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nydimaria [60]
3 years ago
10

Using the aging method of accounts receivable method, $5,000 of the company's Accounts Receivable are estimated to be uncollecti

ble. At the end of the year, the balance of Accounts Receivable is $100,000 and the unadjusted credit balance of the Allowance for Doubtful Accounts is $500. Credit sales during the year totaled $150,000. What is the current year's Bad Debt Expense?
A. $4,500
B. $5,000
C. $7,500
D. $7,000
Business
2 answers:
romanna [79]3 years ago
6 0

Answer:

The answer is A.

Explanation:

Closing/Ending balance in Allowance for Doubtful Accounts = Unadjusted credit (debit) balance in Allowance for Doubtful Accounts + Bad Debt Expense

To get Bad Debt Expense, we re-write the formula:.

Closing/Ending balance in Allowance for Doubtful Accounts − Unadjusted ending credit (debit) balance in Allowance for Doubtful Accounts

Ending/Closing method balance in allowance for doubtful debt= $5,000

Unadjusted ending credit (debit) balance in Allowance for Doubtful Accounts =$500

So we have:

= $5,000 − $500

= $4,500

cluponka [151]3 years ago
5 0

Answer:

A. $4,500

Explanation:

As the Allowance of Doubtful Accounts account already has credit balance of $500, and we need to record $5,000 expense at the end of the year. We know that Allowance of Doubtful Accounts account account has credit nature so it needed $4,500 ($5,000 - $500) to be adjusted at the end of the year to make the adjusted balance equals to $35,000. So, bad debt expense for the year will be $4,500.

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Costs, such as investigating the possibilities of and actually creating or acquiring a trade or business.
Mnenie [13.5K]

Answer:

Start up costs

Explanation:

By definition Startup costs "are the expenses incurred during the process of creating a new business". W can classified as pre start up costs and post start up costs.

For the pre start up costs we have for example research, borrowing costs, and expenses for technology and science.

For the post-opening startup costs we have advertising, promotion, and expenses related to the company.

So the best description for startp up costs is: "Costs, such as investigating the possibilities of and actually creating or acquiring a trade or business."

3 0
3 years ago
According to the equation for the Phillips curve, if nominal wages and labor productivity both increase by 3%, then the inflatio
erastova [34]

Answer:

Increases, decreases

Explanation:

According to the equation for the Phillips curve, if nominal wages and labor productivity both increase by 3%, then the inflation rate increases and unemployment decreases.

The Phillips curve is an economic concept developed by A. W. Phillips stating that <u>inflation and unemployment have a stable and inverse relationship.</u> The theory claims that <u>with economic growth comes inflation</u>, which in turn should lead to more jobs and <u>less unemployment. </u>

<u>Therefore as given in the scenario, wage increase signifies economic growth which will lead to increase in inflation and a decrease in unemployment</u>

5 0
3 years ago
On January 1 of the current year, the Barton Corporation issued 12% bonds with a face value of $88,000. The bonds are sold for $
gogolik [260]

Answer:

b.$11,088

Explanation:

The computation of the interest expense is shown below

= Cash interest + discount amortized

= ($88,000 × 12%) + ($88,000 - $85,360) ÷ 5 years

= $10,560 + $528

= $11,088

Hence, the interest expense is $11,088

Therefore the correct option is b.

We simply applied the above formula so that the correct value could come

And, the same is to be considered

6 0
3 years ago
A company issues $100,000 of 6%, 5-year bonds dated January 1 that pay interest semiannually. The bonds are issued when the mark
lora16 [44]

Answer:

To find the present value of the interest payments, multiply <u>$3,000</u> by the present value factor <u>8.1109</u>.

Explanation:

the market price of the bonds:

  • present value of face value = $100,000 / (1 + 4%)¹⁰ = $67,556.47
  • present value of coupon payments = $3,000 x 8.1109 (PV annuity factor, 4%, 10 periods) = $24,332.70

market price = $91,889.17

Since the market rate is higher than the coupon rate, the bonds will be sold at a discount.

8 0
3 years ago
Sovereign wealth funds (SWFs) are a fast-growing form of foreign direct investment. The size of these funds and the fact that th
Vladimir [108]

Answer:

The correct answer is: the governments who offer these funds may obtain sensitive technologies or gain control of strategic resources

Explanation:

A sovereign investment fund 1 or FSI is a state-owned investment vehicle that controls a portfolio of national and international financial assets. Generally, capital comes from the export of raw materials, such as gas or oil, and its investments are made up of bonds, stocks, financial derivatives, although they also have other types of investments, such as real estate. Because of the credit crunch caused by the 2007 crisis, the FSIs have acquired media notoriety in the bailouts of major banking groups listed on Wall Street such as Citigroup or Merrill Lynch, bringing to light their substantial financial resources. The largest, the Abu Dhabi Investment Authority (ADIA), manages assets estimated at $ 875,000 million, about 3 times the Swiss GDP in 2007. The taking of positions in sectors considered strategic - such as banking - and the opacity of its management worries some governments and international organizations, which begin to limit and regulate the room for maneuver of the FSI.

4 0
3 years ago
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