusion between firms.
2. buyers and sellers (i.e., demand and supply).
3. all consumers acting together.
4. government.
In a market economy, how much of each good to produced is ultimately determined by the interaction of 2. buyers and sellers (i.e., demand and supply).
In a market economy, the amount of each product produced is ultimately determined by the interaction between buyers and sellers. The laws of supply and demand decide the prices, quantities, and types of products produced in a market economy.
The producers are free to produce whatever they think will sell, and the buyers are free to buy whatever they want at a price they can afford. This interaction, often referred to as the "invisible hand," regulates the market economy. Collusion between firms can disrupt this equilibrium, and government intervention can also have a significant impact on market outcomes. However, in a genuine market economy, the interaction of buyers and sellers determines how much of each good is produced.
Therefore, the correct answer is option 2. buyers and sellers.
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A drill press was purchased 4 years ago for $40,000. Its estimated salvage value after 7 years was $5,000. The press can be sold for $15,000 today, or for $12,000, $9,000, or $6,000 at the ends of each of the next 3 years. The annual operating and maintenance cost for the next 3 years will be $2,700 for this year and then will increase by $800 per year. Considered MARR is 10%. What is the total marginal cost for year-3?
The total marginal cost for year-3 of the drill press is $11,946. This cost includes the annual operating and maintenance cost, the reduction in salvage value, and the opportunity cost of not selling the press.
To calculate the total marginal cost for year-3, we need to consider the annual operating and maintenance cost, the reduction in salvage value, and the opportunity cost of not selling the press.
The annual operating and maintenance cost for year-3 is $2,700, as given.
The reduction in salvage value is the difference between the salvage value at the end of year-3 ($6,000) and the salvage value at the end of year-7 ($5,000), discounted back to year-3 using the MARR of 10%.
The discounted reduction in salvage value is calculated as follows:
Reduction in Salvage Value = [tex]\frac{(6,000 - 5,000)}{(1 + 0.10)^{4} }[/tex] = $452.49
The opportunity cost is the difference between the value of selling the press at the end of year-3 ($9,000) and the value of selling it today ($15,000), discounted back to year-3 using the MARR of 10%.
The discounted opportunity cost is calculated as follows:
Opportunity Cost = [tex]\frac{(9,000 - 15,000)}{(1 + 0.10)^{3} }[/tex] = -$3,085.46 (negative since it represents a cost)
The total marginal cost for year-3 is the sum of the annual operating and maintenance cost, the reduction in salvage value, and the opportunity cost:
Total Marginal Cost = $2,700 + $452.49 + (-$3,085.46) = $11,946.03
Therefore, the total marginal cost for year-3 of the drill press is $11,946.
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A company in its growth stage will likely experience the following financial situation
a ) Low dividend payout and a low debt /equity ratio
b ) High dividend payout and a low debt /equ ratio
c) Low dividend payout and a high debt/equity ratio
dHigh dividend payout and a high debt/ equity ratio. 4
In the growth stage, a company typically focuses on reinvesting its earnings to fund expansion and capitalize on growth opportunities. As a result, it is more likely to experience the following financial situation: c) Low dividend payout and a high debt/equity ratio.
During the growth stage, companies tend to prioritize retaining earnings for reinvestment in areas such as research and development, marketing, and expanding operations. This focus on reinvestment often leads to a lower dividend payout, as the company aims to allocate more capital towards growth initiatives rather than distributing it to shareholders as dividends.Additionally, as the company invests in growth, it may require external funding to support its expansion plans. This can lead to a higher debt/equity ratio, indicating that the company has a significant amount of debt relative to its equity.The higher debt level reflects the company's willingness to leverage its capital structure to finance growth and take advantage of potential opportunities. The correct option is A
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The cash flows for three different alternatives are given and the needed rate-of-return is the same for all of them. You should find the best alternative by: a. Finding the future value b. Including method of depreciation in the analysis c. Finding the MARR of the project d. Either by graphing the choice table or by using challenger-defender analysis jessica just recelved the following information on her project: PV=200,EV=300,AC=250,BAC=1500,EAC=1208. In terms of cost at completion.
a. The project will currently finish under budget. b. The project will currently finish over budget. c.The project will currently finish on budget.
d. The project will currently finish behind schedule. e. There is insufficent information to draw conclusions. The earned value of a project is the: a. Project cost to date adjusted for project scope changes
b. Total project cost to date c. Cost incurred minus the planned cost d. Percent of the original budget that has been earned by actual work e. None of these are correct If for some reason, the project must be expedited to meet an earlier date, which of the following actions would the project manager take first? a. Check to see which activities cost the least b. Check to see which activities have the longest duration
c. Check to see which activities are on the critical path d. Check to see which activities have the most slack e. Check to see which activities have the highest risk R\&D investments are now generally thought of as:
a. Individual opportunities that are not related to other corporate business b. Only acceptable if a joint venture is involved c. Too risky for any company in an uncertain economy d. Portfolios of projects in low, medium, and high-risk ventures
To find the best alternative when the cash flows for three different alternatives are given, and the needed rate-of-return is the same for all of them is either by graphing the choice table or by using challenger-defender analysis. Thus, the correct option is d. Either by graphing the choice table or by using challenger-defender analysis.
Depreciation method can be included in the analysis, but it is not necessary. It can affect the result of net cash flows calculation and hence the internal rate of return, but it does not change the fact which of the alternatives is better.In terms of cost at completion, the project will currently finish under budget when using the following formula:EAC = AC + [(BAC - EV) / (CPI x SPI)]where, CPI = EV / ACCPI = 300 / 250 = 1.2SPI = EV / PVSPI = 300 / 200 = 1.5EAC = 250 + [(1500 - 300) / (1.2 x 1.5)] = 1208Thus, EAC is 1208, which is less than BAC of 1500. Therefore, the project will currently finish under budget. The earned value of a project is the: Cost incurred minus the planned cost (c).
The project manager would check to see which activities are on the critical path first if the project must be expedited to meet an earlier date. R&D investments are now generally thought of as portfolios of projects in low, medium, and high-risk ventures.
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The stockholders' equity accounts of Riverbed Company have the following balances on December 31, 2017. Common stock, $3 par, 1,100,000 shares issued and outstanding $3,300,000
Paid-in-capital in excess of par-common stock 4,730,000
Retained earnings 7,540,000
Shares of Riverbed Company stock are currently selling on the Midwest Stock Exchange at $22. Prepare the appropriate journal entries for each of the following independent cases. (b) A stock dividend of 50% is declared and issued. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.)
In Case B, a stock dividend of 50% is declared and issued by Riverbed Company. A stock dividend is a distribution of additional shares to existing shareholders instead of a cash payout.
The fair market value of the additional shares is determined based on the market value of the shares on the declaration date.
In this case, Riverbed Company will issue 550,000 additional shares as a stock dividend.
The journal entries for this transaction involve transferring an amount from retained earnings to paid-in capital.
However, the given answer states that no entries are required for this question, indicating that there are no specific journal entries needed for this particular scenario.
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At December 31, 2021, Warm Weather Travel has an Accounts Receivable balance of $89,000, Alowance for Uncolectible Accounts has a credit balance of $850 before the year-end adjustment Service revenue (al on account) for 2021 was $560,000. Warm Weather estimates that its uncollectible-account expense for the year is 3% of service revenue.
a. Make the year-end entry to record uncolectible account expense. b. Show how Accounts Receivable and Allowance for Uscollectitie Accounts are recone on the balance sheet at December 31, 2021.
a. The year-end entry to record uncollectible account expense would be:
Debit: Uncollectible Account Expense $16,800
Credit: Allowance for Uncollectible Accounts $16,800
To record the estimated uncollectible account expense, Warm Weather Travel will debit the Uncollectible Account Expense account for $16,800. This represents 3% of the service revenue of $560,000. The credit of $16,800 will be made to the Allowance for Uncollectible Accounts account, which is a contra-asset account used to offset the Accounts Receivable and reflect the estimated amount of uncollectible accounts.
b. The presentation on the balance sheet at December 31, 2021, would be as follows:
Accounts Receivable: $89,000
Less: Allowance for Uncollectible Accounts: ($16,800)
Net Accounts Receivable: $72,200
The balance sheet will show the Accounts Receivable balance of $89,000, representing the total amount owed by customers.
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What is the nominal annual rate of interest compounded semi-annually at which $776.00 will accumulate to $1263.07 in eight years and six months?
The nominal annual rate of interest compounded semi-annually at which $776.00 will accumulate to $1263.07 in eight years and six months is 6%.
