Question 1: J. designer just recently open as an upscale dress shop in hangu area. The owner is trying to decide whether to take the discount offered fron his suppliers, or whether to pay at the end of the month. J. suppliers are offering him a 5% discount if he pays within 20 days; otherwise, the balance is due 40 days after purchase. What are J. nominal and effective annual costs of trade credit ?

Question 1: J. designer just recently open as an upscale dress shop in hangu area. The owner is trying to decide whether to take the discount offered fron his suppliers, or whether to pay at the end of the month. J. suppliers are offering him a 5% discount if he pays within 20 days; otherwise, the balance is due 40 days after purchase. What are J. nominal and effective annual costs of trade credit ?

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Description: Question 1: J. designer just recently open as an upscale dress shop in hangu area. The owner is trying todecide whether to take the discount offered fron his suppliers, or whether to pay at the end of the month. J.suppliers are offering him a 5% dis

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Carla Vista Choice sells natural supplements to customers with an unconditional sales return if they are not satisfied. The sales returns extends 60 days. On February 10, 2021, a customer purchases on account $3500 of products (cost $1750). Assuming that based on prior experience, estimated returns are 20%. The journal entry to record the expected sales return includes a debit to Cash and a credit to Sales Revenue of $3500. debit to Sales Returns and Allowance of $700 and a credit to Allowance for Sales Returns and Allowances of $700. credit to Estimated Inventory Returns of $350. debit to Cost of Goods Sold and credit to Inventory for $1750.
Cost of Trade Credit A large retailer obtains merchandise under the credit terms of 3/10, net 35, but routinely takes 50 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
Identifying and Recording Customer Option for Additional Merchandise A large clothing retailer chain, Koll's, offers a sales incentive program where customers receive direct credit toward future purchases based upon the dollar amount of purchases today. For every $50 spent today, the customer will earn a $6 credit to be used at Koll's in two weeks. The credit expires 5 days after it becomes active. Not all customers will redeem the credit in the 5-day window of time. Based upon historical trends, Koll's estimates that 35% of the credits will be redeemed. a. Determine how many performance obligations are included in a sales transaction during the sales incentive program. Two performance obligations ◆ b. Assuming that Koll's sold $400,000 of merchandise (cost of $160,000) during the first day of the sales incentive period and 8,000, $6 credits were given, record the journal entry(ies) to record sales revenue. Assume all sales were cash sales. Note: Carry all decimals in calculations;…
A consumer purchase new furniture by borrowing $1,500 using the stores credit plan which charges 18% compounded monthly. What are the monthly payments if the loan is to be repaid in 3-years? $22.50 $45.48 $54.23 $90.52
A large retailer obtains merchandise under the credit terms of 3/10, net 40, but routinely takes 55 days to pay its bills. (Because the retailer is an important customer, suppliers allow the firm to stretch its credit terms.) What is the retailer's effective cost of trade credit? Assume a 365-day year. Do not round intermediate calculations. Round your answer to two decimal places.
A trade credit bill of $80,000 with terms of sale of 2/5, net 30 means the buyer saves if the bill is paid within the discount period A:1600 How much discount will a buyer receive if the buyer pays a trade credit bill of $60,000 with terms of sale of 2/5, net 30 on the net due date? A: 0

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