Answer:
a. Debit Insurance Expense. $660, credit Prepaid Insurance, $660.
Explanation:
The adjusting entry is shown below:
Insurance expense Dr $660 ($3,300 ÷ 5 years)
To Prepaid insurance
(Being the insurance expense is recorded)
here we debited the insurance expense as it increased the expense and credited the prepaid insurance as it decreased the assets
Therefore the option a is correct
Hoosier Burger is experiencing operational problems, such as stock-outs, missing sales and poor customer service. What business functions need improvement and what systems project could provide opportunities for this improvement?
Explanation:
Analyzing the operational problems faced by Hoosier Burguer, it is correct to say that there is a set of organizational functions that could implement improvements in the company. As the improvement of the supply chain management, which would guarantee that the cycle that the product takes from its production until reaching the final consumer was more effective, ensuring that the product arrived in the right quality, in the right quantity and at the right time until the consumer.
It is also essential to improve the sales and marketing functions in the company, in order to implement actions that promote the products, attract more customers and create a better positioning of the company in the market.
Crispy Breakfast places a coupon in each box of its cereal product. Customers may send in five coupons and $3, and the company will send them a recipe book. Sufficient books were purchased at a cost of $5 each. A total of 500,000 boxes of product were sold in the current year. It was estimated that 4% of the coupons would be redeemed. During current year, 9,000 coupons were redeemed. What is Crispy's premium expense for 2013
Answer:
$8,000
Explanation:
premium expense = [(500,000 x 4%) / 5] x ($5 - $3) = 4,000 x $2 = $8,000
the journal entry to record this:
Dr Premium expense 8,000
Cr Estimated premium claims outstanding 8,000
Since the customers must send 5 coupons + $3 in order to get the free recipe book, the actual cost per recipe book = $5 - $3 = $2 per book
in total, the company estimates that 20,000 coupons will be redeemed, but you need 5 coupons per book, so that mean that 4,000 recipe books are expected to be handed out.
The equipment replacement problem is a type of problem that can be modeled as a(n): a. Assignment problem. b. Minimal spanning tree problem. c. Transportation problem. d. Shortest path problem.
Answer:
d. Shortest path problem.
Explanation:
A shortest path problem can be defined as the process of finding the quickest solution or method to solve a specific problem.
Generally, the shortest path problem is modeled as a transshipment problem.
For example, the equipment replacement problem is a type of problem that can be modeled as a shortest path problem.
Mario Company experienced the following events:
1. Purchased merchandise inventory for cash.
2. Sold merchandise inventory on account. Label the revenue recognition 2a and the expense recognition 2b.
3. Returned merchandise purchased on account.
4. Purchased merchandise inventory on account.
5. Paid cash on accounts payable within the discount period.
6. Paid cash for selling and administrative expenses.
7. Sold merchandise inventory for cash. Label the revenue recognition 7a and the expense recognition 7b.
8. Paid cash for transportation-out.
9. Paid cash for transportation-in.
10. Collected cash from accounts receivable not within the discount period.
Required
Identify each event as asset source (AS), asset use (AU), asset exchange (AE), or claims exchange (CE). Also how each event affects the financial statements by selecting the + for increase, − for decrease, or NA for not affected under each of the components in the following statements model. Assume the company uses the perpetual inventory system. In the Cash Flows column, use the letters OA to designate operating activity, IA for investing activity, FA for financing activity, NC for net change in cash and NA to indicate accounts not affected by the event. The first event is recorded as an example.
Answer:
1. Purchased merchandise inventory for cash. ⇒ ASSET EXCHANGE
2. Sold merchandise inventory on account.
2a ⇒ ASSET SOURCE2b ⇒ ASSET USE3. Returned merchandise purchased on account. ⇒ ASSET USE
4. Purchased merchandise inventory on account. ⇒ ASSET SOURCE
5. Paid cash on accounts payable within the discount period. ⇒ ASSET USE
6. Paid cash for selling and administrative expenses. ⇒ ASSET USE
7. Sold merchandise inventory for cash.
7a ⇒ ASSET SOURCE7b ⇒ ASSET USE8. Paid cash for transportation-out. ⇒ ASSET USE
9. Paid cash for transportation-in. ⇒ ASSET EXCHANGE
10. Collected cash from accounts receivable not within the discount period. ⇒ ASSET EXCHANGE
A new manufacturing machine is expected to cost $278,000, have an eight-year life, and a $30,000 salvage value. The machine will yield an annual incremental after-tax income of $35,000 after deducting the straight-line depreciation. Compute the accounting rate of return for the investment.
