Cost of giving up early payment discounts Determine the cost of giving up the dis-count under each of the following terms of sale. (Note: Assume a 365-day year.) 4/10 net 180?
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P16–2 Cost of giving up early payment discounts Determine the cost of giving up the dis-count under each of the following terms of sale. (Note: Assume a 365-day year.)
4/10 net 180?
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- P16–2 COST OF GIVING UP THE EARLY PAYMENT DISCOUNTS Determine the cost of giving up the early payment discount under each of the following terms of sale. (Note: Assume a 365-day year.) 2/10 net 30. 1/10 net 30. 1/10 net 45. 3/10 net 90. 1/10 net 60. 3/10 net 30. 4/10 net 180.2. A credit sale of P750 is made on June 13, term 2/10, net/30. A return of P50 is granted on June 16. The amount received as payment in full on June 23 is: a. P700 b. P650 c. P686 d. P685The expression “2/10, net 45” means that the customers receive a 2% discount if they pay within 10 days; otherwise, they must pay in full within 45 days. What would the seller's cost of capital have to be in order for the discount to be cost justified? 24.8571% 19.8571% 20.8571% 23.8571%
- Cost of giving up early payment discounts Determine the cost of giving up the dis-count under each of the following terms of sale. (Note: Assume a 365-day year.) c. 1/10 net 45.BUS 038 : Business Computatns12. For terms of 6/10, n/30, what annual rate do you pay the supplier if you fail to pay the invoice at the end of the discount period?2A. Catz Corp. sells its goods with terms of 3/10 EOM, net 45. What is the implicit cost of the trade credit? (Do not round itermediate calculations. Use 365 days for calculation. Round answer to 2 decimal places, e.g. 12.25%.) The implicit cost of the trade credit is _________ %.
- P15–6 Early payment discount decisions Prairie Manufacturing has four possible suppliers, all of which offer different credit terms. Except for the differences in credit terms, their products and services are virtually identical. The credit terms offered by these suppliers are shown in the following table. (Note: Assume a 365-day year.) Supplier Credit terms J 1/5 net 30 EOM K 2/20 net 80 EOM L 1/15 net 60 EOM M 3/10 net 90 EOM Calculate the approximate cost of giving up the early payment discount from each supplier. If the firm needs short-term funds, which are currently available from its commercial bank at 9%, and if each of the suppliers is viewed separately, which, if any, of the suppliers’ early payment discounts should the firm give up? Explain why. Now assume that the firm could stretch by 30 days its accounts payable (net period only) from supplier M. What impact, if any, would that have on your answer in part brelative to this supplier?E13.9 (LO1) (Adjusting Entry for Sales Tax and VAT) Eastwood Ranchers sells a herd ofcattle to Rozo Meat Packers for €30,000 and the related VAT. Rozo Meat Packers sells thebeef to Wrangler Supermarkets for €40,000 and the related VAT. Wrangler Supermarkets sellsthis beef to customers for €50,000 plus related VAT.Instructionsa. Assuming the VAT is 15% on all sales, prepare the journal entry to record the sale byRozo Meat Packers to Wrangler Supermarkets.b. What is the net cash outlay that Eastwood Ranchers incurs related to the VAT?LO.2 Oak Corporation has the following general business credit carryovers. If the general business credit generated by activities during 2019 equals 36,000 and the total credit allowed during the current year is 60,000 (based on tax liability), what amounts of the current general business credit and carryovers are utilized against the 2019 income tax liability? What is the amount of unused credit carried forward to 2020?
- 16. Umasa Company reported rental revenue of P2,210,000 in the cash basis income tax return for the year ended November 30, 2020. Rent receivable – Nov. 30, 2020 is P1,060,000; Rent receivable – Nov. 30, 2019 is P800,000; and Uncollectible rent written off during the fiscal year is P30,000. Under accrual basis, what amount should be reported as rent revenue? a. P1,920,000 b. P2,240,000 c. P2,500,000 d. P1,980,00016. On 1 January 2022, Marina Tower exchanged equipment for an $800,000 zero-interest-bearing note due on January 1, 2023. The prevailing rate of interest for a note of this type at January 1, 2020 was 10%. The present value of $1 at 10% for three periods is 0.75. What amount of interest revenue should be included in Marina's 2023 income statement?Question 16Answera.$60,000b.$66,000c.$0d.$80,000. please answer do not image format27. Williams Inc owes $45,000 to Smith & Sons for inventory acquired with terms of 3/15 net 30. How much will Williams pay if payment is made within the discount period? What transaction will Williams record on November 30, the company’s fiscal year end, if the invoice is dated November 28 and payment will be made on December 12?