Sabrina bought a new washing machine. She put $50 down and pays $50 per month for the next 10 months to be able to make the purc

In this scenario, the handler company receives a $21.85 discount (1% of the amount borrowed) for settling their payment within 15 days. Consequently, rather than sending the full sum of $2,185 to Ellen Co., they will only remit $2,163.15, which is $21.85 less than the initial amount due, taking advantage of the 1% discount.

The most suitable answer choices are manufacturing engineer, industrial ecologist, and surveying technician. These professions require a scientific and mathematical perspective for success.

Response:

Lonnie Holdiman Co.

A Schedule calculating the adjusted income prior to taxes for 2020 and 2021:

2020 2021

Income before taxes $101,000 $77,400

1. Excess Sales revenue (38,200) 38,200

2. Inventory understated as of December 31, 2020 8,640 (8,640)

3. Discount on amortized bonds not accounted for (1,776) (1,901)

4. Equipment repairs not accounted for (8,500) (9,400)

5. Overstated depreciation from capitalized equipment repairs 850 940

Corrected income before tax $62,014 $96,599

Clarification:

a) Data and Calculations:

Income before tax for 2020 = $101,000

Income before tax for 2021 = $77,400

1. Sales Revenue 2020 $38,200; 2021 Sales Revenue $38,200

2. Understated inventory for 2020 $8,640; 2021 $8,640

3. Unrecorded interest expense on bonds for 2020 $1,776

Interest expense on bonds for 2021 $1,901

4. Unrecorded equipment repairs 2020 $8,500 falsely recorded to Equipment account $8,500

Equipment repairs 2021 $9,400 misclassified to Equipment account $9,400

5. Overstated depreciation expense for 2020 $850

Overstated depreciation expense for 2021 $940.

Bond Calculations:

Outstanding bond value:

Face value of the bond = $250,000

Discount = 15,000

Bond proceeds = $235,000

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450

On December 31, 2017:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,450 ($235,000 * 7%)

Amortized discount = $1,450 ($16,450 - $15,000)

Outstanding value = $236,450 ($235,000 + 1,450)

On December 31, 2018:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,552 ($236,450 * 7%)

Amortized discount = $1,552 ($16,552 - $15,000)

Outstanding value = $238,002 ($236,450 + 1,552)

On December 31, 2019:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,660 ($238,002 * 7%)

Amortized discount = $1,660 ($16,660 - $15,000)

Outstanding value = $239,662 ($238,002 + 1,660)

On December 31, 2020:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,776 ($239,662 * 7%)

Amortized discount = $1,776 ($16,776 - $15,000)

Outstanding value = $241,438 ($239,662 + 1,776)

On December 31, 2021:

Bond interest payment = $15,000 ($250,000 * 6%)

Bond interest expense = $16,901 ($241,438 * 7%)

Amortized discount = $1,901 ($16,901 - $15,000)

Outstanding value = $243,339 ($241,438 + 1,901)

Depreciation on Capitalized Equipment Repairs:

Excess depreciation expense:

For 2020 = $850 ($8,500 * 10%)

For 2021 = $940 ($9,400 * 10%)