Using the gross profit method-the estimated inventory

Assignment Help Financial Management

Reference no: EM131063391

Plaza North sells a variety of merchandise to retail stores on open account, but insists that any customer who fails to pay an invoice when due must replace it with an interest-bearing note. The company adjusts and closes it accounts at December 31. Among the transactions relating to notes receivable where the following: Nov. 1. Received from a customer, Hill Stores, a 14% six-month note for $18,000 in settlement of an account receivable due today. May 1. Collected in full the 14% note from Hill Store. a. Prepare the entries to record (1) the receipt of the note on November 1; (2) the adjustment for interest on December 31; and (3) the collection of the note on May 1. b. Assume that instead of paying the note on May 1, Hill Stores had defaulted. 12. During January, Sundown Corporation had net sales of $300,000, the beginning inventory was $100,000, merchandise purchased was $500,000 and a cost of goods available for sale of $600,000. The company consistently earns a gross profit rate of 45%. Using the gross profit method, the estimated inventory at January 31 amounts to.

Reference no: EM131063391

Questions Cloud

What are the mean free path in the gas : During a physics experiment, helium gas is cooled to a temperature of 20.0k at a pressure of 0.150 atm. What are the mean free path in the gas

Compute cost of goods sold for each of the five years : Compute cost of goods sold for each of the five years if the company uses the following: LIFO cost flow assumption, FIFO cost flow assumption and Averaging cost flow assumption

Definition for each of operation management : What is the relation between managing the supply chain, managing inventory, aggregate scheduling and why operation management ordered this phases in this way? What is the definition for each of them in operation management?

Using the gross profit method-the estimated inventory : Plaza North sells a variety of merchandise to retail stores on open account, but insists that any customer who fails to pay an invoice when due must replace it with an interest-bearing note. The company adjusts and closes it accounts at December 31. ..

Project phase and in the middle of a project : However, a recently discovered or reported variance of 100% in a particular project phase and, in the middle of a project, is cause for immediate action! What action would you have taken, and in what part of the planning cycle, to perhaps, prevent..

Market risk premium-preferred stock outstanding : You are given the following information for Watson Power Co. Assume the company’s tax rate is 40 percent. Debt: 8,000 6.3 percent coupon bonds outstanding, $1,000 par value, 20 years to maturity, selling for 106 percent of par; the bonds make semiann..

Equity multiplier and return on equity nuber company : Question 1. Equity Multiplier and Return on Equity Nuber Company has a debt-equity ratio of .80. Return on assets is 9.7 percent, and total equity is $735,000. What is the equity multiplier? Return on equity? Net income?

Determining the qualitative risk analysis : Once the risks facing the project are identified, a determination of their relative priority for attention by the project team and resource investment by the organization must be determined.

User Account

All Pages