Magenta Company purchased a machine from Pink Corporation on October 31, 2021. In payment for the $292,000 purchase, Magenta issued a one-year installment note to be paid in equal monthly payments of $25,944 at the end of each month. The payments include interest at the rate of 12%. The amount of interest expense that Magenta will report in its income statement for the year ended December 31, 2021, is:

Q: Green Industries purchased a machine from Cyan Corporation on October 1, 2021. In payment for the…

A: Calculate the monthly interest rate.

Q: On January 1, 2019, Northern Manufacturing Company bought a piece of equipment by signing a…

A: Fair value of equipment = Present value of installments       Quarterly installments $20,000.00…

Q: On December 31,2021, Teresa Co. sold goods costing ₱300,000 and with sales price of ₱550,000 to…

A: On 31.12.2021, Teresa Co. sold goods to Perfina Inc. on account = P550000 Cost of sales = P300000…

Q: On April 1, 2021, John Vaughn purchased appliances from the Acme Appliance Company for $1,200. In…

A:

Q: The following transactions transpired during the year for Teresa Company: • On January 1,2021,…

A: Since we answer upto three sub-parts, we shall answer first three. Please resubmit a new question…

Q: On September 1, 2021, Middleton Corp. lends cash and accepts a $5,000 note receivable that offers…

A: Interest = Principal x rate of interest x no. of months / 12 months

Q: Soundgarden Company sold 200 color laser copiers on July 10, 2020, for $4,000 apiece, together with…

A: Definition:   Warranty expense: It is an estimated expense which arises when the company sells the…

Q: On June 1, Davis Inc. issued an $76,100, 12%, 120-day note payable to Garcia Company Assume that the…

A: No. of days for which interest to be recognized in the following year = Total days of notes - total…

Q: Wildhorse Co. issued a five-year interest-bearing note payable for $324000 on January 1, 2019. Each…

A: Balance sheet is the financial statement which involves the total debt, liabilities, assets and…

Q: The Richards Company paid for a five-year extended warranty on all of their equipment on March 1,…

A: If any warranty charges has been paid in advance , we need to write that expenditure in proportion…

Q: On the first day of each month, Bell Company received from Kaye Company an escrow deposit of…

A: The term escrow means the holding of an asset or money by a third person or party before…

Q: On September 1, 2019, Donna Equipment signed a one-year, 8% interest bearing note payable for…

A: Note means an instrument acknowledging as debt due from one party to another party. Interest bearing…

Q: a. How much is the amortization expense for the year 2021? b. How much is the franchise fee expense…

A: Purchase amount of franchise = 3,125,000 The estimated useful life of the franchise = 10 years…

Q: On July 31, 2020, Ivanhoe Company engaged Minsk Tooling Company to construct a special-purpose piece…

A: SOLUTION- ACCUMULATED DEPRECIATION  IS THE TOTAL AMOUNT AN ASSET HAS BEEN DEPRECIATED UP UNTIL A…

Q: Vim Company purchased an equipment on January 1, 2021 for P3,000,000 cash for the purpose of leasing…

A: Working Notes:-                                                       In this case Vim Co. the…

Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…

A: Definition: Installment note: Installment note is an obligation in which the defaulter needs to…

Q: On December 31, 2021, Boston Company purchased a machine from Helix Company in exchange for a…

A: Non bearing interest notes are capitalized at present value of future installments. Hence the…

Q: On July 01, 2022, Honesty  Corporation sold a set of washing machine and a dryer for a total…

A: Interest is calculated on the amount outstanding at the end of each quarter.

Q: A company sold 8,000 units of its signature product for the calendar year ended December 31, 2020.…

A: The provision for warranty is created to record the estimated warranty Expenses for the period. The…

Q: What is the carrying value of the franchise at December 31, 2022?  How much is the amortization…

A: As Per Ind As 38 and IAS 38 : - A. An intangible asset is an identifiable non-monetary asset without…

Q: At the beginning of 2021 VHF Industries acquired a machine with a fair value of 7,985,420 by issuing…

A: Note payable is the liability which increases due to the purchases made on credit.

Q: .On April 1,2021, Beauty Company purchased a franchise for P3,000,000. In addition, the franchise…

A: As per IFRS 38, Intangible Assets shall be amortized on a systematic basis over its useful life.

