When using the allowance method, the adjusting entry to record estimated bad debt expense includes a ______. (Check all that app
1 answer:
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Answer: B. $1,500
Explanation:
Cost of using Alpha Avenue
= 5,000 + (200 * 30 people)
= $11,000
Cost of using Beta Blvd.
= 8,000 + (150 * 30 people)
= $12,500
Cost savings = 12,500 - 11,000
= $1,500
Answer:
the effective annual rate for Freda is 12.70%
Explanation:
<u>Freda investment</u>
500 shares x $ 35 each x 70% margin = 12,250
<u>Financing taken:</u>
500 shares x $ 35 each x 30% = 5,250
<u>Payment of the loan:</u>
principal x (1 + rate x time)
5,520 x ( 1 + (0.0475 + 0.02) x 8/12) = 5,483.67
<u>Holding return:</u>
(500 shares x 37.5 - 5,483.67)/12,250 - 1 = 0.0830
Then we calcualte the annual equivalent rate to the holding return:
effective rate = 12.70 percent