Blossom Inc. sells prepaid telephone cards to customers in its convenience stores. When Bl sells cards, it then pays the telecommunications company, Cullumber, for the value of the ca a 20% commission. Assume that Blossom receives $4,000 of prepaid cards in January 2025 Blossom sold 50% of the cards in February, 30% in March, and 20% in April. The total paym Blossom to Cullumber over the 3 months is $3,200.

Blossom Inc. sells prepaid telephone cards to customers in its convenience stores. When Bl sells cards, it then pays the telecommunications company, Cullumber, for the value of the ca a 20% commission. Assume that Blossom receives $4,000 of prepaid cards in January 2025 Blossom sold 50% of the cards in February, 30% in March, and 20% in April. The total paym Blossom to Cullumber over the 3 months is $3,200.

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

A offers $1,000 loans for up to 15 days for a flat fee of 5% of the principal due at the time of lending.B also offers $1000 loans. It charges $40 administrative fee at the time of lending, and interest rate of 56% per year. To make it easier for the customers B divides interest and principal into 52 equal weekly installments. Thus on a $1,000 loan a customer pays (1,000 (1.56)/52) = $30.00 every week. What effective annual interest rate each lender is charging. Which lender would you borrow from, if you need money for one year?
2. Assume F&S offers a “Fit 70” coupon book with 70 prepaid visits over the next year. F&S has learned that Fit 70 purchasers make an average of 60 visits before the coupon book expires. A customer purchases a Fit 70 book by paying $650 in advance, and for any additional visits over 70 during the year after the book is purchased, the customer can pay a $15 visitation fee per visit. F&S typically charges $15 to nonmembers who use the facilities for a single day.a. & b. Indicate below whether each item is a separate performance obligation. For each separate performance obligation you have indicated, allocate a portion of the contract price.c. Prepare the journal entry to recognize revenue for the sale of a new Fit 70 book
Osgood Appliance Centre is advertising refrigerators for six monthly payments of $199, including a payment on the date of purchase. What cash price should Osgood accept if it would otherwise sell the conditional sale agreement to a finance company to yield 18% compounded monthly? A)$1150.75 B) 1242.50 C )1352.02 D) 1298.78 E) 1045.87
Greenwell Farm Equipment sells a tractor to Farmer for $90,000 on January 1, 2025. The tractor is delivered that day. Greenwell agrees that the Farmer may delay the payment for 2 years. The market rate of interest is 8%. Refer to Greenwell Farms. How much sales revenue will Greenwell report on January 1, 2025? Use the formula approach.
Bahwan Automobiles is offering free credit of OMR25000 on a new corolla car. You pay OMR3000 down and then OMR500 a month for the next 25 months. OTE Motors in Sur does not offer free credit but will give you OMR3,000 off the list price. If the rate of interest is .5 % a month, which company is offering the better deal?
Simone Limited distributes specialist wines on wholesale basis to its customers. Some of his sales will be for cash from a shop that he intends to rent. It also plans to sell some wine on credit to local restaurants and hotels. The details of his business plan are as follows: It will rent a shop for GH¢10,000 per annum payable quarterly in The landlord also requires a deposit of GH¢5,000 to be paid when the rental starts in June. It will invest GH¢12,000 from its own savings and a bank will loan it GH¢8,000. Interest is to be charged at a rate of 5% per annum payable It will purchase and pay for GH¢12,000 of wine in June and To maintain that level of stock, he will continuously purchase wine to replace what is sold. Suppliers will allow one month’s credit and credit customers will expect one month’s Sales levels are predicted to be: Total sales GH¢ Cash sales GH¢ Credit sales GH¢ June 6,000 3,000 3,000 July 6,500 3,000 3,500…
Creative Computing sells a tablet computer called the Protab. The $785 sales price of a Protab Package includes the following: One Protab computer. • A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. ● • A coupon to purchase a Creative Probook e-book reader for $425, a price that represents a 50% discount from the regular Probook price of $850. It is expected that 20% of the discount coupons will be utilized. • A coupon to purchase a one-year extended warranty for $55. Customers can buy the extended warranty for $55 at other times as well. Creative estimates that 45% of customers will purchase an extended warranty. Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $765. All Protah salos r ●
A washer-dryer combination can be purchased from a department store by making monthly credit card payments of $43.02 for three-and-a-half years. The first payment is due on the date of sale and interest is 15% compounded monthly. (a) What is the purchase price? (b) How much will be paid in installments? (c) How much is the cost of financing? (d) If an additional $8.50 per month is added to cover a service contract, what is the value of the entire contract on the date of sale?
Foxtrot Corporation is purchasing a new Ford Transit delivery van for $24,600. Its lender requires a maximum loan to value ratio of 80% on the purchase price of the vehicle. The term of the loan is 5 years. The interest rate is 5% APR. The loan is a closed end credit loan. There is no trade-in. Sales tax is 7%. Documentation fee is $275. a. What is the total cost of the delivery van including purchase price, sales tax, and documentation fee; and how much is classified as an asset on the balance sheet and how much is classified as an expense on the income statement? b. How much cash must Foxtrot Corporation have to make the down payment? c. How much of the first monthly payment will be interest and how much of the last monthly payment will be interest?
Mammoth Publishing, Incorporated owns a weekly magazine called “Nova Health,” and sells annual subscriptions for $86. Customers prepay their subscription fee and receive 52 issues starting in the following month. The company also offers new subscribers a 30% discount coupon on its other weekly magazine called “Fishing & Camping,” which has a list price of $70 for an annual subscription. Mammoth estimates that approximately 10% of the discount coupons will be redeemed.\\n\\nRequired:\\n(a) How many performance obligations are in a single subscription contract?\\n\\n(b) Prepare the journal entry to account for one new subscription of “Nova Health,” clearly identifying the revenue or deferred revenue associated with each performance obligation.
Creative Computing sells a tablet computer called the Protab. The $890 sales price of a Protab Package includes the following: • One Protab computer. • A 6-month limited warranty. This warranty guarantees that Creative will cover any costs that arise due to repairs or replacements associated with defective products for up to six months. • A coupon to purchase a Creative Probook e-book reader for $270, a price that represents a 40% discount from the regular Probook price of $450. It is expected that 25% of the discount coupons will be utilized. • A coupon to purchase a one-year extended warranty for $65. Customers can buy the extended warranty for $95 at other times if they do not use the $65 coupon. Creative estimates that 30% of customers will purchase an extended warranty. • Creative does not sell the Protab without the limited warranty, option to purchase a Probook, and the option to purchase an extended warranty, but estimates that if it did so, a Protab alone would sell for $870.…
Cooper Stereos has a $22,500 line of credit which charges an annual percentage rate of prime rate plus 5.5%. Their starting balance on October 1 was $11,100. On October 10 they borrowed $5,500. On October 16 the business made a payment of $1,500, and on October 23 they borrowed $4,200. If the current prime rate is 6%, what is the new balance?