On october 2, 2017, laplante company sold $6,000 of its elite camping gear (with a cost of $3,600) to lynch outfitters. as part of the sales agreement, laplante includes a provision that if lynch is dissatis- fied with the product, laplante will grant an allowance on the sales price or agree to take the product back (although returns are rare, given the long-term relationship between laplante and lynch). lynch expects total allowances to lynch to be $800. on october 16, 2017, laplante grants an allowance of $400 to lynch because the color for some of the items delivered was a bit dif- ferent than what appeared in the catalog.

instructions
(a) prepare journal entries for laplante to record (1) the sale on october 2, 2017, (2) the granting of the allowance on october 16, 2017, and, (c) any adjusting required on october 31, 2017 (when laplante prepares financial statements). laplante now estimates additional allowances of $250 will be granted to lynch in the future.

(b) indicate the income statement and balance sheet reporting by laplante at october 31, 2017, of the information related
to the lynch transaction.

In its first year of operations, crane company recognized $31,700 in service revenue, $7,700 of which was on account and still outstanding at year-end. the remaining $24,000 was received in cash from customers. the company incurred operating expenses of $16,600. of these expenses, $12,690 were paid in cash; $3,910 was still owed on account at year-end. in addition, crane prepaid $3,260 for insurance coverage that would not be used until the second year of operations.

Afirm's before-tax cost of debt, rd, is the interest rate that the firm must pay on debt. because interest is tax deductible, the relevant cost of debt used to calculate a firm's wacc is the cost of debt, rd (1 – t). the cost of debt is used in calculating the wacc because we are interested in maximizing the value of the firm's stock, and the stock price depends on cash flows. it is important to emphasize that the cost of debt is the interest rate on debt, not debt because our primary concern with the cost of capital is its use in capital budgeting decisions. the rate at which the firm has borrowed in the past is because we need to know the cost of capital. for these reasons, the on outstanding debt (which reflects current market conditions) is a better measure of the cost of debt than the . the on the company's -term debt is generally used to calculate the cost of debt because more often than not, the capital is being raised to fund -term projects. quantitative problem: 5 years ago, barton industries issued 25-year noncallable, semiannual bonds with a $1,600 face value and a 8% coupon, semiannual payment ($64 payment every 6 months). the bonds currently sell for $845.87. if the firm's marginal tax rate is 40%, what is the firm's after-tax cost of debt? round your answer to 2 decimal places. do not round intermediate calcu

Activity-based costing (abc) is not truly a cost collection mechanism as much as it is an inventory valuation method. the main purpose for implementing an activity-based cost system is to try to overcome some of the cost distortions that occur in traditional costing from product differences when there are variations in size and complexity. however, one of the disadvantages of utilizing abc is that the additional information gathering necessary to implement costing with that level of detail might be beyond the reach of some companies with resource or financial constraints. with this in mind, what kinds of industries or companies do you think would benefit most from using activity-based costing and why? in designing or modifying an accounting system to capture appropriate costs for abc, what considerations do you think would need to be made?