Answers
Answer 1(a):
Date of borrowing = January 6, 2016
Maturity date = October 1, 2016.
Duration of short term loan = Maturity date - Date of borrowing = 272 days.
Interest on short term loan = 685000 * 6.86% * 272/365 = $35017.95
Total amount HNL paid on maturity = Principal + Maturity = 685000 + 35017.95 = $720,017.95
Total amount HNL paid on maturity = $720,017.95
Answer 1(b):
Calculate the number of days the short term loan is outstanding. Calculate interest payable based on interest rate agreed, principal amount and number of days the loan is outstanding. Calculate total amount payable by adding interest payable to loan amount.
Answer 2(a):
Given:
Beginning inventory = $95,000
Net Purchases = $118,900
Net sales = $210,800
Gross profit = 45% of net sales
Hence:
Estimated Cost of goods sold = Net sales - Gross profit = 210800 - 210800 * 45% = $115,940
Cost of goods available for sales = Beginning inventory + Net purchases = 95000 + 118900 = $213,900
Estimated Ending inventory = Cost of Goods available for sale - Cost of goods sold
= 213900 - 115940
= $97,960
Estimated Ending inventory = $97,960
Answer 2(b):
Calculate cost of goods available for sale by adding beginning inventory and net purchases. We need cost of goods sold to estimate ending inventory. Calculate cost of goods sold by calculating and deducting gross profit from net sales.
Calculate estimated ending inventory by subtracting cost of goods sold from cost of goods available for sale.
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