Why would superior carpet cleaning accept credit cards

Assignment Help Accounting Basics
Reference no: EM13929665

Superior Carpet Cleaning provided $76,000 of services during 2013, its first year of operations. All customers paid for the services with major credit cards. Superior submitted the credit card receipts to the credit card company immediately. The credit card company paid Superior cash in the amount of face value less a 3 percent service charge.

Required: 

a. Record the credit card sales and the subsequent collection of accounts receivable in a horizontal statements model like the one shown here. In the Cash Flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). Use NA to indicate that an element is not affected by the event.

1529_264-B-A-C-R (1682).png

b. Answer the following questions:
(1) What is the amount of total assets at the end of the accounting period? 
(2) What is the amount of revenue reported on the income statement? 
(3) What is the amount of cash flow from operating activities reported on the statement of cash flows? 
(4) Why would Superior Carpet Cleaning accept credit cards instead of providing credit directly to its customers? In other words, why would Superior be willing to pay 3 percent of sales to have the credit card company handle its sales on account? 

Reference no: EM13929665

Questions Cloud

Foundation of computer and mobile forensics : This module introduces the foundation of computer and mobile forensics. The students will learn about different tools and techniques in forensic computing starting from collecting the evidence, preserving the evidence towards analysing the evidenc..
Financial management practices to each of changes in market : Describe one way that a financial manager of a retail company would efficiently adjust his company’s financial management practices to each of the following changes in market conditions: (a) a big competitor enters the market; (b) technological progr..
Provide three examples of scarcity : Provide three examples of scarcity that illustrate why even the 1,210 billionaires in the world face scarcity. 2. Label each entry in List 1 as dealing with a microeconomic topic or a macroeconomic topic. Explain your answer. Use the following inform..
What are the professional and legal responsibilities : What are the professional and legal responsibilities in relation to managing disabled and older workers? What are the professional and legal responsibilities when working with these populations?
Why would superior carpet cleaning accept credit cards : Why would Superior Carpet Cleaning accept credit cards instead of providing credit directly to its customers?
Discuss the challenges of var approaches in valuing risk : Discuss the challenges of VaR approaches in valuing risk. How does portfolio risk assessment differ from a single asset's risk assessment? How do managers typically load balance a portfolio?
Annual standard deviation of returns on stock : The annual standard deviation of returns on Stock A’s equity is 31% and the correlation coefficient of these returns, with those on the market index (S&P 500 index), is 0.82. Comparable numbers of Stock B are 34% and 0.64. What can you say about Stoc..
Association of employee commitment-organizational support : We conduct research about The Association of Employee Commitment, Organizational Support, Job Satisfaction on Intention to Leave of nurses in Najran, Saudi Arabia I want from you only introduction and literature review for my research the instrume..
Create the framework for accomplishing homeland security : Critique the four goals that create the framework for accomplishing homeland security. Make a suggestion that could potentially improve the framework. Justify your suggestion

Reviews

Write a Review

Accounting Basics Questions & Answers

  Deduct as a medical expense

In addition, Lonnie paid the contractor $5,000 to construct an entrance ramp to his home and $7,000 to widen the hallways to accommodate his wheelchair. Lonnie's AGI for the year was $80,000. How much of these expenditures can Lonnie deduct as a m..

  Recognition of gross profit from the sale

The first installment payment of $18,360 was received on Dec. 31. How much gross profit from this sale should Pacer recognize on the December 31 income statement?

  Outline aron''s professional obligations as a cga

Outline Aron's professional obligations as a CGA

  Outline why the account is at significant risk

Problem 1: From your business risk analysis, identify three (3) accounts to be at significant risk. For each of the accounts you identify:

  Vinson manufacturing requires all capital investment

vinson manufacturing requires all capital investment projects to have a payback period of 5 years or less. vinson is

  Compute depreciation for meca concrete

Meca Concrete purchased a mixer on January 1, 2007, at a cost of $45,000. Straight-line depreciation for 2007 and 2008 was based on an estimated 8-year life and $3,000 estimated residual value. Compute depreciation for 2009 and 2010.

  Enter a favorable variance as a negative number using a

belgian chocolate company makes dark chocolate and light chocolate. both products require cocoa and sugar. the

  Hagos corporation is working on its direct labor budget for

hagos corporation is working on its direct labor budget for the next two months. each unit of output requires 0.84

  Calculate liability that yummy rice report at december

Calculate the liability that Yummy Rice should report at December 31, 2013.

  Briefly discuss the operating performance

Briefly discuss the operating performance and financial positions of Sepracor Industry averages for these ratios in 2007 were ROA 3.5%; Return on Equity 16%; and Debt to Assets 75%. Based on this analysis, would you make an investment in the compa..

  Motoran inc is contemplating the acquisition of a

motoran inc. is contemplating the acquisition of a competitor tortoran corp. for 25 million. motoran market value is 40

  Unrelated business income tax

The local garden club, an exempt organization, had gross unrelated business income during the year of $15,000. Its costs associated with this income were $9,800. What is its unrelated business income tax?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd