Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
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Chapter 5, Problem 20E
a.
To determine
Record the year-end
b.
To determine
Record the year-end adjusting journal entry for future sales discounts on December 31.
c.
To determine
Explain whether allowance for sales discounts is a contra asset or a contra liability account.
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buying and sellingWhat is the total cash discount if an invoice dated March 31 for P 15,000 with a payment terms of 3/20; 1/30; n/60 is paid in full on April 20?
Hi expart Provide correct solution
n the credit account statement below, the values of the annual percentage rate (APR), finance charge, and the new balance must be calculated.
PreviousBalance
AnnualPercentageRate (APR)
MonthlyPeriodicRate(as a %)
FinanceCharge(in $)
Purchasesand CashAdvances
PaymentsandCredits
NewBalance(in $)
$1,026.61
1.75%
$322.20
$300.00
Recall that the annual percentage rate (APR) is tied to the monthly periodic rate by the following formula.
monthly periodic rate =
APR
12
By solving this equation for the APR, the known value for the monthly periodic rate can be substituted to calculate the APR.
APR = monthly periodic rate ✕ 12
The monthly periodic rate is given to be 1.75%. Find the APR.
APR
=
12 ✕ monthly periodic rate
=
12 ✕ ____ %
=
____%
Chapter 5 Solutions
Principles of Financial Accounting.
Ch. 5 - Prob. 1MCQCh. 5 - Prob. 2MCQCh. 5 - Prob. 3MCQCh. 5 - Prob. 4MCQCh. 5 - A companys net sales are 675,000, its cost of...Ch. 5 - Prob. 1DQCh. 5 - In comparing the accounts of a merchandising...Ch. 5 - Prob. 3DQCh. 5 - Prob. 4DQCh. 5 - How does a company that uses a perpetual inventory...
Ch. 5 - Distinguish between cash discounts and trade...Ch. 5 - Prob. 7DQCh. 5 - Prob. 8DQCh. 5 - Prob. 9DQCh. 5 - What is the difference between the single-step and...Ch. 5 - APPLE Refer to the balance sheet and income...Ch. 5 - Prob. 12DQCh. 5 - Prob. 13DQCh. 5 - Prob. 14DQCh. 5 - Prob. 15DQCh. 5 - QUICK STUDY Applying merchandising terms C1 P1...Ch. 5 - Identifying inventory costs Costs of 5,000 were...Ch. 5 - Prob. 3QSCh. 5 - Question: Compute the amount to be paid for each...Ch. 5 - Recording purchases, returns, and discounts taken...Ch. 5 - Prob. 6QSCh. 5 - Prob. 7QSCh. 5 - Prob. 8QSCh. 5 - Accounting for shrinkageperpetual system P3 Nix'It...Ch. 5 - Closing entries P3 Refer to QS 4-9 and prepare...Ch. 5 - Prob. 11QSCh. 5 - Prob. 12QSCh. 5 - Prob. 13QSCh. 5 - Computing and interpreting acid-test ratio Use the...Ch. 5 - Prob. 15QSCh. 5 - Contrasting periodic and perpetual systems...Ch. 5 - Prob. 17QSCh. 5 - Prob. 18QSCh. 5 - Prob. 19QSCh. 5 - Prob. 20QSCh. 5 - Prob. 21QSCh. 5 - Prob. 22QSCh. 5 - Prob. 23QSCh. 5 - Prob. 1ECh. 5 - Prob. 2ECh. 5 - Prob. 3ECh. 5 - Prob. 4ECh. 5 - Recording purchases, purchases returns, and...Ch. 5 - Recording sales, purchases. and cash...Ch. 5 - Prob. 7ECh. 5 - Inventory and cost of sales transactions in...Ch. 5 - Prob. 9ECh. 5 - Prob. 10ECh. 5 - Prob. 11ECh. 5 - Impacts of inventory error on key accounts P3 A...Ch. 5 - Impacts of inventory error on key accounts P3 A...Ch. 5 - Prob. 14ECh. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Recording purchases, returns, and allowances...Ch. 5 - Recording sales, purchases, and cash...Ch. 5 - Prob. 19ECh. 5 - Prob. 20ECh. 5 - Recording estimates of future returns P6 Chico...Ch. 5 - Prob. 22ECh. 5 - Recording sates, purchases. shipping. and...Ch. 5 - Recording purchases, sales, returns, and...Ch. 5 - Prob. 25ECh. 5 - Preparing journal entries for merchandising...Ch. 5 - Prob. 2APCh. 5 - Prob. 3APCh. 5 - Prob. 4APCh. 5 - Prob. 5APCh. 5 - Preparing journal entries for merchandising...Ch. 5 - Prob. 2BPCh. 5 - Prob. 3BPCh. 5 - Prob. 4BPCh. 5 - The following unadjusted trial balance is prepared...Ch. 5 - This serial problem began in Chapter 1 and...Ch. 5 - Prob. 1AACh. 5 - Prob. 2AACh. 5 - Prob. 3AACh. 5 - Prob. 1BTNCh. 5 - You are the financial officer for Music Plus, a...Ch. 5 - Prob. 3BTNCh. 5 - Prob. 5BTN