Q: On June 1, Davis Inc. issued an $68,700, 8%, 120-day note payable to Garcia Company Assume that the…

A: Solution We are provided with the following information Interest rate = 8% Amount of note payable =…

Q: Company AAA borrowed P1,000,000 on July 1, 2021 and issued a 9% one-year note payable every after…

A: Note payable is one of the liability of the business, on which regular interest payments needs to be…

Q: Holly Springs, Inc. contracted with Coldwater Corporation to have constructed a custom-made lathe.…

A: As per IAS 16, the assets are acquired, and consideration is deferred, the cash market price of such…

Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…

A: Note payable is a note that is issued by the borrower specifying the terms and conditions pertaining…

Q: On July 1, 2021, Emerald Corporation sold a set of washing machine and a dryer for a total contract…

A: Revenue to be recognized on this contract on July 1, 2021 = Lumpsum price of washing machine and…

Q: On January 1, 2019, Northern Manufacturing Company bought a piece of equipment by signing a…

A: Notes payable are long-term commitments that indicate the amount of money owing by a company to its…

Q: On January 1, 2021, Beaver Tours financed the purchase of a new building by borrowing $600,000 from…

A: Journal: Recording of a business transactions in a chronological order.

Q: On January 1, 2020, Caribou Explorations Limited (CEL) sold inventory costing $32,000 and, in…

A: Journal entry A journal entry is a record of the business transactions within the accounting books…

Q: On January 1, 2021, Chantal Company purchased equipment from Heidi Company amounted to P2,400,000.…

A: The question is based on the concept of business accounting.

Q: The following transactions transpired during the year for Teresa Company: • On January 1,2021,…

A: NOTE : As per BARTLEBY guidelines, when multiple questions are given, then first question is to be…

Q: On July 1, 2021, Guarin Co. obtained fire insurance for a three-year period at an annual premium of…

A: As per the honor code, We’ll answer the first question since the exact one wasn’t specified. Please…

Q: Hanson Construction has an operating cycle of 9 months. On December 31, 2019, Hanson hasthe…

A: Solution Current assets are the assets which can be converted in to cash with in one year.   Current…

Q: Isko Company, a calendar-year company, has a 6% note receivable dated November 1, 2020 in the…

A: The company had note receivable of P 3,000,000 on November 1, 2020 Out of which P 1,000,000 is…

Q: On June 1, Davis Inc. issued an $64,900, 7%, 120-day note payable to Garcia Company Assume that the…

A: Interest to be received is calculated by multiplying the principal with rate of interest and time .…

Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…

A: Purchase Price : $24 Million Period : 12 Months Monthly Interest Rate : 12% / 12 = 1% Annuity rate…

Q: On December 31, 2021, Roth Company issued a P1,000,000 face value note payable to Wake Company in…

A: Note payable -  A promissory note or a written agreement is what a note payable is. The creator of…

Q: Lynford Company sold 10,500 dishwashers for $1,100 each during 2021. The dishwashers are under…

A: Warranty liability is calculated by deducting the warranty cost from the warranty liability.

Q: Prepare all appropriate journal entries including the sale of merchandise.

A: Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Q: On April 15, 2021, Sampson Consulting provides services to a customer for $110,000. To pay for the…

A: Journal Entry:   Journal entry has two effects for every transaction. The journal entry is passed by…

Q: Milton Company borrowed $95,000 on January 1, 2020, by signing a 6% promissory note. The note is to…

A: The question is based on the concept of Financial Accounting.

Q: On September 1, 2021, Zara Company issued a 6-month note to supplier amounting to P300,000, 12%…

A: Adjusting entries are those journal entries which are passed at the end of accounting period for the…

Q: On july 1, Shady creek resort borrowed 290,000 cash by signing a 10 year, 10% installment note…

A: Interest expense  is the amount of interest accrued during  period

Q: On October 1, 2021, Chrysanthemum Co. purchased equipment by issuing a 9% promissory note with face…

A: Interest payable on Decemeber 31,2022  = 9% x (1500000-400000) x3/12= 24750

Q: LCD Industries purchased a supply of electronic components from Entel Corporation on November 1,…

A: Installment note:   Installment note is an obligation in which the defaulter needs to repay the…

Q: On April 1, 2021, John Vaughn purchased appliances from the Acme Appliance Company for $1,000. In…

A: Purchased Amount = $1,000 Time Period = 18 Months Annual Interest Rate = 24%

Q: On January 1, 2021, Glanville Company sold goods to Otter Corporation. Otter signed an installment…

A: Sales revenue: The amount earned by selling goods or services is known as sales revenue. This is the…

Q: Use the following information for the next two questions. Funan Industries purchases new…

A: PV of notes payable=Cash price-down payment =79000-10000=69000

Q: CD Industries purchased a supply of electronic components from Entel Corporation on November 1,…

A: A journal entry is used to document a business deal in a company's accounting records. A journal…

Contract Costing

Contract costing is about tracing particular costs related to a particular contract entered into with the customer. It is one of the forms of job order costing. It is useful in long-term contracts at the most. It is seen that substantial time is required for the completion of the contract which takes different accounting periods. Thus, it is very much helpful for recognizing the costs associated with it and accounting in their specific accounting periods.