Answered: A customer buys a company product on…

A customer buys a company product on the internet for $1,000 with bitcoins. At the end of the year he bit coins are worth $5,000. The company's income statements show sales of $1,000. Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 4MC: A car dealership sells a car to a customer for $35,000. The customer makes a 10% down payment, and...

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Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them set up their new computers. Uptons balance sheet as of December 31, 2019, is shown here (millions of dollars): Sales for 2019 were 350 million, and net income for the year was 10.5 million, so the firms profit margin was 3.0%. Upton paid dividends of 4.2 million to common stockholders, so its payout ratio was 40%. Its tax rate was 25%, and it operated at full capacity. Assume that all assets/sales ratios, (spontaneous liabilities)/sales ratios, the profit margin, and the payout ratio remain constant in 2020. a. If sales are projected to increase by 70 million, or 20%, during 2020, use the AFN equation to determine Uptons projected external capital requirements. b. Using the AFN equation, determine Uptons self-supporting growth rate. That is, what is the maximum growth rate the firm can achieve without having to employ nonspontaneous external funds? c. Use the forecasted financial statement method to forecast Uptons balance sheet for December 31, 2020. Assume that all additional external capital is raised as a line of credit at the end of the year. (Because the debt is added at the end of the year, there will be no additional interest expense due to the new debt.) Assume Uptons profit margin and dividend payout ratio will be the same in 2020 as they were in 2019. What is the amount of the line of credit reported on the 2020 forecasted balance sheets? (Hint: You dont need to forecast the income statements because the line of credit is taken out on the last day of the year and you are given the projected sales, profit margin, and dividend payout ratio; these figures allow you to calculate the 2020 addition to retained earnings for the balance sheet without actually constructing a full income statement.)
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni’s owners. For each of the following transactions, identify the real and/or financial assets that trade hands. Are any financial assets created or destroyed in the transaction?a. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over 3 years.b. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. c. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,500 shares of Microsoft stock.d. Lanni sells the shares of stock for $50 per share and uses part of the proceeds to pay off the bank loan.
On January 1, 2025, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing $91,316 cash. The new company, Sheffield Sales and Service, has the following transactions during January. 1. Pays $12,000 in advance for 3 months rent of office, showroom, and repair space. 2. Purchases 42 personal computers at a cost of $1,664 each, 8 graphics computers at a cost of 5 2,664 each, and 27 printers at a cost of $464 each, paying cash upon delivery. 3. Sales, repair, and office employees earn $13,916 in salaries and wages during January, of which $4, 316 was still payable at the end of January. 4. Sells 32 personal computers at $2,714 each, 6 graphics computers for $3, 764 each, and 17 printers for $664 each; 576,316 is received in cash in January, and $44, 404 is sold on a deferred payment basis. 5. Other operating expenses of $9, 716 are incurred and paid for during January: $3,316 of incurred expenses are payable at January 31. (a) Using.…
On July 01, 2020, Maria initially invested P200,000 cash into Maria Merchandising. On the same date, she paid P45,000 for six months rent on the store space, P10,000 for business licenses and permits, and P50,000 for various store furniture. She also bought P60,000 worth of office supplies on account with the intention to sell them at a higher price. However, the next day, the business received a P1,500 credit memo for allowance granted on the purchased merchandise. The supplies were bought from 123 Supplies Store on terms n/60. On July 6, the business bought from 45 Supplies Shop P5,000 worth of supplies to be used in the store on terms 50% downpayment, balance n/30. Francisco, a part time employee, was able to sell on July 12 some of the store's merchandise to Mr. Sam for P16,000 on terms 50% downpayment, balance 2/10, n/30. On July 24, the business sold to Mrs. Aslani merchandise for P12,000 on terms 2/10, n/30. On July 30, Mr. Boom paid the business P42,000 for merchandise bought…
Mr. Sojo opened up a merchandising business on October 1, 2019 with a cash investment of P50,000. The following activities were given: Cash received from customers 205,000.00 Cash borrowed from the bank 150,000.00 Utilities, salaries, supplies and rent paid 115,000.00 Cash paid to the bank 50,000.00 Cash purchase for equipment 100,000.00 Cash purchase for furniture 25,000.00 Equipment bought on credit 150,000.00 Additional investment 200,000.00 Withdrawal 40,000.00 Additional information;1. Supplies amounted to 20% of the…
On the 3rd of January, you have Php50,000 in the bank. The day after, your friend asked you to loan them Php10,000 and you bought a laptop worth Php30,000 in the afternoon for yourself because you deserve it. Afterward, on the 2nd of February, your friend paid half of their loan to you and you used that cash to buy some groceries. What are the journal entries up to that point and what does the journal look like as well? For the journal entries, specify the dates, the accounts, and the debit and credit inputs. As for the ledger entries, use the 'T' presentation method presented during your lectures.