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- Calculate the average daily balance (in $) for October for a revolving credit account with a previous month's balance of $120 and the following activity. (Round your answer to the nearest cent.) Date Activity Amount October 3 Cash advance $50.00 October 7 Payment $75.00 October 10 Purchase $28.59 October 16 Credit $10.00 October 25 Purchase $124.60 average daily balance = $?arrow_forwardCalculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. (Round dollars to the nearest cent.) PreviousBalance AnnualPercentageRate (APR) MonthlyPeriodicRate(as a %) FinanceCharge(in $) Purchasesand CashAdvances PaymentsandCredits NewBalance(in $) $1,025.61 % 1% $ $322.20 $400.00 $arrow_forward(Bonus Question 02) Record the sale by Verity Springs, Inc. of $136,000 in accounts receivable on May 1. Verity Springs is charged a 3.00% factoring fee. View transaction list Journal entry worksheet < 1 Record the sale of receivable. Note: Enter debits before credits. Date May 01 General Journal Debit Creditarrow_forward
- Required: Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account. Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 Journal Entries Date Particulars Debit($) Credit($) 10.1.20 Accounts Receivable 11000 To sales 11000 15.5.20 Allowance for uncollectible accounts(2500+400) 2900 To accounts receivable 2900 4.8.20 Cash(70% of 11000) 7700 Allowance for uncollectible accounts(30% of $11000) 3300 To Accounts Receivable 1100 26.10.20 Accounts Receivable(30% of $400) 120 To allowance for uncollectible accounts 120 26.10.20 Cash 120 To accounts receivable 120…arrow_forwardAn invoice dated January 25 with terms 2/10 -20 X. Find the final discount rate and the next payment date. The net payment date is 20 days after the final discount date. Assume it is not a leap year final dicount- net payment-arrow_forwardChoose the letter of answer and solution A company reports the following data relative to accounts receivable: Average accounts receivable of P400,000.00 and P416,000.00 in FYs 2021 and 2020, respectively; and Net Credit Sales of P2,600,000.00 and P3,100,000.00 in FYs 2021 and 2020, respectively. The term of sale are net 30 days. Compute the accounts receivable turnover and the collection period in FY 2021. * a. 6.5 times and 56.2 daysb. 7.45 times and 49 daysc. 7.5 times and 56.2 daysd. 6.5 times and 49 daysarrow_forward
- QUESTION 1 Following are transactions related to the accounts receivable of Jelutong Idaman Bhd (JIB) during the first quarter ending 31 March 2021. JIB prepares interim fmancial statem ents for every quarter. 8 January Sold goods for RM150,000 on credit. JIB uses the gross method in recording accounts receivable. The term of the sale is 2/10, n'60. 14 January Collected RM50,000 from 8 January's credit customers. 26 January Unexpectedly, a customer, Semarak Api Enterprise, whose account has been written off in early 2021 paid RM8,000 for the total amount owed. 30 January Assigned RM120,000 of accounts receivable from December 2020 sales to Merbau Bank Bhd (MBB), as security for a loan of RM100,000. A commission of 4% on the face amount of the loan was charged, and the note bears interest of 9% per year. 28 February Collected RM80,000 of accounts receivable assigned and remitted it to MBB, along with one month's interest. 31 March Data related to accounts receivable are as follows:…arrow_forwardThe entry to record a payment on a $690 account within the 2% discount period would include a: A. debit to Accounts Payable for $676. B. debit to Purchases for $676. C. debit to Accounts Payable for $690. D. debit to Cash for $690.arrow_forwardCalculate the missing information on the revolving credit account. Interest is calculated on the unpaid or previous month's balance. (Round dollars to the nearest cent.) Monthly Annual Finance Purchases Payments and New Previous Periodic Percentage Rate (APR) Charge (in $) and Cash Balance Balance Rate Advances Credits (in $) (as a %) $1,027.61 % 1.25% $322.20 $200.00 $arrow_forward
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