On April 18, 2019, Bontanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30, from Whitetail Seed Co. Even though the discount period had expired, Shelby Davey subtracted the discount of $196 when he processed the documents for payment on May 1, 2019.Discuss whether Shelby Davey behaved in a professional manner by subtracting the discount even though the discount period had expired.
Q: Kappa Inc. reported accounts payable on December 31, 2019 at P 2,200,000 before any necessary…
A: calculation of accounts payable are as follows
Q: On March 1, 2019, a suit was filed against Eloise Company for patent infringement. Eloise's legal…
A: A Provision is nothing but a liability of uncertain amount with uncertain timing. A liability is a…
Q: On December 4, 2019 Charie purchased office equipment for 400,000 , terms 2/10,n/15 , inclusive of a…
A: As per Indian Accounting Standard 16 , Property , Plant & Equipment, Initially Property , Plant…
Q: Sandhill Corp. sells idle machinery to Hollis Company on July 1, 2020, for $33,000. Sandhill agrees…
A: Liabilities are the amount of dues or obligations that need to be settled in a definite period.…
Q: On November 5,2019, ABC Corporation’s truck was in an accident with an auto driven by Mikey. ABC…
A: Let's understand some basics The general concept of accrual accounting is that economic events are…
Q: On December 1, 2020, Hidilyn Inc. delivered 10 boxes of Otap bread and 10 packs of sample bread, for…
A: Here discuss about the details of the consignment sales and its remittance to the consignor related…
Q: PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members…
A: In the case of accounting for a customer loyalty programme, a portion of sales from the total sales…
Q: Marigold Cosmetics Co. purchased machinery on December 31, 2019, paying $53,800 down and agreeing to…
A: Given information, Marigold purchased Machinery on Dec. 31, 2019 Down Payment = $ 53,800 Balance…
Q: On May 1, 2020, Marin Inc. entered into a contract to deliver one of its specialty mowers to…
A: DATE PARTICULARS DEBIT CREDIT a) May 1, 2020 No entry is required as a contract was…
Q: Discuss whether Shelby Davey behaved in a professional manner by subtracting the discount even…
A: Discount period is the time in which creditors are allowed to make payments along with some…
Q: On 04 February 2019, the judge presiding over the case ruled that Fresh should pay $ 1 000 000 to…
A: A rival toothpaste maker has filed a fraud lawsuit against Fresh Limited. Prior to the conclusion…
Q: Johnson Co. accepts a note receivable from a customer in exchange for some damaged inventory. The…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: On January 1, 2019, Tabor Company sold land with a book value of $50,000 to Wilson Company,…
A: Part 1: Present value is calculated for the firm as: Present value=$60,000×0.797(PVT)=$47,820 Tabor…
Q: The possible outcomes are equally likely. The accounting year ends on December 31 and the 2020…
A: Personal injury lawsuit: In the case of personal injury there is a legal dispute that arises when…
Q: Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a…
A: a. Wesley's gain = $139,520, but due to section 121 exclusion, he doesn't need to recognize any gain…
Q: PEANUTS Company, a grocery retailer operates a customer loyalty program. It grants program members…
A: Company generally provides loyalty program to its customers in which it grants loyalty points to its…
Q: recognize revenue
A: Revenue Recognition :- revenue is considered to have been realised when a transaction has been…
Q: On December 1, 2020, Shamrock Inc. delivered 10 boxes of Otap bread and 10 packs of sample bread,…
A: COGS refer to the direct cost of producing the goods sold by the company. It includes cost of…
Q: During 2020, ABC Company sold appliances that offer product warranties against defects. Based on the…
A: Warranty is a form of assurance which is being provided by the seller to the buyer that in case…
Q: Skysong Cosmetics Co. purchased machinery on December 31, 2019, paying $52,900 down and agreeing to…
A: carrying value: Carrying value=$56,000*3.16987(PVIFA of 10% for 4 years)…
Q: On January 1, 2019, Somerville Corporation sold a used truck to Cornelius Company and accepted a…
A: Solution: Introduction: A bond/Note is an instrument of financial indebtedness of a bond issuer…
Q: Blossom Stamp Company records stamp service revenue and provides for the cost of redemptions in the…
A: Liability: When a person or corporation incurs a responsibility, it is often in the form of a…
Q: In 2019, five people died in a car accident, possibly due to the products sold by SH Limited. Legal…
A: Provisions: A provision is an obligation, but it varies from other liabilities like creditors and…
Q: GoodBuy sells gift cards redeemable for GoodBuy products either in store or online. During 2021,…
