Beta Ltd manufactures laptops. Cellar Ltd routinely buys laptops from Beta Ltd. On 1 June 2021, Beta Ltd enters into a contract with Cellar Ltd to manufacture 100 laptops at $1 500 each. The laptops are shipped on 1 July 2021. To honour Cellar Ltd as a loyal customer, Beta Ltd allows Cellar Ltd to make the payment in 2 years' time without charging any interests. Implicit interest rate is 5%. What journal entries that Beta needs to make on 1 July 2021 to account for the revenue received from Cellar? O DR Cash $150,000; CR Revenue $136,054; CR Deferred interest $13,946 O DR Accounts receivable $150,000; CR Revenue $136,054: CR Deferred interest $13,946 DR Accounts receivable $150,000; CR Revenue $150,000 DR Cash $150,000; CR Revenue $150,000

Beta Ltd manufactures laptops. Cellar Ltd routinely buys laptops from Beta Ltd. On 1 June 2021, Beta Ltd enters into a contract with Cellar Ltd to manufacture 100 laptops at $1 500 each. The laptops are shipped on 1 July 2021. To honour Cellar Ltd as a loyal customer, Beta Ltd allows Cellar Ltd to make the payment in 2 years' time without charging any interests. Implicit interest rate is 5%. What journal entries that Beta needs to make on 1 July 2021 to account for the revenue received from Cellar? O DR Cash $150,000; CR Revenue $136,054; CR Deferred interest $13,946 O DR Accounts receivable $150,000; CR Revenue $136,054: CR Deferred interest $13,946 DR Accounts receivable $150,000; CR Revenue $150,000 DR Cash $150,000; CR Revenue $150,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sage Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $649,600 (cost of $550,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,600. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Sage for the full sales price. (a) Prepare the journal entry(ies) to record the sale and related cost of goods sold for Sage Company on January 2, 2020, and the payment on January 28, 2020. Assume that Sage 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 O for the amounts.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold)
Best Appliance Store offers a two-year warranty on all appliances sold. The company estimates that 5% of all appliances sold need to be serviced at an average cost of $50 each. At December 31, 2020, the Warranty Liability account had a balance of $19,000. During 2021, the store spends $10,000 repairing 200 appliances. An additional 3,500 appliances are sold in 2021. On the 2021 income statement, warranty expense will be: a. $8,750 Cb. $10,000 C. $8,500 d. $9,000
jaydip
Latvia Limited made a loan to Lithuania Incorporated in exchange for a $250,000 note on July 1, 2021.This note is for a period of seven years, with interest at 4% quarterly. Assume the market rate forcomparable loans is 8%. Prepare the journal entry in good form for Latvia Limited’s books
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.7 million cash on October 1, 2021, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each firm has a December 31 year-end. 2. Record the adjustments on December 31, 2021, for (a) Precision Castparts and (b) Midwest Bank. (Do not round intermediate calculations. If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in dollars, not in millions. For example, $5.5 million should be entered as 5,500,000.) Journal entry worksheet Record the adjusting entry for interest for Precision Castparts. Record the adjusting entry for interest for Midwest Bank. Note: Enter debits before credits. Date General…
On 1st July 2020 Bashir purchase a machine for RO 15,000. The terms of purchase was 20% cash and the balance to be paid in monthly instalments of RO 500. What amount of the loan will be disclosed under current liabilities in the balance sheet on 31 Dec 2020? a. RO 3,000 b. RO 6,000 c. RO 7,000 d. RO 5,000
On January 1, 2021, Tropical Paradise borrows $33,000 by agreeing to a 6%, four-year note with the bank. The funds will be used to purchase a new BMW convertible for use in promoting resort properties to potential customers. Loan payments of $775.01 are due at the end of each month with the first installment due on January 31, 2021. Record the issuance of the installment note payable and the first two monthly payments. (Do not round intermediate calculations. Round your final answers to 2 decimal places. If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)
On 1 January 2017, a company which prepares financial statement to 30 June each year buys € 400,000 of 5% loan notes for € 411,225. Interest will be received half-yearly on 30 June and 31 December and the loan notes will be repaid at a premium of 10% on 31 December 2020. The effective rate of interest is 3.5% per half year and the company intends to hold this investment until maturity. Calculate the amount of interest income that should be recognised in the company's financial statements for each of the years to 30 June 2017, 2018, 2019. Also calculate the amount at which the loan notes should be shown in the statement
Precision Castparts, a manufacturer of processed engine parts in the automotive and airline industries, borrows $40.4 million cash on October 1, 2024, to provide working capital for anticipated expansion. Precision signs a one-year, 9% promissory note to Midwest Bank under a prearranged short-term line of credit. Interest on the note is payable at maturity. Each company has a December 31 year-end. Required: 1. Prepare the journal entries on October 1, 2024, to record (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. 2. Record the adjusting entry on December 31, 2024, for (a) Precision Castparts and (b) Midwest Bank. 3. Prepare the journal entries on September 30, 2025, to record payment of (a) the notes payable for Precision Castparts and (b) the notes receivable for Midwest Bank. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entries on October 1, 2024, to record (a) the…
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,…
On 1 July 2021, McTavish Ltd, and organisation involved in the surfing industry, provided two weeks of surfing lessons to a group of middle-aged executives employed by Big Town Ltd. The lessons concluded on 15 July 2021. The contract required Big Town Ltd to make one payment of $20,000 to McTavish on 15 July 2021 and another payment of $20,000 on 15 July 2022. McTavish typically provides credit to such customers at an annual interest rate of 8%. Required:Prepare journal entries that McTavish Ltd needs to record to recognise revenues associated with the above surfing lessons on 15 July 2021 and on 15 July 2022 in accordance with AASB 15 Revenue from Contracts with Customers.
Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $630,700 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,700. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Riverbed for the full sales price. (a)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on January 28, 2020. Assume that Riverbed 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.) Date Account Titles and Explanation Debit Credit Choose date Jan 2 or Jan 28…