Bulldog Inc. recently made a $75,000 purchase from a vendor. The vendor will accept payment by check or ACH. In either case, the vendor offers net trade credit terms of 30 days. The assistant treasurer of Bulldog Inc. notes that payment by check will provide an additional 3 days of float (beyond the 30 days of trade credit), relative to payment by ACH (assume an additional one day of float beyond the trade credit period). In an effort to encourage Bulldog Inc. to pay via ACH, the vendor has offered a 0.50% discount for ACH payments. Assuming a discount rate of 5%, which disbursement approach should Bulldog Inc. use? Ignore the transactions cost associated with the check and ACH entry.
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Bulldog Inc. recently made a $75,000 purchase from a vendor. The vendor will accept payment by check or ACH. In either case, the vendor offers net trade credit terms of 30 days. The assistant treasurer of Bulldog Inc. notes that payment by check will provide an additional 3 days of float (beyond the 30 days of trade credit), relative to payment by ACH (assume an additional one day of float beyond the trade credit period). In an effort to encourage Bulldog Inc. to pay via ACH, the vendor has offered a 0.50% discount for ACH payments. Assuming a discount rate of 5%, which disbursement approach should Bulldog Inc. use? Ignore the transactions cost associated with the check and ACH entry.
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- Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $630,700 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,700. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Riverbed for the full sales price. (a)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on January 28, 2020. Assume that Riverbed Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Choose date Jan 2 or Jan 28…1. Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $630,700 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,700. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Riverbed for the full sales price. a)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on January 28, 2020. Assume that Riverbed Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) b)Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on…Riverbed Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $659,900 (cost of $460,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,900. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Riverbed for the full sales price. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Riverbed Company on January 2, 2020, and the payment on January 28, 2020. Assume that Riverbed Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit choose a transaction date…
- Springer Products wishes to borrow $90,000 from a local bank using its accounts receivable to secure the loan. The bank's policy is to accept as collateral any accounts that are normally paid within 30 days of the end of the credit period, as long as the average age of the account is not greater than the customer's average payment period. Springer's accounts receivable, their average ages, and the average payment period for each customer are shown in the following table: Customer Accounts Receivable Average age of account Average payment period of customer A $11,000 42 days 50 days B $25,000 70 days 65 days C $10,000 48 days 45 days D $28,000 55 days 50 days E $14,000 50 days 60 days F $19,000 21 days 35 days G $30,000 10 days 30 days H $16,000 25 days 40 days…Sage Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $649,600 (cost of $550,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $9,600. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Sage for the full sales price. (a) Prepare the journal entry(ies) to record the sale and related cost of goods sold for Sage Company on January 2, 2020, and the payment on January 28, 2020. Assume that Sage Company records the January 2, 2020, transaction using the net method. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Debit Credit (To record sales) (To record cost of goods sold)Jupiter Company sells goods to Danone Inc. by accepting a note receivable on January 2, 2020. The goods have a sales price of $610,000 (cost of $500,000). The terms are net 30. If Danone pays within 5 days, however, it receives a cash discount of $10,000. Past history indicates that the cash discount will be taken. On January 28, 2020, Danone makes payment to Jupiter for the full sales price. Instructions a. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Jupiter Company on January 2, 2020, and the payment on January 28, 2020. Assume that Jupiter Company records the January 2, 2020, transaction using the net method. b. Prepare the journal entry(ies) to record the sale and related cost of goods sold for Jupiter Company on January 2, 2020, and the payment on January 28, 2020. Assume that Jupiter Company records the January 2, 2020, transaction using the gross method.
- YVONE Trading requests credit terms from its trade supplier, Mestle Corporation. YVONE operates 360 days a year. The trade supplier offers two credit terms to YVONE as follows: Credit term number 1: 2/15, net 30 Credit term number 2: 1/10, net 90 Required: 1. Compute the nominal cost of forgoing the cash discount of the two credit terms. 2. Compute the effective cost of credit of the two terms. 3. If the prevailing bank interest rate is 15% of the nominal rate, which credit term should be bypassed to use the money as the source of financing? Discuss your answer briefly. (with solution)Concord Corp. follows IFRS and sells its products in expensive, reusable containers that can be tracked. The customer is charged a deposit for each container that is delivered and receives a refund for each container that is returned within two years after the year of delivery. When a container is not returned within the time limit, Concord accounts for the container as being sold at the deposit amount and credits the account Container Sales Revenue. Information for 2023 is as follows: Containers held by customers at December 31, 2022, from deliveries in: Containers delivered in 2023 Containers returned in 2023 from deliveries in: Liability for Reusable Containers $ eTextbook and Media List of Accounts 2021 2022 There would be 2021 $118,000 2022 291,300 315,000 $177,200 418,700 2023 Calculate the total amount that Riverbed should report as a liability for returnable deposits at December 31, 2023. Had Riverbed followed ASPE, would any of your answers in above parts be different?…BayFish Company currently uses maximum trade credit by not taking discounts on its purchases. Company is planning to borrow from its bank, using notes payable, in order to take trade discounts. The firm wants to determine the effect of this policy change on its net income. The standard industry credit terms offered by all its suppliers are 2/15, net 40 days, and BayFish pays in 40 days. Its net purchases are $10,000 per day, using a 365-day year. The interest rate on the notes payable is 8% percent and the firm’s tax rate is 40 percent. If the firm implements the plan, what is the expected change in BayFish’s net income? (Hint: Use Incremental approach table)
- During 2018, LeBron Corporation accepts the following notes receivable. a. On April 1, LeBron provides services to a customer on account. The customer signs a four-month, 9% note for $5,000. b. On June 1, LeBron lends cash to one of the company's vendors by accepting a six-month, 10% note for $9,000. c. On November 1, LeBron accepts payment for prior services by having a customer with a past-due account receivable sign a three- month, 8% note for $4,000. Required: Record the acceptance of each of the notes receivable. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheetIs there any way you can help me do this problem? I'm getting my debit and credit wrong. "On March 1, 2021, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner delivers the products to Brink’s, a third-party carrier. In addition, Gold Examiner has agreed to provide a replacement shipment at no additional cost if the product is lost in transit. The stand-alone price of a gold bar is $1,440 per unit, and Gold Examiner estimates the stand-alone price of the replacement insurance service to be $60 per unit. Brink’s picked up the gold bars from Gold Examiner on March 30, and delivery to the bank occurred on April 1. On March 1, 2021, Gold Examiner receives $147,000 from a local bank and promises to deliver 100 units of certified 1-oz. gold bars on a future date. The contract states that ownership passes to the bank when Gold Examiner…Retailers that accept credit cards pay a “swipe fee” to credit-card issuers such as Visa and Mastercard ranging from 1 to 3 percent of the purchase. The credit-card companies prohibited retailers from passing that fee on to consumers, but a recent lawsuit settlement proposal lifted that restriction. Under the settlement, retailers can charge 2.5 to 3 percent on each transaction. Discuss this issue and develop a report on the pros and cons of retailers adding a surcharge to credit purchases. (AACSB: Written and Oral Communication; Reflective Thinking)