Answer:
22.7 %
Explanation:
Accounting rate of return = Average Profits / Average Investments × 100
Where,
Average Profit = Sum of Profits ÷ Number of Years
= $35,000
and
Average Investment = (Initial Investment + Salvage Value) ÷ 2
= ($278,000 + $30,000) ÷ 2
= $154,000
Therefore,
Accounting rate of return = $35,000 ÷ $154,000
= 22.7 %
Novak Corp. developed the following information about its inventories in applying the lower of cost or market (LCM) basis in valuing inventories: Product Cost Market
A $139000 $146000
B 98000 93000
C 195000 198000
If Novak applies the LCM basis, the value of the inventory reported on the balance sheet would be:________
a. $442000
b. $432000
c. $437000
d. $427000
Answer: $427,000
Explanation:
Based on the Generally Accepted Accounting principles, to solve this question, the inventory have to be recorded based on the lower cost or net realizable value. This will therefore be:
A = $139,000
B = $93,000
C = $195,000
The value of the inventory reported on the balance sheet would be:
= $139,000 + $93,000 + $195,000
= $427,000
Space Fuel Inc. is considering establishing a new propellant depot to provide space vehicles a refueling point in their trek to Mars. If placed in a LaGrange point, the depot could save $50,000K annually. The depot can be constructed for $200,000K today and will be used for a period of 10 years. It has a salvage value of $10,000K at the end of its useful life. The new depot will require an annual maintenance cost of $9,000K. Capital financing is available at 4.78% per semiannual period compounded monthly. Find the present worth.
Answer:
NPV = $55,894.45
Explanation:
the initial outlay of the project is $200,000
the salvage value is $10,000
useful life 10 years
annual costs $9,000
annual savings $50,000
luckily there are no taxes in space
we must determine the effective interest rate in order to be able to discount the future cash flows
(1 + 0.0478/6)¹² - 1 = 9.99%
the net cash flow per year (for years 1 - 9) = $50,000 - $9,000 = $41,000
net cash flow for year 10 = $41,000 + $10,000 = $51,000
using a financial calculator, the NPV = $55,894.45
For most consumers, maximizing utility through consumption generally means finding good deals in order to maximize the utility received for each dollar spent. However, some makers of luxury goods believe that their customers actually achieve utility by paying high prices. As a result, lowering prices may lead to reduced sales for the makers of luxury goods. How is this counterintuitive concept rationalized by analysis of consumer behavior and the utility maximization rule
Answer:
The explanation of that situation is below.
Explanation:
To begin with, the most important factor to have in mind in the situation explained above is the fact that we are talking about a "luxury good" and therefore that when it comes to this type of goods is better when the majority of the people do not possess or at least they must represent the fact that they are exclusive for only some part of the population. That is why that those goods use the strategy of increase always the price because that will means that they are not affordable for the majority of the society but only for a few and that will give to the owner of the good a sense of uniqueness and with that it also comes the sense of superiority. That is why that when it comes to this type of good the analysis change and it collides with the other theory of utility maximation.
Your parents will retire in 27 years. They currently have $280,000 saved, and they think they will need $1,900,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Round your answer to two decimal places.
Answer:
Annual Rate=7.35%
Explanation:
Calculation for the annual interest rate must they earn to reach their goal
Number of years =27
PV =280,000
FV =1,900,000
Using this formula
Annual Rate=(FV/PV)^(1/n)-1
Let plug in the formula
Annual Rate=(1,900,000/280,000)^(1/27)-1
Annual Rate=6.7857^(1/27)-1
Annual Rate=1.07349-1
Annual Rate=0.0735
Annual Rate=7.35%
Therefore the annual interest rate must they earn to reach their goal will be 7.35%
Rapidly changing technologies, globalization, and changing markets are some of the environmental forces creating a greater need for change leadership within organizations.
a. True
b. False
On January 1, year 1, Glasser Corp. purchased equipment for $120,000. The equipment has a useful life of 3 years, and a residual value of $20,000. Using the sum-of-the-years'-digits method, what is the depreciation expense for year 1?