On January 1, 2020, Norma Smith and Grant Wood formed a computer sales and service company in Soapsville, Arkansas, by investing $90,000 cash. The new company, Arkansas Sales and Service, has the following transactions during January. 1. Pays $6,000 in advance for 3 months’ rent of office, showroom, and repair space. 2. Purchases 40 personal computers at a cost of $1,500 each, 6 graphics computers at a cost of $2,500 each, and 25 printers at a cost of $300 each, paying cash upon delivery. 3. Sales, repair, and office employees earn $12,600 in salaries and wages during January, of which $3,000 was still payable at the end of January. 4. Sells 30 personal computers at $2,550 each, 4 graphics computers for $3,600 each, and 15 printers for $500 each; $75,000 is received in cash in January, and $23,400 is sold on a deferred payment basis. 5. Other operating expenses of $8,400 are incurred and paid for during January; $2,000 of incurred expenses are payable at January 31.…
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 1,000 shares of Microsoft stock. Lanni sells the shares of stock for $140 per share and uses part of the proceeds to pay off the bank loan. Required: a-1. Prepare its balance sheet just after it gets the bank loan. a-2. What is the ratio of real assets to total assets? (Round your answer to 1 decimal place.) b-1. Prepare the balance sheet after Lanni spends the $70,000 to develop its software product, with the…
Lanni Products is a start-up computer software development firm. It currently owns computer equipment worth $30,000 and has cash on hand of $20,000 contributed by Lanni's owners. Lanni takes out a bank loan. It receives $50,000 in cash and signs a note promising to pay back the loan over three years. Lanni uses the cash from the bank plus $20,000 of its own funds to finance the development of new financial planning software. Lanni sells the software product to Microsoft, which will market it to the public under the Microsoft name. Lanni accepts payment in the form of 2,000 shares of Microsoft stock. Lanni sells the shares of stock for $70 per share and uses part of the proceeds to pay off the bank loan. a-1. Prepare its balance sheet just after it gets the bank loan. a-2. What is the ratio of real assets to total assets? (Round your answer to 1 decimal place.) b-1. Prepare the balance sheet after Lanni spends the $70,000 to develop its software product, with the software…
PLEASE TYPE IT AND NOT HANDWRITTEN If you purchased shoes and bags from a department store and used your credit card, the purchase amounted to P12,000, and you decided to pay it in 18 months at 21% APR, compute the finance charge.
If the total Accounts Receivable of HAPPY ENTERPRISES is 560,000 and gives its customers a 5% discount if their accounts are settled within 10 days, the discount period. What amount of cash would be receive by the enterprise, supposing that it is a VAT paying business and that its customers were able to pay within the discount period.
The following are the transactions of Taki traders for the month of June 2020: June 01: The business owner paid €40,000 into the business account. June 01: Bought goods for resale €7,000 paying by cheque. June 01: Bought a vehicle for €15,000 paying by cheque. June 02: Paid rent €3,000 paying by cheque. June 03: Paid insurance €2,200 paying by cheque. June 04: Bought goods for resale €6,000 paying by cheque. June 05: Sold goods for €4,500 and immediately banked the cheque. June 06: Paid wages €2,400 paying by cheque. June 07: Bought goods for resale €8,000 paying by cheque. June 08: Sold goods for €6,500 immediately banking the cheque. June 20: Paid business rates €3,900, paying by cheque. June 30: Sold goods for €2,000, immediately banking the cheque. Required (a) Write up the above transactions in the appropriate ledger accounts and balance them off. (b) Ledgers help to organize accounting information into categories normally known as ‘’classes’’. With examples explain the nature…