A: Revenue: Revenue refers to the income received from the business activity or sale of the output,…
Q: During 2019, Boge Corporation signed a noncancelable contract to purchase 10,000 bushels of soybeans…
A: Every business should be documented in at least two locations, according to the logic of a journal…
Q: Brady is hired in 2021 to be the accountant for Anderson Manufacturing, a private company. At the…
A: Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to…
Q: On April 18, 2019, Botanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30,…
A: Credit terms are the terms of payment offered by the seller to the buyer. 2/10, n/30 refers to the…
Q: On July 1, 2019, Hart signed an agreement to operate as a franchisee of Ace Printers for an initial…
A: On July 1, 2019, Hart signed an agreement to operate as a franchisee of Ace Printers for an initial…
Q: Beautiful Company is involved in litigation regarding a faulty product sold in a prior year during…
A: Contingent Liability. Contingent liabilities are those, the occurance of which depend on the happing…
Q: Marin Cosmetics Co. purchased machinery on December 31, 2019, paying $47,300 down and agreeing to…
A: Excel formula : PV(rate,nper,pmyt,fv) = PV(8%,4,46400,0) Amortization schedule Period Decrease…
Q: Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a…
A: A recognized gain refers to the amount raised from the sale of investment or assets used in business…
Q: EM Company, a grocery retailer, operates a customer loyalty program. The entity grants program…
A: Loyalty points Revenue Recognition - Under the same amount allocated from the loyalty rewards is…
Q: On April 18, 2016, Bontanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30,…
A: purchase was made on on April 18 2016 payment should be made in 30 days discount of 2% allowed if…
Q: On November 5, 2019, a Muntinlupa Company truck was in an accident with an auto driven by Murcia.…
A: Provision refers to funds that are set aside by the business with a view to cover uncertain future…
Q: On July 1, 2019, HOSPITAL CORP. signed an agreement to operate as a franchise of PLAYLIST CO. for an…
A: Franchise, in case of deferred payment, shall be recognised at the cash price after removing the…
Q: On February 15, 2022, CHAS received notice that a client may sue company for $10 million. The…
A: A contingent liability seems to be a possible responsibility that might or might not materialize…
Q: On February 15, 2022, CHAS received notice that a client is suing it for $10 million. The lawsuit is…
A: A contingent liability seems to be an obligation that may occur as a result of the occurrence of a…
Q: Straight Industries purchased a large piece of equipment from Curvy Company on January 1, 2019.…
A: Interest accrued for 2019 = Present value of note x rate of interest x no. of years = $252715 x 10%…
Q: I asked this question just now and received the incorrect answer. Trying again... . On…
A:
Q: On January 1, 2021, Wright Transport sold four school buses to the Elmira School District. In…
A: Wright received a note payment = $ 515000 Effective interest rate = 8% From January 01, 2021 to…
Q: During 2018, Rosanna Company was sued by a competitor for P5,000,000 for infringement of a patent.…
A: Provision should be adjusted related to adjustable event.
Q: Carla Vista Company purchased equipment on account on September 3, 2019, at an invoice price of…
A: Calculate the cost of equipment.
Q: Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2021, to Bassadrome.…
A: Bill and hold sales recognize revenue: Customer use to purchase goods and requests the seller to…
Q: On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10,…
A: Solution In the given case ,C company has a chance to get 2 % discount if payment made with in 10…
Q: Pearl Commodities Company signed a long-term noncancelable purchase commitment with a major…
A: Working:- Estimated liability on purchase commitment = $637,000 - $573,300…
Q: Byrd Company had the following transactions during 2019 and 2020: 1. Prepare the…
A: A journal entry is used to record a commercial transaction in the accounting records of a…
Q: Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2018, to Bassadrome.…
A: Bill and hold sales recognize revenue: The customer used to purchase goods and request the seller…
Q: During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On October 1,…
A: Introduction:- During 2019, Maricar Company guaranteed a supplier’s P5,000,000 loan from a bank. On…
Q: Do you want to make a double entry? On November 7, 2021, a fire broke out at the store, destroying…
A: There are three golden rules in accounting for recording the transaction : Debit what comes in ,…
Q: Presented below are three independent situations. 1. Novak Stamp Company records stamp service…
A: A liability is an obligation that is required to be fulfilled by the business in the future.
