Concept explainers
Exercise 2-50 Journalizing Transactions
Remington Communications has been providing cellular phone service for several years. During
November and December. the following transactions occurred:
Nov. 2 Remington received S2,400 for November phone service from Enrico Company. 10
6 Remington purchased S4,750 of supplies from Technology Associates on
10 Remington paid S5,250 to its hourly employees for their weekly wages.
15 Remington paid S4, 750 to Technology Associates in full settlement Of its payable.
28 Remington paid S2, 150 for utilities used during November.
30 Remington received a bill from Monticello Construction for Sl,230 for repairs made to
Remington’s loading dock on November I S. Remington plans to pay the bill in early December.
Dec. 10 Remington paid S I ,230 to Monticello Construction to settle the repair bill received on
Trending nowThis is a popular solution!
Chapter 2 Solutions
Cornerstones of Financial Accounting
- Question Content Area On October 1, Black Company receives a 4% interest-bearing note from Reese Company to settle a $17,400 account receivable. The note is due in six months. At December 31, Black should record interest revenue of a. $174 b. $181 c. $171 d. $184arrow_forwardAriel Enterprises purchases 32 cellular telephones on credit from a manufacturer on November 3 at a price of $400 per phone. Terms of the purchase are 3/5, n/30 with an invoice date of November 3. Ariel Enterprises pays in full for the phones on November 6. Create the journal entries for Ariel Enterprises for the following transactions. A. the initial purchase B. the subsequent payment on November 6arrow_forwardMonitoring of Receivables The Russ Fogler Company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows: Throughout this entire period, the firm’s credit customers maintained a constant payments pattern: 209b paid in the month of sale, 309b paid in the first month following the sale, and 509b paid in the second month following the sale. What was Fogler’s receivables balance at the end of March and at the end of June? Assume 90 days per calendar quarter. What were the average daily sales (ADS) and days sales outstanding (DSO) for the first quarter and for the second quarter? What were the cumulative ADS and DSO for the first half-year? Construct an aging schedule as of June 30. Use account ages of 0-30, 31-60, and 61-90 days. Construct the uncollected balances schedule for the second quarter as of June 30.arrow_forward
- Notes Payable Rogers Machinery Company borrowed $330,000 on February 1, with a 6-month, 10%, interest-bearing note. Required: 1. Record the borrowing transaction. 2. Record the repayment transaction.arrow_forwardProblem 29 Cabanes Factors provides financing to other companies by purchasing their accounts receivable on a non-recourse basis. Cabanes charges a commission to its clients of 15% of all receivables factored. In addition, Cabanes withholds 10% of receivables factored for protection against sales returns or adjustments. Cabanes credits the 10% withheld to Client Retainer and makes payments to clients at the end of each month so that the balance in the retainer is equal to 10% of unpaid receivables at the end of the month. Cabanes recognizes its 15% commissions as revenue at the time the receivables are factored. Also, experience has led Cabanes to establish allowance for bad debts of 4% of all receivables purchased. On January 2, 2021, Cabanes purchased receivables from Cabana Company totaling P3,000,000. Cabana has previously established an allowance for bad debts for these receivables of P100,000. By January 31, Cabanes had collected P2,500,000 on these receivables.…arrow_forwardQuestion 22arrow_forward
- Question 36 A company has daily purchases of $10,000 from its supplier. The supplier offers trade credit under the following terms: 3/20, net 50 days. The company finally chooses to pay on time (pay in the 50th day) but not to take the discount. We assume 365 days per year. What is the average level of the company’s free trade credit? ______ $30,000 $170,000 $200,000 $300,000 Question 37 Based on the information from Question 36, what is the average level of the company’s total trade credit? $170,000 $200,000 $300,000 $500,000 38 . Based on the information from Question 36, what is the average level of the company’s costly trade credit? $170,000 $200,000 $300,000 $500,000 Question 39 Based on the information from Question 36, what is the nominal annual cost of the firm’s costly trade credit? 28.6% 29.3% 33.5%…arrow_forwardQuestion 12 On August 1, 2020, Alba Trading sold a machine for $13,000 cash with a two-year parts warranty. On March 1, 2021, the machine requires on-site repairs which cost $200 of the repair parts inventory. Alba estimates warranty costs to be 4% of dollar sales. In 2020, Alba reports warranty expense of: O A. $ 720. O B. $ 320. O C. $ 520. O D. $ 200.arrow_forward10 month of december has 31 daysarrow_forward
- Chapter 10, Question 10: American Paging, Inc., is the seventh largest paging company in the United States. In a recent balance sheet, it reported a current liability of $8,452,379 that was labeled Unearned Revenues and Deposits. A note to the financial statements explained: “Unearned revenues and deposits primarily represent monthly charges to customers for radio paging rental and dispatch billed in advance. Such revenues and deposits are recognized in the following month when service is provided or are applied against the customer’s final bill or last month’s rent.” Required: What basic principle of accounting guides American Paging’s handling of its unearned revenues and deposits? Chapter 10, Question 16: What are contingent liabilities? List three examples of contingent liabilities. When should contingent li-abilities be recorded in the accounts? Chapter 11 - Question 2: (a) What is meant by the limited liability of a stockholder? (b) Does this characteristic enhance or reduce a…arrow_forwardIn detail pleasearrow_forwardRecording Purchase of Equipment through Debt Relay Company purchases equipment by making a down payment of $28,000 cash. In addition, Relay signs a note requiring monthly payments of $5,600, starting one month after purchase and continuing for a total of 20 months. The contract calls for no interest, yet the prevailing interest rate is 12% on similar transactions. a. Record the entry required for the purchase of this equipment. b. Record the entry to recognize interest expense, one month after this purchase. Ignore the cash payment part of the transaction. • Note: Round your answers to the nearest whole number. a. b. Account Name To record the purchase of equipment. To record the interest incurred. Dr. Cr.arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeIntermediate Financial Management (MindTap Course...FinanceISBN:9781337395083Author:Eugene F. Brigham, Phillip R. DavesPublisher:Cengage Learning
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning