AMCO Limited sells video recorders for cash and on instalment sales. Details of video recorders sold on instalment sales: Cost price R750 Cash selling price R1 000 Deposit, 20% Balance payable in 36 instalments of R35 each commencing 1 month after sale. The company utilizes an interest suspense account and earns interest on the sum of the digits method. On 1 March 2019, the company sold 5 video recorders on instalment sales. REQUIRED Journal entries (including cash transactions) to record all the transactions relating to those 5 video recorders for the year ended 31 December 2019. (All calculations to the nearest Rand).

AMCO Limited sells video recorders for cash and on instalment sales. Details of video recorders sold on instalment sales: Cost price R750 Cash selling price R1 000 Deposit, 20% Balance payable in 36 instalments of R35 each commencing 1 month after sale. The company utilizes an interest suspense account and earns interest on the sum of the digits method. On 1 March 2019, the company sold 5 video recorders on instalment sales. REQUIRED Journal entries (including cash transactions) to record all the transactions relating to those 5 video recorders for the year ended 31 December 2019. (All calculations to the nearest Rand).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Carla Vista Garage Co. accepts the following forms of payment: Visa, MasterCard, the Carla Vista…

A: Journal entries recording is the initial step of accounting cycle process, under which atleast one…

Q: on june 30,2024 the esquire company sold some merchandise to a customer for $30000.in payment,…

A: A journal entry is a basic accounting record that is used to chronologically track financial…

Q: Sylvestor Systems borrows $185,000 cash on May 15 by signing a 150-day, 7%, $185,000 note. 1. On…

A: Journal: Recording of a business transactions in a chronological order.

Q: Alfred Company lends $40,000 with 9% interest to a customer on August 1, 2015, in exchange for a…

A: Interest revenue is credited for $1,500.

Q: A private enterprise sold some merchandise for $160,000 on January 1, 2020. The customer paid…

A: It is the current value of future sum of money to be received at specified interest rate

Q: On July 1, 2025, Agincourt Inc. made two sales. 1. It sold land having a fair value of $700,000 in…

A: A promissory note is a legal document where one party (the issuer or maker) promises to pay a…

Q: Massy Stores uses the gross method to record sales made on credit. On June 10, 2022, it made sales…

A: The account receivables represent the amount due from the customers during the period. The account…

Q: M&N Ltd sells security doors. Majority of its sales are on credit except small amount of cash sales…

A: Step 1 Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for…

Q: On July 1, 2025, Bonita Inc. made two sales. 1. 2. It sold land having a fair value of $901,000 in…

A: Calculation of discount on notes receivable.Calculations:-

Q: ABC Corporation began 2019 with an accounts receivable balance of $56,921. During 2019, ABC had…

A: The account receivables are also known with the name of debtors. These are the values due to a firm…

Q: Thames Water Ltd is registered for VAT and is in the process of completing its VAT return for the…

A: Sales:-Total Sales = £128,000Calculation of Discount:-Discount = Total Sales * Percentage of…

Q: On 03.03.20X1 TK sold goods at a price of EUR 35,000 plus VAT on target to the customer CB. TK will…

A: Lets understand the basics Journal entry is required to make to record event and transaction that…

Q: Blossom Corporation sells rock-dlimbing products and also operates an indoor dlimbing facility for…

A: Notes Payable: Notes Payable refers to a liability where a borrower records a written promise to…

Q: Malachi Department Store starts its business on May 1, 2022 and completes the following transactions…

A: Credit Card Sales are the sales when the customer pays through credit cards and the money transfer…

Q: Kimber Sales offers warranties on all their electronic goods. Warranty expense is estimated at 3.5%…

A: Journal entries are the entries to be recorded in the general journal of the company's books for all…

Q: Resin Milling issued a $420,000 note on January 1, 2018 to a customer in exchange for merchandise.…

A: Journal Entries: are the first recording of any transaction in the books of accounts. These entries…

Q: On January 1, 2018, The Barrett Company purchased merchandise from a supplier. Payment was a…

A: Given values: Note period = 5 years. Annual payment = $ 20000 Lump sum payment = $ 100000

Q: Prepare journal entries to record the following transactions which are independent of each other. 1.…

A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…

Q: Sage Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods…

A: Journal entry records every transaction by using the double-entry system. Sales as per net basis are…

Q: On February 1, 2024, a company lends cash and accepts a $2,500 note receivable that offers 20%…

A: Journal Entry :— It is an act of recording transactions in books of account when transaction…

Q: GRAPEFRUIT Co. Uses the NET method to record sales made on credit. On June 10, 2023, it made sales…

A: Accounts receivable: It can be defined as the amount that is owed by the customers from the business…