On April 18, 2019, Bontanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30, from Whitetail Seed Co. Even though the discount period had expired, Shelby Davey subtracted the discount of $196 when he processed the documents for payment on May 1, 2019.
Discuss whether Shelby Davey behaved in a professional manner by subtracting the discount even though the discount period had expired.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Rix Company sells home appliances and provides installation and service for its customers. On April 1, 2019, a customer purchased a dishwasher that Rix normally sells for 1,000. In addition, the customer purchased the installation service and a 3-year service contract, with stand-alone selling prices of 200 and 400, respectively. Because the customer purchased all three items as a bundle, Rix charged the customer 1,400. Required: 1. How should the transaction price be allocated among the products? 2. Prepare the journal entries to recognize revenue related to each product in 2019.Spath Company borrows 75,000 by issuing a 4-year, noninterest-bearing note to a customer on January 1, 2019. In addition, Spath agrees to sell inventory to the customer at reduced prices over a 5-year period. Spaths incremental borrowing rate is 12%. The customer agrees to purchase an equal amount of inventory each year over the 5-year period so that a straight-line method of revenue recognition is appropriate. Required: Prepare the journal entries on Spaths books for 2019 and 2020. (Round answers to 2 decimal places.)Contingencies Fallon Company, a toy manufacturer that also operates several retail outlets, is preparing its December 31, 2019, financial statements. It has identified the following legal situations that may qualify as contingencies: A customer is suing the company for 800,000 in damages because her child was injured in November 2019 while riding an escalator that stopped suddenly in one of its stores. The child was hurt when he tripped and fell while walking down an escalator that was going up. Legal counsel feels that the child is partially at fault, but that it is probable that the lawsuit will be settled for between SO,000 and 100,000, with 80,000 being the most likely amount. Fallon has discovered that a skateboard it began manufacturing and selling in 2019 has defective bearings, sometimes causing a wheel to fall off. Fallon has issued a recall notice in newspapers and magazines in which it offers to replace the bearings. It estimates a cost of 200,000 for these repairs. No lawsuits have been filed for injury claims, although the company feels that there is a reasonable possibility that claims may total as high as 2 million. Fallon has an incinerator behind one of its retail outlets which is used to burn cardboard boxes received in shipments of inventory from suppliers. The state environmental protection agency filed suit against the company in August 2019 for air pollution. Fallon expects to stop using the incinerator and begin recycling. However, its lawyers believe that it is probable that a fine of between 40,000 and 60,000 will be levied against the company, although they cannot predict the exact amount. In early 2019, Fallon signed a contract with a computer vendor to install state of the art cash registers in all of its retail outlets. Because of the vendors inability to acquire sufficient cash registers, the vendor canceled the contract. Fallon has filed a breach of contract suit against the vendor, claiming 300,000 in damages. The companys lawyers expect that it will settle the suit out of court for 150,000. Required: Next Level For each situation, prepare the journal entry (if any) on December 31, 2019, to record the information for Fallon, and explain your reasoning. If no journal entry is recorded, explain how the information would be disclosed in Fallons 2019 annual report. How would your answers change if Fallon used IFRS?