Answer:
Depreciation expense= $17,000
Explanation:
Giving the following information:
Purchase price= $120,000
Useful life= 3 years
Residual value= $20,000
To calculate the depreciation expense under the sum-of-the-years'-digits, we need to use the following formula:
Depreciation expense= book value*(remaining useful life / sum of the years
Sum of the years= 1 + 2 + 3= 6
Depreciation expense= (120,000 - 20,000) * (1/6)
Depreciation expense= 100,000*0.17
Depreciation expense= $17,000
At the end of May, the unadjusted trial balance of Barker Industries included the following accounts:
Debit Credit
Sales (75% represent credit sales) $400,000
Accounts Receivable $240,000
Allowance For Doubtful Accounts 1,800
Barker Industries uses the percentage of sales approach in estimating uncollectible accounts. The uncollectible accounts expense is estimated to be 3% of credit sales The net realizable value of Barker's accounts receivable in the May 31 balance sheet is:_____.
a. $250,800.b. $229,200.c. $236,400.d. $226,200.
Answer:
b. $229,200
Explanation:
Computation for the net realizable value of Barker's accounts receivable in the May 31 balance sheet
First step is to find the credit sales
Credit sales=.75(400,000)
Credit sales=300,000
Second step is to find the 3% of 300,000
3% of 300,000=9,000
Third step is to add credit sales amount to Allowance For Doubtful Accounts
9,000 +1,800
=$10,800
Last step is to find the net realizable value
Net realizable value=Accounts Receivable $240,000-$10,800
Net realizable value=$229,200
Therefore the net realizable value of Barker's accounts receivable in the May 31 balance sheet is $229,200
Which of the following best describes why German firms were nationalized after World War II?
A. Extract money.
B. Job preservation.
C. Ideology.
D. Happenstance.
Answer:
D. Happenstance.
Explanation:
The fact that German firms were nationalized has often been regarded as mere happenstance; meaning it just occurred based on the circumstances they were in immediately after World War II.
It thus encompasses several factors such as the cost of operations, changes in government, etc, not just one factor.
German firms were nationalized after World War II because of Happenstance.
World War II:The fact that German companies were nationalized has frequently been dismissed as a coincidence, implying that it happened simply because of the circumstances in which they found themselves following World War II.
It thus incorporates multiple aspects, not just one, such as operational costs, government changes, and so on.
So, option "D" is the correct answer to the following question.
Find out more information about 'German'
https://brainly.com/question/1763009?referrer=searchResults
Regulatory policy requires a balance between protecting safety and
protecting constitutional rights.
improving corporate profits.
improving environmental conditions.
protecting states' rights.
Answer:
The answer is A) Protect constitutional right
Explanation:
According to regulatory policy, there needs to be a balance between protecting safety and protecting constitutional rights.
How are regulations enacted?Certain regulations will need to go against the rights of people under the Constitution. For instance, snooping on the devices of suspected terrorists violates the right to privacy.
These people might however be dangerous so there is a need to snoop on them. There therefore needs to be balance between constitutional rights and protecting people.
In conclusion, option A is correct.
Find out more on Constitutional Rights at https://brainly.com/question/1788304.
repps Corporation produces a single product. Last year, Krepps manufactured 25,000 units and sold 20,000 units. Production costs for the year were as follows: Direct materials 180,000 Direct labor 120,000 Variable manufacturing overhead 210,000 Fixed manufacturing overhead 250,000 Sales totaled $850,000 for the year, variable selling and administrative expenses totaled $110,000, and fixed selling and administrative expenses totaled $170,000. There was no beginning inventory. Assume that direct labor is a variable cost. The contribution margin per unit was:
Answer:
unitary contribution margin= $16.6
Explanation:
Giving the following information:
Direct materials 180,000
Direct labor 120,000
Variable manufacturing overhead 210,000
Variable selling and administrative expenses= $110,000
Sales totaled $850,000
First, we need to calculate the unitary production variable cost:
Unitary production variable cost= 510,000/25,000= $20.4
Now, the total unitary variable cost and the selling price:
Total unitary variable cost= (110,000/20,000) + 20.4= $25.9
Selling price= 850,000/20,000= $42.5
Finally, the unitary contribution margin:
unitary contribution margin= 42.5 - 25.9
unitary contribution margin= $16.6
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $216,400 instead of the correct amount of $170,399. The effect on the balance sheet and income statement would be
Answer:
Asset and retained earnings overstated by $46,001
Net income overstated by $46,001
Explanation:
Given the data below;
Correct amount of inventory = $170,399
Inventory incorrectly recorded = $216,400
Inventory over stated by = $216,400 - $170,399
= $46,001
Because the ending inventory is overstated, the net income would also be overstated by $46,001
In the balance sheet, the retained earnings would be overstated by $46,001 as a result of the overstated net income.