A nominal annual rate of interest compounded semi-annually is used to determine the amount of interest that will accrue on a specific investment. To calculate this rate, one must determine how much money will accumulate over a certain period of time at a given interest rate.
This is done by using a formula that takes into account the principal amount, the rate of interest, and the length of the investment. In this case, the amount that is accumulated is $1263.07 over a period of eight years and six months. The principal amount is $776.00.
Therefore, we can use the formula: A = P(1 + r/n)^(nt), where A is the amount of money accumulated, P is the principal amount, r is the annual interest rate, n is the number of times the interest is compounded per year, and t is the number of years. Substituting the values that we have:1263.07 = 776(1 + r/2)^(2*8.5)
Taking logarithm of both sides;log 1263.07 = log 776 + 8.5 log(1 + r/2)log(1 + r/2) = (log 1263.07 - log 776) / 8.5= 0.05986646
Solving for r/2:r/2 = (e^0.05986646) - 1= 0.05986646Solving for r:r = 0.05986646 * 2= 0.11973292 = 11.97%
The nominal annual rate of interest compounded semi-annually at which $776.00 will accumulate to $1263.07 in eight years and six months is 11.97% or approximately 6% annually.
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Information related to Crane Co. is presented below. On April 8, returned damaged merchandise to Blue Company and was granted a $5,000 credit for returned merchandise. On April 15, paid the amount due to Blue Company in full. (Note: On April 5, purchased merchandise from Blue Company for $43,000, terms 2/10, net/30, FOB shipping point.) 2. (a) Prepare the journal entries to record these transactions on the books of Crane Co. under a perpetual inventory system. (Credit account titles are automatically indented when amount is entered. Do not indent manually) Date ___ Account Titles and Explanation _____ Debit ____ Credit _____
Date Account Titles and Explanation Debit Credit April 8 Accounts Payable $5,000 Merchandise Inventory $5,000.
April 15 Accounts Payable $43,000
Cash $42,140
Merchandise Inventory $860
(To record the payment to Blue Company, taking into account the discount of $860 ($43,000 * 2%))
Note: The net amount paid is $42,140 ($43,000 - $860), which takes into account the discount of $860 for paying within the discount period. Merchandise refers to the goods or products that a company buys or manufactures for the purpose of selling to customers. It represents the inventory held by a business for resale.
Merchandise can take various forms depending on the nature of the business. It can include tangible goods such as clothing, electronics, groceries, or automobiles. Additionally, merchandise can also encompass digital products like software, e-books, or online subscriptions.
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Consider an infinitely-repeated game with the following stage game (a variant of the Prisoner's Dilemma): Player 2 A B 4,4 2,7 Player 1 5, 2 3,3 Note that this is not a symmetric game. Suppose that the players in this game both use the following grim-trigger strategy: "In round 0, play A. Afterwards, if the strategy profile in all previous periods has been (A, A), play A again. Otherwise, play B instead." a) Write down at least four terms of the sequence of payoffs that the players receive by playing these grim-trigger strategies. (It is the same sequence for both players.) Then summarize this sequence using one of the formulas given in class. b) Suppose that Player 1 deviates by playing B in round 0, and thereafter plays the trigger strategy. Write down at least four terms of the sequence of payoffs Player 1 receives from doing this, then summarize this sequence using one of the formulas given in class. AB A c) Next suppose that Player 2 is the one to deviate, again by playing B in round 0, and thereafter plays the trigger strategy. Write down at least four terms of the sequence of payoffs Player 2 receives from doing this, then summarize this sequence using one of the formulas given in class. d) Assuming that both players have the same value of 8, what values of 8 will make it a Nash equilibrium for both players to use this trigger strategy?
a) The sequence of payoffs for both players by playing the grim-trigger strategy is: (5, 4, 4, 4, ...).
This can be summarized as a geometric series: 5 + 4(1/3) + 4(1/3)² + 4(1/3)³ + ...
b) If Player 1 deviates by playing B in round 0 and then follows the trigger strategy, the sequence of payoffs for Player 1 becomes: (3, 4, 4, 4, ...). This can be summarized as a geometric series: 3 + 4(1/3) + 4(1/3)² + 4(1/3)³ + ...
c) If Player 2 deviates by playing B in round 0 and then follows the trigger strategy, the sequence of payoffs for Player 2 becomes: (2, 7, 7, 7, ...). This can be summarized as a geometric series: 2 + 7(1/3) + 7(1/3)² + 7(1/3)³ + ...
d) For it to be a Nash equilibrium, both players should have no incentive to deviate. Since both players have the same value, 8, the trigger strategy is a Nash equilibrium for any value of 8.
a) The grim-trigger strategy states that players start by playing A in round 0 and continue playing A as long as the previous strategy profile has been (A, A). Otherwise, they switch to playing B. In this game, the sequence of payoffs for both players is (5, 4, 4, 4, ...), where each player receives 5 in the first round and 4 in all subsequent rounds. This can be represented as a geometric series, where the first term is 5 and the common ratio is 1/3.
b) If Player 1 deviates by playing B in round 0 and then follows the trigger strategy, their sequence of payoffs becomes (3, 4, 4, 4, ...), where the first term is 3 and the common ratio is still 1/3. Player 1 receives 3 in the first round and 4 in all subsequent rounds.
c) Similarly, if Player 2 deviates by playing B in round 0 and then follows the trigger strategy, their sequence of payoffs becomes (2, 7, 7, 7, ...), where the first term is 2 and the common ratio is 1/3. Player 2 receives 2 in the first round and 7 in all subsequent rounds.
d) For the trigger strategy to be a Nash equilibrium, both players should have no incentive to deviate. Since both players have the same value, 8, any value of 8 will make it a Nash equilibrium for both players to use the trigger strategy. This means that as long as the value of 8 is the same for both players, they will not deviate from the trigger strategy.
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The current spot exchange rate is $1.95/€ and the three-month forward rate is $1.90/€. Based upon your economic forecast, you are pretty confident that the spot
exchange rate will be $1.88/€ in three months. Assume that you would like to buy or sell €100,000,000. What actions would you take to speculate in the forward
market and what is the expected dollar payoff from speculation?
Actions to take to speculate in the forward market .You will sell euros in the forward market because you expect the euro to depreciate against the dollar and the expected future spot rate is $1.88/€ in three months, you will make a profit of $2,000,000 by selling €100,000,000 in the forward market.
In this scenario, you want to speculate that the euro will depreciate against the US dollar in the next three months. This means that you want to buy dollars at the current exchange rate of $1.95/€ and then sell them at a higher exchange rate in three months to make a profit.
The actions to take to speculate in the forward market and the expected dollar payoff from speculation are as follows: Actions to take to speculate in the forward market .You will sell euros in the forward market because you expect the euro to depreciate against the dollar.
Since you want to sell €100,000,000, you will enter into a forward contract to sell €100,000,000 at the current forward rate of $1.90/€.
This means that in three months, you will sell €100,000,000 at $1.90/€, regardless of what the actual exchange rate is at that time.
Expected dollar payoff from speculationThe expected dollar payoff from speculation can be calculated as follows:
Payoff from speculation = Amount of euros sold × (Expected future spot rate − Forward rate)
Substituting the values:Amount of euros sold = €100,000,000
Forward rate = $1.90/€
Expected future spot rate = $1.88/€
Payoff from speculation = €100,000,000 × ($1.88/€ − $1.90/€)
Payoff from speculation = €100,000,000 × -$0.02/€
Payoff from speculation = -$2,000,000
This means that if the expected future spot rate is $1.88/€ in three months, you will make a profit of $2,000,000 by selling €100,000,000 in the forward market.
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Procter & Gamble (P&G) has a paper towel and baby diaper business that both use paper products. This is an example of value created through operational relatedness. O True O False
Procter & Gamble's paper towel and baby diaper business, although both using paper products, are not examples of value created through operational relatedness.
Operational relatedness refers to the concept of creating value by sharing operational activities and resources across different business units or product lines within a company. It involves leveraging synergies and economies of scale to reduce costs, improve efficiency, and enhance overall performance.
In the given example of Procter & Gamble (P&G), the paper towel and baby diaper businesses may both use paper products, but they are not necessarily linked through operational relatedness.
These two business units within P&G may have separate production processes, supply chains, and distribution channels. While there may be some shared resources or expertise within P&G as a large consumer goods company, it does not necessarily imply operational relatedness specifically between the paper towel and baby diaper businesses.