Q: McNamara Industries completed the following transactions during 2024: i (Click the icon to view the…

A: An expenditure relating to the repair, replacement, or reimbursement provided to a user for any…

Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

AMCO Limited sells video recorders for cash and on instalment sales. Details of
video recorders sold on instalment sales:
Cost price
R750
Cash selling price
R1 000
Deposit, 20%
Balance payable in 36 instalments of R35 each commencing 1 month after sale.
The company utilizes an interest suspense account and earns interest on the sum
of the digits method.
On 1 March 2019, the company sold 5 video recorders on instalment sales.
REQUIRED
Journal entries (including cash transactions) to record all the transactions relating
to those 5 video recorders for the year ended 31 December 2019.
(All calculations to the nearest Rand).
中

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Faeber Textile Company frequently factors its accounts receivable. During 2019, Faeber made credit sales of $100,000 to customers, under terms of 2/10, n/30. Faeber records its credit sales using gross price. In 2019, Faeber sold $70,000 of these receivables to a factor. The factor remitted 90% of the accounts receivable factored and charged a 12% commission on the gross amount of the factored receivables. The factoring agreement also requires Faeber to be responsible for any cash discounts taken by customers upon payment of the factored receivables. Faeber is charged for these cash discounts upon reimbursement by the factor. During 2019, the factor collected the remaining amount of the factored receivables, minus the 2% discount on 94% of the collected receivables, and returned the balance owed to Faeber. Faeber collected the remaining amount of the unfactored accounts receivable, minus the 2% discount on 96% of the collected receivables. Required: Prepare all the journal entries…
Rotel purchased merchandise from TechCom on October 17, 2019. TechCom accepted Rotel's $4,800, 90-day, 10% note as payment. TechCom has a December 31st year end. What entry should TechCom make on January 15, 2020 when the note is honoured? Multiple Choice Cash 4918.36 Interest Earned 19.73 Interest Receivable 98.63 Notes Receivable 4,800 Cash 4918.36 Interest Earned 98.63 Interest Receivable 19.73 Notes Receivable 4,800 Cash 4918.36 Notes Receivable 4918.36 Cash 4918.36 Interest Earned 118.36 Accounts Receivable 4,800 Cash 4918.36 Interest Earned 118.36 Notes Receivable 4,800 The Liccorish Pizza bought $5,000 worth of merchandise from TechCom and signed a 90-day, 10% promissory note for the $5,000. TechCom's journal entry to record the transaction is Multiple Choice Notes Receivable 5,125 Sales 5,125 Accounts…
Max Corp. sold goods for $36,000 on July 17, 2020, and accepted a 12%, 90-day note. On August 1, the note was sold to a bank at a 15% discount rate. Required: a. Compute the proceeds. Assume a 360-day year. b. If the maker dishonored the note at maturity, prepare the entry for Max Corp. assuming $75 of bank protest fees. If an amount box does not require an entry, leave it blank.
MOA sells gift cards that are redeemable only at its stores. The company's policy is to record the redemption amount as realized. MOA sold P1,800,000 worth of gift certificates in 2019 and redeemed P1,560,000 worth of gift certificates. The value of outstanding gift certificates as of January 1, 2019 is P520,000. The company's gross profit margin is 40%. What is the obligation for outstanding gift cards at the end of the fiscal year on December 31, 2019?
Grouper Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $550,100 (cost of $510,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,100. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Grouper for the full sales price. (a)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Grouper Company on January 2, 2020, and the payment on January 28, 2020. Assume that Grouper Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) (b)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Grouper Company on January 2, 2020, and the payment on January 28,…
Luna Company reported the following figures: 2020 2019 Net Credit Sales Account receivables at end of year $572,000 $38,700 $600,000 $46,100 Required: 1) Compute Luna's collection period of receivables for 2020. (Round to the nearest day) 2) Suppose Luna's normal credit terms for a sale on account are "2/10, n/30". How well does Luna's collection period compare to the company's credit terms? Is this good or bad for Luna Company?
The Rivers Company reports the following data relative to accounts receivable. The terms of sale are net 30 days. (check the attached photo) Requirement: (A) Compute the accounts receivable turnover and (B) the collection period.
On June 30, 2024, the Esquire Company sold some merchandise to a customer for $68,000. In payment, Esquire agreed to accept a 9% note requiring the payment of interest and principal on March 31, 2025. The 9% rate is appropriate in this situation. Required: Prepare journal entries to record the sale of merchandise (omit any entry that might be required for the cost of the goods sold), the December 31, 2024 interest accrual, and the March 31, 2025 collection. If the December 31 adjusting entry for the interest accrual is not prepared, by how much will income before income taxes be over- or understated in 2024 and 2025?