Concept Questions_Chap2

Concept Questions_Chap2 - Question 1 BLAST OFF Inc is a...

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Question 1 BLAST OFF Inc. is a manufacturer of high powered turbine engines used in private jet airplanes. It has a fiscal year end of June 30 th . During the first six months of the 2009 fiscal year, BLAST OFF Inc. had the following activity: - July 7 th : BLAST OFF receives an order for 10 turbines from “Show-Off Services” (a customized private jet making company) for a total price of $1,500,000. - August 22 nd : BLAST OFF sent a purchase order to its key materials supplier, Alloys for All Ltd., for $250,000 in titanium alloy. - August 25 th : BLAST OFF receives the full order of titanium purchased on July 22 nd , along with the invoice from Alloys for All. Terms of payment stipulate that 50% of the billing is payable in 30 days and the balance is payable in 90 days. - September 15 th : BLAST OFF COMPLETES AND SHIPS 20% of the units to its customer. An invoice for $300,000 is mailed to the customer, with payment terms net 45 days (i.e. full payment is due in 45 days). - September 25: BLAST OFF wire transfers $125,000 to Alloys for All. -
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Concept Questions_Chap2 - Question 1 BLAST OFF Inc is a...

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