We know that ending inventory forms part of the current asset in the balance sheet, hence current asset would be overstated by $46,001 due to the over stated ending inventory.
Use the Gordon growth model formula to compute the price of a stock that will pay a $5 dividend per share next year and the dividend is expected to stay at $5 forever. Assume 5% cost of equity. The price of the stock today is $______
Answer:
the price of the stock today is $100
Explanation:
The computation of the price of the stock today is shown below:
Given that
D1 = 5
Growth Rate = 0%
Cost of Equity = 5%
Now the price of the stock today is
= D1 ÷ Cost of Equity
= $5 ÷ 5%
= $100
Hence, the price of the stock today is $100
We simply applied the above formula so that the correct value could come
And, the same is to be considered
The following U.S. Treasury bond is listed in the The Wall Street Journal: Rate Mo/Yr Bid Asked 9.50 Oct 38 135:30 136:04 This $1,000 par value bond has 18 years to maturity and makes semi-annual coupon interest payments. If you purchased this bond, what would be the bond's yield to maturity
Answer:
6.35%
Explanation:
If you purchase this bond you will need to pay $1,000 x 136.04% = $1,360.40
the coupon rate is 9.5% / 2 = 4.75% or $47.50 every six months
the bond matures in 18 years or 36 semiannual periods
yield to maturity = {coupon + [(face value - market value)/n]} / [(face value + market value)/2]
YTM = {47.5 + [(1,000 - 1,360.4)/36]} / [(1,000 + 1,360.4)/2]
YTM = 37.49 / 1,180.2 = 0.031766 x 2 (annual yield) = 0.06353 = 6.35%
The ledger of Sagovic Rental Agency on March 31 of the current year includes the selected accounts on page 206 before adjusting entries have been prepared. Debits Credits.
Prepaid Insurance ($3600),
Supplies ($3000),
Equipment ($25,000),
Accumulated Depreciation-Equipment (Credit: $8,400),
Notes Payable (Credit: $20,000),
Unearned Rent Revenue (Credit: $12,400),
Rent Revenue (Credit: $60,000),
Interest Expense $0,
Salaries and Wages Expense ($14,000).
An analysis of the accounts shows the following.
1. The equipment depreciates $280 per month.
2. Half of the unearned rent revenue was earned during the quarter.
3. Interest of $400 is accrued on the notes payable.
4. Supplies on hand total $850.
5. Insurance expires at the rate of $400 per month.
Prepare the adjusting entries on March 31, assuming that adjusting entries are made quarterly. Additional accounts are: Depreciation Expense, Insurance Expense, Interest Payable, and Supplies Expense.
Answer:
Sagovic Rental Agency
Adjusting Journal Entries:
1. Debit Depreciation Expense $840
Credit Accumulated Depreciation $840
To record depreciation expense for the quarter at $280 per month.
2. Debit Unearned Rent Revenue $6,200
Credit Rent Revenue $6,200
To record the half of earned rent revenue during the quarter.
3. Debit Interest Expense $400
Credit Interest Payable $00
To accrue interest expense for the quarter.
4. Debit Supplies Expense $2,150
Credit Supplies $2,150
To record supplies expense for the quarter.
5. Debit Insurance Expense $1,200
Credit Prepaid Insurance $1,200
To record insurance expense for 3 months at $400 per month.
Explanation:
a. Data:
Debits Credits.
Prepaid Insurance ($3600),
Supplies ($3000),
Equipment ($25,000),
Accumulated Depreciation-Equipment (Credit: $8,400),
Notes Payable (Credit: $20,000),
Unearned Rent Revenue (Credit: $12,400),
Rent Revenue (Credit: $60,000),
Interest Expense $0,
Salaries and Wages Expense ($14,000).
b. The adjusting entries are made in the books of Sagovic Rental Agency in order to harmonize the accounts with the period's expenses and revenues in line with the accrual and matching principles of generally accepted accounting principles.
g Question 3 (ASC Required - 20 points): After graduation, you work for a few years at a major accounting firm and advance to Senior. However, as part of this role, you start working on a client that is different from your other background: specifically, a major bank located in San Francisco. This bank primarily takes deposits from retail and business customers and lends money out to others. The accounting seems to be completely different from what you are used to and so you go to the Codification to find out what the accounting standards for this industry consist of. Describe the major classes of transactions undertaken by this sort of entity and how they should be accounted for.
Answer with Explanation:
The major transactions that a bank will be involved in are listed below:
Deposits of accounts holders: These deposits are basically the liability of the bank which it will pay them back in near future. Hence it must be recorded as a Current or Non-current liability depending upon the type of account and agreement between the parties to contract. Money lendings to borrowers: This money must be accounted for as a current or non-current asset depending upon the type of account and agreement made.Interest on the money lendings: It is interest income and must be accounted for as revenue.ATM and other Transaction processing charges: These fee charges are also part of income and thus must be accounted for as income.The point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle of A. increasing opportunity cost. B. decreasing marginal price. C. total benefits. D. increasing marginal cost. E. decreasing marginal benefit.
Answer:
E. decreasing marginal benefit.
Explanation:
The law of diminishing marginal utility can be explained as whenever there is rise in the supply of particular goods/services, then the marginal utility falls. Utility in Economics can be regarded as Satisfaction derived from particular goods/services.
Therefore, in the case of the question, point that each glass of lemonade consumed on a hot day brings lower and lower levels of satisfaction is known as the principle
decreasing marginal benefit. Because as the consumption of the lemonade increases, marginal utility gotten from
every added units taken will start reducing like that.
Simmons Mineral Operations, Inc. is a company that has no debt and that has a forecasted EBIT of $324,000 perpetually. Right now the cost of equity of Simmons Mineral Operations, Inc. is 12.4 percent and the corporate tax rate is 34 percent. The firm is in the process of selling $940,000 worth of perpetual bonds with an annual interest rate of 6.6 percent at par. What is the value of Simmons Mineral Operations, Inc. after it issues debt?
Answer:
the value of the amount is $2,062,116
Explanation:
The computation of the value of the amount after issuance of the debt is shown below:
= [[ EBIT × (1 - tax rate) ] ÷ cost of equity] + value of bonds × tax rate
= [$324,000 x 0.66 ] ÷ 0.124 ] + $940,000 x 34%
= $1,742,516 + $319,600
= $2,062,116
hence, the value of the amount is $2,062,116
We simply applied the above formula
"A company manufactures a product using machine cells. Each cell has a design capacity of 250 units per day and an effective capacity of 230 units per day. At present, actual output averages 200 units per cell, but the manager estimates that productivity improvements soon will increase output to 229 units per day. Annual demand is currently 70,000 units. It is forecasted that within two years, annual demand will triple. How many cells will the company require to satisfy predicted demand under these conditions? Assume 243 workdays per year."
Answer:
Number of cells needed = 4
Explanation:
The current output averages 200 units per cell, but the output will soon increase to 229 units per cell per day due to productivity improvements.
The current demand is 70000 units per year and it will triple in 2 years. Hence annual demand to be fulfilled is 70,000*3 = 210,000 units per year.
Assuming 243 workdays per year
Hence, Output per day * 243 = 210000
Output per day = 210000 / 243
Output per day = 864.20
As each cell will produce 229 units per day, number of cells needed will be 864.20 / 229
Hence, Number of cells needed = 4
Advertisers should use an exact match search methodology under all of the following conditions, except Select one: a. people use a variety of keyword phrases b. conversions are being achieved and meeting expectations for this key word c. the search query report is showing a large number of irrelevant keyword search results where the company does not want the ad to appear d. the advertiser is certain about the keyword phrase searchers will use
Answer:
people use a variety of keyword phrases
Explanation:
Using Exact match is very necessary to avoid unnecessary and irrelevant keywords search query report. If not, the ads are going to come up in the pages where the target consumers do not visit. It is also important to have a good knowledge of keywords searchers are likely to use. If not, there will be mismatches.
When variety of key words are used, there would be difficulties as exact match searches may cause the loss of a potential searcher as they are not using the exact match words
What is not a principal tool used by government organizations to constrain the activities of businesses and consumers?
Answer:
The correct answer is: initiating negative social media campaigns and enacting regulations.
Explanation:
The main tool used by government organizations to restrict the activities of companies and consumers is to enact monetary policy and fiscal policy, which defines the inflation rates that affect companies, workers' income and the economy in general, influencing supply and demand directly.
The other option of the question, on the other hand, is not the main tool used by governmental organizations, since initiating negative campaigns on social networks and enacting regulations would be an unethical attitude and which is not of governmental competence, whose one of the fundamental principles is the impersonality of their actions.
If the price of flashlights falls while the demand for batteries rises, is the cross-price elasticity of demand between the pair of products likely to be positive or negative? Therefore, the cross-price elasticity of demand between "substitutes" is most likely most likely_______ and the cross-price elasticities of demand between "complements" is most likely:________
Answer:
negative
positive
negative
Explanation:
Cross price elasticity of demand measures the responsiveness of quantity demanded of good A to changes in price of good B.
If cross price elasticity of demand is positive, it means that the goods are substitute goods.
Substitute goods are goods that can be used in place of another good.
if the price of a good increases, the demand for the substitute increases and if the price of the good reduces, the demand for the substitute increases.
If the cross-price elasticity is negative, it means that the goods are complementary goods.
Complementary goods are goods that are consumed together
Flashlight and batteries are complements because they are used together.
Q 20.26: You are considering upgrading from your current inkjet printer to a laser printer. Your old printer cost $350. The new printer costs $600. Print cartridges for the old printer cost $80 each, and print cartridges for the new printer cost $120 each. Cartridges for both printers last for approximately 500 sheets of printing. Your roommate has offered to purchase your old printer for $50. You expect to print 250 sheets per month. What is the differential cost of purchasing the new printer, considering only the purchase price
Answer:
The differential cost of purchasing the new printer is $250.
Explanation:
Differential cost can be described as the difference between the cost of a change in the level of output, or the cost of two alternative decision.
Therefore, differential cost concept is employed when there are two or more possible option to pursue and decision has to be made to choose one one option and drop the other options.
Since it is indicated in the question that only the purchase price should be considered, the differential cost of purchasing the new printer can be calculated as follows:
Differential cost of purchasing the new printer = Cost of new printer - Cost of old printer ............... (1)
Where;
Cost of new printer = $600
Cost of old printer = $350
Substituting the values into equation (1), we have:
Differential cost of purchasing the new printer = $600 - $350 = $250
Therefore, the differential cost of purchasing the new printer is $250.
If Congress ends an investment tax credit that used to subsidize domestic investment, how would this affect the market for loanable funds in an open economy context?
Answer: Demand will fall, Interest rates will fall
Explanation:
The investment tax credit would have encouraged more companies to seek loanable funds in order to embark on investment opportunities because they would be taxed less. This increase in demand in the market for loanable funds would have led to rates rising to keep up with demand.
If Congress were to end this credit, the incentive to invest and avoid tax would be gone. Companies would therefore demand less loanable funds and with this drop in demand there will be a drop in interest rates as well to entice people to borrow at the lower rates.
How do you think Alden, from Situation 2, found out about Revinate? Given all the online companies that might help your business connect you with customers, how would you choose one?
The correct answer to this open question is the following.
Although you forgot to include the proper context of the question or further references, we can comment on the following.
Alden found out about Revinate by searching on the web trying to find the best software options that could help the company to identify the customer's reviews so Gregory E. Alden could make the best decisions for his company.
Gregory E. Alden is the manager of the company Woodside Hotels, located in Northern California. He was trying to monitor the comments of his high-class clients because Woodside Hotels is in the luxurious hotel business. So knowing that constantly monitoring client's comments on social media pages such as TripAdvisor or Yelp can be an arduous and difficult task, Gregory searched for the best software company to monitor client's comments on social media. That is how he found Revinate, a company that helps managers to track reviews so they can make the best business decisions once they have learned what their customers desire. And that is exactly what I would do to choose the kind of company to know about the preferences of my customers.
The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Accounts Receivable 12,900 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 15% of receivables up to 30 days past due, and 48% of receivables greater than 30 days past due. The accounts receivable balance of $12,900 consists of $10,000 not yet due, $1,600 up to 30 days past due, and $1,300 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense
Answer:
$1,164
Explanation:
Calculation for the appropriate amount of Bad Debt Expense
Bad Debt Expense= (10,000 * 0.07) + (1,600 * 0.15) + (1,300 * 0.48) =
Bad Debt Expense=700+240+624
Bad Debt Expense=1,564 -400
Bad Debt Expense=$1,164
Therefore the appropriate amount of Bad Debt Expense will be $1,164
