Chapter 10 Discussion Sales tax: Remember that the customer is charged the sales tax and the company is responsible for sending the sales tax dollars to the appropriate government entity. The company has sales of $3,500 in cash and $4,400 on account. The sales tax rate is 6%. Make the journal entry to record the sales and sales tax Installment notes: Remember that the monthly payment stays the same, but the amount of that payment that is interest continues to go down and the payment of the principal continues to go up. Assume that on January 1, the company borrows $50,000 from Chase Bank for 4 years at 5% interest. The installment payment is $1,200 every month. Calculate the interest amount and principal amount for the first and second months

Chapter 10 Discussion Sales tax: Remember that the customer is charged the sales tax and the company is responsible for sending the sales tax dollars to the appropriate government entity. The company has sales of $3,500 in cash and $4,400 on account. The sales tax rate is 6%. Make the journal entry to record the sales and sales tax Installment notes: Remember that the monthly payment stays the same, but the amount of that payment that is interest continues to go down and the payment of the principal continues to go up. Assume that on January 1, the company borrows $50,000 from Chase Bank for 4 years at 5% interest. The installment payment is $1,200 every month. Calculate the interest amount and principal amount for the first and second months

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter10: Accounting For Sales And Cash Receipts

Section: Chapter Questions

Problem 1CP

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Excise and Sales Tax Calculations Barnes Company has just billed a customer for $1,144, an amount that includes a 10% excise tax and a 6% state sales tax. a. What amount of revenue is recorded? b. Prepare a general journal entry to record the transaction on the books of Barnes Company. Round all answers to the nearest dollar. a. Amount of recorded revenue $ 0 b. Date Dec.31 Excise Tax Payable Sales Tax Payable General Journal Description 수 $ + To record sale on account subject to excise tax and sales tax. Debit 0 $ 0 0 0 Credit 0 0 0 0
Yesterday, Smiley Company sold $22,500 of merchandise on credit. The invoice was sent today with the terms, 3/10 net 40. This customer normally pays on the net date. What is the effective rate of interest the customer is paying by not taking the discount? Assume a 365-day year.
Company X sells on a 2/10, net 90, basis. Company Y buys goods with an invoice of $1,500. a. How much can company Y deduct from the bill if it pays on day 10? Note: Do not round intermediate calculations. b. How many extra days of credit can company Y receive if it passes up the cash discount? c. What is the effective annual rate of interest if Y pays on the due date rather than day 10? Note: Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. a. Discount b. Number of days c. Effective annual rate $ 75 80 days %
The credit terms offered to a customer by a business firm are 2/10, n/30, which means that the customer must pay the bill within 10 days. the customer can deduct a 2% discount if the bill is paid within 10 days of the invoice date. the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day from the invoice date. two sales returns can be made within 10 days of the invoice date and no returns thereafter.
10. Alexis Company has total credit sales proceeds of $4,515 in the check-out till. If the proceeds include sale tax of 8%, show the journal to record the sale.
PLEASE SHOW ALL WORK 6. You receive an invoice for $18,300 with terms of 5/15, n/60. If the supplier has a policy of allowing a cash discount for partial payments and you pay $11,500 within the discount period, calculate the amount of credit you will receive for this payment.Amount credited = Amount paidComplement of cash discount rate = $11,500 7. For terms of 8/10, n/60 determine the annual rate you, in effect, pay the supplier if you fail to pay the invoice at the end of the discount period. Express the rate with 2 decimal places. 8. An invoice for $75.20 has terms of 3/10, 1/30, n/60. If you make payment 25 days after the invoice date, what amount should you pay? 9. You purchase goods on an invoice dated July 5 with terms of 4/15, n/45 ROG. If you receive the goods on July 23, calculate(a) the last day of the discount period, and (b) the last day of the credit period.b. Last day of credit period:
Need help with C only Company X sells on a 1/15, net 60, basis. Company Y buys goods with an invoice of $1,500. a. How much can company Y deduct from the bill if it pays on day 15? (Do not round intermediate calculations.) $15 b. How many extra days of credit can company Y receive if it passes up the cash discount? 45 days c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) ???
13) A customer with unpaid balance for merchandise of $210.00 from the previous month has been paying $75.00 a month. Bank credit terms are 1% interest per month on all unpaid balances and a minium interest charge of 50 cents. If the customer makes no new purchases and maintains the montly payment of $75 a month, calculate the total amount of finance charge that he will pay. Finance charge: ?
American Express and other credit card issuers must by law print the Annual Percentage Rate (APR) on their monthly statements. If the APR is stated to be 22.00%, with interest paid monthly, what is the card's EFF%? Select the correct answer. a. 21.96% b. 24.36% c. 23.16% d. 25.56% e. 26.76%
What are the accounting entries required to record sales on credit of $10,000, on which sales tax is applied at the rate of 20%?
Now look at an example on the Payee’s books: Nov 1: We sell our product on account $1000 terms net 30 days: Accounts Receivable 1000 Sales 1000 Dec 1: The customer is unable to pay so we request a promissory note since it is a stronger legal claim and we can earn interest. Suppose the note is a 6%, 90- day note. We are receiving a note on account. This means we are replacing the accounts receivable with a note receivable. Notes Receivable 1000 Accounts Receivable 1000 received a note on account Dec 31: Adjusting Entry. We must recognize the 30 days of interest since December 1. Simple interest is calculated Principal x Rate x Time = 1000 x .06 x 90/360 = $15. That is the interest for 90 days. Since we only want 30 days 30/90 x 15 = 5 Interest Receivable 5 Interest Revenue 5 Dec 31: Closing entry. Interest Revenue 5 Debit Income Summary 5 Credit The due date of the note is 90 days from December 1. We do not count December1 and we are assuming we are not going into a leap year.…
For questions 24-25, use the following information; Posner Co. is a retail store operating in a state with a 7% retail sales tax. Posner made credit sales of $750,000 which are subject to 7% sales tax, 24. Total receivables were recorded for how much? 750,o00 25. Sales Tax Payable is recorded for how much? 49. o65 For questions 26 & 27, use the following information: ABD Company pays a weekly payroll of $285,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of $23,670, and 401(k) withholdings of $27,000. (Although not required, preparing journal entries may help you answer questions 26 & 27) 26. What is the effect of assets from the transaction(s)? • TWO ANSWERS REQUIRED - (Increase of decrease and $ how much) 27. What is the effect of liabilities from the transaction(s)? TWO ANSWERS REQUIRED - (Increase or decrease and $ how much)