Answer:
Aging of accounts receivable method.
Explanation:
Accounts receivable are the payments owed to a business by its customers. Bad debt occurs when there is uncertainty that an account receivable will be recovered.
The accounts receivable aging method is used to classify debts based on on the length of time past due.
Classifications such as are based on length of time past due and when to time past due is too long it will be considered to be a loss.
Lengths of time used include: 1-30 days past due, 31-60 days past due, 61-90 days past due, 91-120 days past due, and greater than 120 days past due.
Answer:
Off-Peak daily rate changes
Explanation:
Off peak daily rate changes is strategically changing the price of product and services based on time factor, when number of customer turnaround is very less. The price are fixed lesser than that of price during normal of peak demand time so that customer are motivated to buy the product.
As given in question, early evening drinking time is not considered a healthy drinking practice, hence to induce customer to use drinking service at that time, slightly reduced prices are charged, business have defined it as happy hour .
Since this is time based pricing strategy it can be termed as Off peak daily rate changes.
Answer:
b) $132,100 decrease
Explanation:
The impact on operating income is presented below:
Sales for the year $1,050,000
Less: Variable cost -$860,000
Contribution margin $190,000
Less: fixed cost ($193,000 × 30%) -$57,900
Net operating income $132,100
We simply applied the above equation to find out the net operating income by considering the 30% of fixed cost elimination
So it would show the decrement of $132,100
Answer:The profit is $740
Explanation:4(500)-[3(320)+300]
4x500=2000
3x320=960+320=1260
2000-1260=$740
Answer:
Given that,
Credit balance of allowance for uncollectible accounts = $2,700
Future uncollectible = $13,500
We need to deduct the credit balance from the amount of future uncollectible.
Bad debt expense:
= Future uncollectible - Credit balance of allowance for uncollectible accounts
= $13,500 - $2,700
= $10,800
Therefore, the journal entry is as follows:
Bad debt expense A/c Dr. $10,800
To allowance for doubtful debts $10,800
(To record the allowance for uncollectible accounts)