- At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a tenant during 2020. The company erroneously recorded the transaction by debiting Cash and crediting Rent Revenue in 2019 instead of 2020. Upon discovery of this error in 2020, what correcting journal entry will Framber make? Ignore income taxes.The balance in Ashwood Companys accounts payable account at December 31, 2019, was 1,200,000 before any necessary year-end adjustment relating to the following: Goods were in transit from a vendor to Ashwood on December 31, 2019. The invoice cost was 85,000, and the goods were shipped FOB shipping point on December 29, 2019. The goods were received on January 2, 2020. Goods shipped FOB shipping point on December 20, 2019, from a vendor to Ashwood were lost in transit. The invoice cost was 40,000. On January 5, 2020, Ashwood filed a 40,000 claim against the common carrier. Goods shipped FOB destination on December 22, 2019, from a vendor to Ashwood were received on January 6, 2020. The invoice cost was 20,000, What amount should Ashwood report as accounts payable on its December 31,2019, balance sheet? a. 1,260,000 b. 1,285,000 c. 1,325,000 d. 1,345,000On April 18, 2019, Botanica Company, a garden retailer, purchased $9,800 of seed, terms 2/10, n/30, from Whitetail Seed Co. Even though the discount period had expired, Shelby Davey subtracted the discount of $196 when he processed the documents for payment on May 1, 2019. Discuss whether Shelby Davey behaved in a professional manner by subtracting the discount even though the discount period had expired.
- On December 1, 2021 Cardinal Company, a garden retailer, purchased $20,000 of corn seed, terms 2/10, n/30, from IowaFarm Co. Even though the discount period had expired, Rosa Lopez subtracted the discount of $400 when she processedthe documents for payment on December 15, 2021. Discuss whether Rosa Lopez behaved in a professional manner by subtracting the discount, even though the discount period had expired.Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2% discount if paid within 30 days, 1% discount if paid after 30 days, or payabl e in full within ninetydays if not paid within the discount periods. However, the customer had the right to return this machine to Yellow Company if it was unable to resell the machine before the expiration of the ninety-day payment period, in which case the customer’s obligation to Yellow Company would be canceled. In the net sales for the year ended december 31,2020, what amount should be included for the sale of the machine? a. 750,000 b. 735,000 c. 742,500 d. 0On February 12, 2020, Guy Sebastian Gardening Services enters into a contract with a local business to provide a weekly grass cutting services between May 1 and September 30 of that year, and received P2,000 in advance. As part of a local business promotion, Guy Sebastian offers a 50% discount on any gardening tools it also sells with a list price in excess of P200. In the past, Guy Sebastian charged the same amount (P2,000) for the same weekly grass cutting service, but without the gardening tool discount coupon. Based on historical experience with other clients, Guy estimates that about 40% of the coupons will be redeemed, purchasing tools with an average total list price of P400. Guy prepares its annual financial statement every June He has performed the needed grass cutting services needed for the current fiscal year. How much revenue (rounded to the nearest peso) should Guy Sebastian recognize in its June 30, 2020 income statement arising from the above contract?
- On December 1, 2020, Shamrock Inc. delivered 10 boxes of Otap bread and 10 packs of sample bread, for tasting-purposes, to 24/7 retail store on a consignment arrangement. The retail store does not take title to the products and has no obligation to pay Shamrock Inc. until they are sold to the final costumers. Any unsold products, excluding those that are lost or damages, can be returned to Shamrock Inc. and the latter has discretion to call products back or transfer products to another customer. Shamrock manufacturers the product at a cost of ₱5,000 per box of Otap bread and ₱100 per pack of sample bread. There is freight collect of ₱2,000 for the delivery of 10 boxes of Otap bred to 24/7 but not for the sample bread. The selling price of the Otap product is ₱8,000 per box for cash sales and ₱10,000 per box for credit sales with term of 2/10 n/30. The retail store is entitled to a 5% commission on cash sales and 10% commission on net credit sales already collected. The retail store has…Dowell Fishing Supply, Inc., sold $50,000 of Dowell Rods on December 15, 2018, to Bassadrome. Because ofa shipping backlog, Dowell held the inventory in Dowell’s warehouse until January 12, 2019 (having assuredBassadrome that it would deliver sooner if necessary). How much revenue should Dowell recognize in 2018 forthe sale to Bassadrome?On January 1, 2018, Wright Transport sold four school buses to the Elmira School District. In exchange for thebuses, Wright received a note requiring payment of $515,000 by Elmira on December 31, 2020. The effectiveinterest rate is 8%.Required:1. How much sales revenue would Wright recognize on January 1, 2018, for this transaction?2. Prepare journal entries to record the sale of merchandise on January 1, 2018 (omit any entry that might berequired for the cost of the goods sold), the December 31, 2018, interest accrual, the December 31, 2019,interest accrual, and receipt of payment of the note on December 31, 2020.