To illustrate operational relatedness, an example could be if P&G's paper towel and baby diaper businesses shared manufacturing facilities, sourcing of raw materials, or distribution networks, leading to cost savings and operational efficiencies.
However, without further information indicating such operational integration, it cannot be assumed that operational relatedness is creating value between these two specific businesses within P&G.
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Taxes indroduced broader socio-economic purposes to discourage certain behaviour may included taxes to influence?
The baby bonus.
Health, Defence and Education.
"Sin taxes" on alcohol, tobacco products or gambling.
Welfare Payments.
Taxes have been introduced as a method of providing broader socio-economic purposes, including discouraging particular behaviors. Taxes that influence behavior can include sin taxes on alcohol, tobacco products, or gambling.
Taxes are financial levies that governments impose on their citizens to fund various public goods and services. Some of the functions that taxes serve are to maintain law and order, provide education, healthcare, social security, and other public goods and services. Furthermore, taxes can also be used to achieve social, political, and economic objectives, such as discouraging certain behaviors or promoting specific industries.
The government, for example, uses taxes to reduce social vices such as smoking and alcoholism by levying "sin taxes" on tobacco products, alcohol, and gambling. The government imposes these taxes to discourage harmful behaviors and to raise revenue for social welfare programs. In contrast, other taxes such as the baby bonus, defense, and education are not explicitly intended to discourage particular behaviors.
Taxes introduced broader socio-economic purposes to discourage certain behavior may included taxes to influence, "Sin taxes" on alcohol, tobacco products or gambling
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ii. Define and explain the following terms with example: (6) a. International business vs International Trade b. Multinational vs Multidomestic business c. Global company vs transnational company
a. International business: Commercial activities between countries beyond trade.
b. Multinational vs Multidomestic: Operating in multiple countries vs tailoring to local markets.
c. Global vs Transnational: Unified approach vs balance between global integration and local adaptation.
a. International business vs International Trade:
- International business refers to the commercial activities that involve transactions (such as buying, selling, investing) between companies or individuals in different countries. It encompasses various aspects, including production, marketing, finance, and operations, and involves a broader scope of activities beyond just trade. International business involves not only the exchange of goods and services but also the movement of capital, technology, and knowledge across borders. For example, a multinational corporation establishing subsidiaries in multiple countries to expand its operations would be considered involved in international business.
- International trade, on the other hand, specifically refers to the exchange of goods and services across national borders. It focuses on the import and export of products between countries. International trade involves the buying and selling of goods or services produced in one country to customers or businesses located in another country. For example, when a company in the United States exports automobiles to customers in Germany, it engages in international trade.
b. Multinational vs Multidomestic business:
- Multinational business refers to a company that operates and has a presence in multiple countries. It establishes subsidiaries, branches, or affiliates in different nations, allowing it to conduct business operations, production, marketing, and distribution on a global scale. A multinational business seeks to leverage its resources, expertise, and market presence across various countries to gain competitive advantages and expand its market reach. For example, Coca-Cola and McDonald's are well-known multinational companies that have a significant presence and operations in numerous countries around the world.
- Multidomestic business, on the other hand, refers to a company that operates as a separate entity in each country it conducts business in. It tailors its products, services, and operations to meet the specific needs and preferences of local markets. A multidomestic business decentralizes decision-making and allows each subsidiary or division in different countries to operate independently, adapting to local market conditions. For example, Nestlé operates as a multidomestic business by customizing its products and marketing strategies to suit the local tastes and preferences of consumers in different countries.
c. Global company vs Transnational company:
- A global company is an organization that operates on a global scale and has a unified approach to its operations, strategy, and decision-making across different countries. It seeks to create standardized products, processes, and systems that can be applied universally across its operations. For example, IBM is a global company that provides standardized IT solutions and services worldwide, with consistent branding and operations across different countries.
- A transnational company, also known as a multinational enterprise, combines elements of both multinational and global companies. It operates with a global mindset while also recognizing the need for local adaptation and responsiveness. A transnational company aims to achieve a balance between global integration and local customization. It allows for the flow of ideas, knowledge, and resources across different subsidiaries or divisions, fostering collaboration and learning throughout the organization.
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Evaluate how CDR (Consumer Data Right) and API (Application Program Interface) are, or could be affecting your own financial activities – like how you purchase goods and services, take out a loan, invest etc.
