The reynolds corporation buys from its suppliers on terms of 2/11, net 60. reynolds has not been utilizing the discounts offered and has been taking 60 days to pay its bills. mr. duke, reynolds corporation vice president, has suggested that the company begin to take the discounts offered. duke proposes that the company borrow from its bank at a stated rate of 16 percent. the bank requires a 12 percent compensating balance on these loans. current account balances would not be available to meet any of this compensating balance requirement. a. calculate the cost of not taking a cash discount. (use a 360-day year. do not round intermediate calculations. input your answer as a percent rounded to 2 decimal places.) b. what is the effective rate of interest on the bank loan?

The law firm of furlan and benson accumulates costs associated with individual cases, using a job order cost system. the following transactions occurred during july: jul. 3 charged 175 hours of professional (lawyer) time to the obsidian co. breech of contract suit to prepare for the trial, at a rate of $150 per hour. 10 reimbursed travel costs to employees for depositions related to the obsidian case, $12,500. 14 charged 260 hours of professional time for the obsidian trial at a rate of $185 per hour. 18 received invoice from consultants wadsley and harden for $30,000 for expert testimony related to the obsidian trial. 27 applied office overhead at a rate of $62 per professional hour charged to the obsidian case. 31 paid administrative and support salaries of $28,500 for the month. 31 used office supplies for the month, $4,000. 31 paid professional salaries of $74,350 for the month. 31 billed obsidian $172,500 for successful defense of the case. required: a. provide the journal entries for each of these transactions. refer to the chart of accounts for exact wording of account titles. b. how much office overhead is over- or underapplied? c. determine the gross profit on the obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.