Question: Jeffreys Billiards sold a pool table to C. Cobbs on October 31, 2009. The terms of the sale are no money down and payments of

Jeffrey’s Billiards sold a pool table to C. Cobbs on October 31, 2009. The terms of the sale are no money down and payments of $50 per month for 30 months, with the first payment due on November 30, 2009. The table they sold to Cobbs cost Jeffrey’s $800. Jeffrey’s uses an interest rate of 12 percent compounded monthly (1 percent per month).

Required:

1. Prepare the cash flow diagram for this sale.

2. Calculate the amount of revenue Jeffrey’s should record on October 31, 2009.

3. Prepare the entry to record the sale on October 31. Assume that Jeffrey’s records cost of goods sold at the time of the sale (perpetual inventory accounting).

4. Determine how much interest revenue Jeffrey’s will record from October 31, 2009, through December 31, 2009.

5. Determine how much Jeffrey’s 2009 income before taxes increased by this sale.

Step by Step Solution

★★★★★

3.37 Rating (178 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

1 2 Tables Present Value of Annuity 50 PV of an Annuity 30 Periods 1 50 258077... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

145-B-A-T-V-M (757).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Assume mortgage payments of $1000 per month for 30 years and an interest rate of 1/2% per month. What initial principal or PW will this repay?

Baileys Billiards sold a pool table to Sheri Sipka on October 31, 2012. The terms of the sale are no money down and payments of $ 50 per month for 30 months, with the first payment due on November...

INSTALLMENT SALE Jeffreys Billiards sold a pool table to C. Cobbs on October 31, 2009. The terms of the sale are no money down and payments of $50 per month for 30 months, with the first payment due...

INSTALLMENT SALE. Jeffrey's Billiards sold a pool table to C. Cobbs on October 31, 19x2. The terms of the sale are no money down and payments of $50 per month for 30 months, with the first payment...

Bailey's Billiards sold a pool table to Sheri Sipka on October 31, 2020. The terms of the sale are no money down and payments of $50 per month for 30 months, with the first payment due on November...

I need the following homework exercise completed. All of the information is within the attached files. I require no explanations, just the answers. Part 1: Finding information: Each of the following...

Part 1: Finding information: Each of the following questions should be answered within the table provided in file entitled "PART 1 TABLE." American Eagle's 2009 10-K is in the file entitled...

Download Toro's annual report from the activities folder and try questions 1-2. What is the balance-sheet based accrual ratio of Toro for the year of 2011? Note that total debts should include debts,...

The random variable x takes on the values 1, 2, and 3 with probabilities (1 + 3k) / 3, (1 + 2k) / 3, and (0.5 + 5k) / 3, respectively. a) Find the appropriate value of k b) Find the mean variance of...

(a) Why does eluent strength increase as solvent becomes less polar in reversed-phase chromatography, whereas eluent strength increases as solvent becomes more polar in normal-phase chromatography?...

In accounting he sold $1,400 worth of baked goods this week The ingredients cost $500 advertising was 100 what are the cost of goods sold expense in his financial statement

In order to construct, operate, and maintain a floodwater retarding structure, the Lincoln County Conservation District purchased a written easement from Eddie Fowler and others. The easement...

What kinds of errors will a trial balance detect? What kinds of errors will not be detectable by a trial balance?

Discuss the trade-offs that may be necessary between the qualitative characteristics.

Distinguish between comparability and consistency.

Discuss the reasons and situations in which researchers would want to use linear regression. How would a researcher know whether linear regression would be the appropriate statistical technique to...

Sean Ay B dos sucesos tales que: \f\fAVB)\f\f\f

Time Series Analysis is a set of advanced statistical techniques used for data gathered on a specific characteristic over a period of time . Time series data are used in business to examine patterns,...