The Consumer Data Right (CDR) is a regulatory initiative that allows consumers to access and share their personal data with businesses securely.
The CDR framework has the potential to benefit consumers and businesses alike by increasing transparency, competition, and innovation. It is anticipated that CDR will be a catalyst for open banking in Australia, resulting in more service providers entering the market, providing innovative services, and better pricing. As a result, financial activities such as purchasing goods and services, taking out a loan, and investing may be affected by CDR.
APIs (Application Programming Interfaces) are tools that enable software applications to interact with one another. APIs are often used in the context of open banking to enable third-party providers to access bank data. By using APIs, businesses can share data securely and efficiently with other businesses, leading to improved services and new innovations.
As a result, CDR and API technologies could make it easier for consumers to access and share their financial data, giving them greater control over their finances and the ability to make more informed decisions. For example, CDR could allow consumers to view all their financial data in one place, allowing them to identify where they may be spending more money than they should. This information could be used to reduce expenses and improve budgeting. Similarly, APIs could allow consumers to compare and choose from a wider range of products and services.
In conclusion, CDR and APIs are technologies that have the potential to benefit consumers by increasing transparency and competition in the financial services sector. By enabling businesses to share data securely and efficiently, these technologies could help consumers make more informed decisions and improve their financial well-being.
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On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two-year, 1,600,000 Chinese yuan loan from a Chinese bank at an interest rate of 4 percent per year. The company makes interest payments annually on September 30 and will repay the principal on September 30, 2022. PFI prepares U.S. dollar financial statements and has a December 31 year-end. Relevant exchange rates are as follows: Date U.S. Dollar per Chinese Yuan (CNY) September 30, 2020 $ 0.160 December 31, 2020 0.165 September 30, 2021 0.180 December 31, 2021 0.185 September 30, 2022 0.210 Prepare all journal entries related to this foreign currency borrowing. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U.S. dollars on the loan in each of the three years 2020, 2021, and 2022.
September 30, 2020:
Debit: Cash ($256,000)Credit: Foreign Currency Payable ($256,000)September 30, 2021:
Debit: Foreign Currency Payable ($288,000)Debit: Loss on Foreign Exchange ($6,400)Credit: Interest Expense ($64,000)September 30, 2022:
Debit: Foreign Currency Payable ($336,000)Debit: Loss on Foreign Exchange ($5,600)Credit: Interest Expense ($64,000)The effective interest rates are as follows:
4%4%0.67%Peace Frog International (PFI) recorded a two-year loan in Chinese yuan. Journal entries involved loan recording, exchange rate adjustments, and recognizing interest expense. The effective interest rates were calculated for each year, considering exchange rate impact.
To record the foreign currency borrowing and subsequent transactions, the following journal entries are made:
1. September 30, 2020 (Loan Received):
Dr. Cash ($0.160 x 1,600,000) $ 256,000Cr. Foreign Currency Loan 256,0002. December 31, 2020 (Exchange Rate Adjustment):
Dr. Unrealized Foreign Exchange Gain $ 8,000Cr. Foreign Currency Loan3. September 30, 2021 (Interest Payment):
Dr. Interest Expense ($256,000 x 4%) $ 10,240Cr. Cash 10,2404. December 31, 2021 (Exchange Rate Adjustment):
Dr. Unrealized Foreign Exchange Gain $ 8,000Cr. Foreign Currency Loan5. September 30, 2022 (Interest Payment & Principal Repayment):
Dr. Interest Expense ($256,000 x 4%) $ 10,240Dr. Foreign Currency Loan 1,600,000Cr. Cash 10,240Cr. Foreign Currency Loan 1,600,000To determine the effective interest rate in U.S. dollars for each year, we need to calculate the total interest expense in U.S. dollars and divide it by the average outstanding loan balance. The effective interest rates are as follows:
2020: $10,240 / $256,000 = 4%2021: $10,240 / $256,000 = 4%2022: $10,240 / ($256,000 + $1,600,000) = 0.67%Therefore, the effective interest rate in U.S. dollars for the loan is 4% in 2020 and 2021, and 0.67% in 2022.
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Adjusting entries (monthly) LO4Wedona Energy Consultants prepares adjusting entries monthly. Based on an analysis of the unadjusted trial balance at January 31, 2020, the following information was available for the preparation of the January 31, 2020, month-end adjusting entries:Equipment purchased on November 1 of this accounting period for $13,440 is estimated to have a useful life of 2 years. After 2 years of use, it is expected that the equipment will be scrapped due to technological obsolescence.Of the $11,000 balance in Unearned Consulting Revenue, $8,300 had been earned.The Prepaid Rent account showed a balance of $12,300. This was paid on January 1 of this accounting period and represents six months of rent commencing on the same date.Accrued wages at January 31 totalled $18,100.One month of interest had accrued at the rate of 6% per year on a $34,000 note payable.Unrecorded and uncollected consulting revenues at month-end were $5,950.A $3,150 insurance policy was purchased on April 1 of the current accounting period and debited to the Prepaid Insurance account. Coverage began April 1 for 18 months.The monthly depreciation on the office furniture was $605.Repair revenues accrued at month-end totalled $3,000.The Store Supplies account had a balance of $760 at the beginning of January. During January, $1,740 of supplies were purchased and debited to the Store Supplies account. At month-end, a count of the supplies revealed a balance of $610.Assume Wedona Energy uses the straight-line method to depreciate its assets.Required:Prepare adjusting journal entries for the month ended January 31, 2020, based on the above.
Based on the provided information, here are the adjusting journal entries for the month ended January 31, 2020:
1. Depreciation Expense:
Debit: Depreciation Expense - Equipment ($13,440 / 2 years / 12 months)
Credit: Accumulated Depreciation - Equipment ($13,440 / 2 years / 12 months)
2. Consulting Revenue:
Debit: Unearned Consulting Revenue ($8,300)
Credit: Consulting Revenue ($8,300)
3. Rent Expense:
Debit: Rent Expense ($12,300 / 6 months)
Credit: Prepaid Rent ($12,300 / 6 months)
4. Wages Expense:
Debit: Wages Expense ($18,100)
Credit: Accrued Wages ($18,100)
5. Interest Expense:
Debit: Interest Expense ($34,000 * 6% / 12 months)
Credit: Interest Payable ($34,000 * 6% / 12 months)
6. Consulting Revenue:
Debit: Accounts Receivable - Consulting Revenues ($5,950)
Credit: Consulting Revenue ($5,950)
7. Insurance Expense:
Debit: Insurance Expense ($3,150 / 18 months)
Credit: Prepaid Insurance ($3,150 / 18 months)
8. Depreciation Expense:
Debit: Depreciation Expense - Office Furniture ($605)
Credit: Accumulated Depreciation - Office Furniture ($605)
9. Repair Revenue:
Debit: Accounts Receivable - Repair Revenues ($3,000)
Credit: Repair Revenue ($3,000)
10. Store Supplies Expense:
Debit: Store Supplies Expense ($1,740 - $760 + $610)
Credit: Store Supplies ($1,740 - $760 + $610)
These entries will help adjust the accounts to reflect the correct balances and recognize the appropriate revenues and expenses for the month of January.
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On May 30, Cecil Company purchased merchandise on account from Ricci Company as follows - Sales Price: $40,000, Sales Terms: 2/10, n/30. The Journal Entries of Cecil Company will show which of the following for the May 30 Purchase?
On May 30, Cecil Company purchased merchandise on account from Ricci Company for $40,000 with sales terms of 2/10, n/30. The journal entries of Cecil Company will include the accounts payable for the purchase and a discount if the payment is made within the discount period.
When Cecil Company purchased merchandise on account from Ricci Company, the following journal entries will be recorded:
Purchase of Merchandise:
Debit: Merchandise Inventory - $40,000
Credit: Accounts Payable - $40,000
This entry reflects the increase in the inventory of Cecil Company and the corresponding increase in the accounts payable to Ricci Company.
Payment within the Discount Period:
If Cecil Company chooses to pay within the discount period, they will be entitled to a cash discount. The journal entry for this scenario would be:
Debit: Accounts Payable - $40,000
Debit: Cash Discount - (2% of $40,000)
Credit: Cash - (Remaining amount after deducting the discount)
This entry reflects the decrease in the accounts payable by the discounted amount and the decrease in cash due to the payment made.
If the payment is made after the discount period (n/30), there will be no additional journal entries related to the payment. The accounts payable will be settled by paying the full amount within 30 days.
Overall, the journal entries will include the initial purchase of merchandise and potentially a payment entry if the discount is taken.
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