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Nutka1998 [239]
1 year ago
6

The December 31, 2020 balance sheet of Barone Company had Accounts Receivable of $400,000 and a credit balance in Allowance for

Doubtful Accounts of $32,000. During 2021, the following transactions occurred: sales on account $1,500,000; sales returns and allowances, $50,000; collections from customers, $1,250,000; accounts written off $36,000; previously written off accounts of $6,000 were collected.
Business
1 answer:
sergey [27]1 year ago
6 0

Barone Company

General Journal for 2020 transactions:

Debit Accounts Receivable $1,500,000

Credit Sales Revenue $1,500,000

To record sales on account:

Debit Sales Returns $50,000

Credit Accounts Receivable $50,000

To record sales returns and allowances:

Debit Cash Account $1,250,000

Credit Accounts Receivable $1,250,000

To record cash collections from customers:

Debit Allowance for Doubtful Accounts $36,000

Credit Accounts Receivable $36,000

To record uncollectible written-off.

Debit Accounts Receivable $6,000

Credit Allowance for Doubtful Accounts $6,000

To reinstate previously written off accounts.

Debit Cash Account $6,000

Credit Accounts Receivable $6,000

To record collection of previous write-off.

Adjusting Entry at December 31, 2020:

B. Using 3% of net sales:

Debit Bad Debt Expense $41,500

Credit Allowance for Doubtful Accounts $41,500

To record bad debt expense.

C. Using 8% of Receivables:

Debit Bad Debt Expense $43,120

Credit Allowance for Doubtful Accounts $43,1`20

To record bad debt expense.

D. 3% of net sales produces a higher net income and by $1,620

Simplification:

1. Accounts Receivable

Beginning balance (debit) = $400,000

Sales                                     1,500,000

Sales Returns & allowances   (50,000)

Cash Collections                (1,250,000)

Uncollected write-off            (36,000)

Reinstatement of write-off       6,000

Cash Collection                       (6,000)

Ending balance                  $564,000

2. Allowance for Doubtful Accounts

Beginning balance (Credit)   $32,000

Uncollectible write-off            (36,000)

Reinstatement of write-off        6,000

Balance pre-year adjustment $2,000

Using 3% of net sales

Bad debt expense                 $41,500

Ending balance (credit)        $43,500

Balance pre-year adjustment $2,000

Using 8% of receivable balance

Bad debt expense                 $43,120

Ending balance (credit)        $45,120

3. Allowance for Doubtful Accounts (Ending balance)

3% of net sales = $1,450,000 x 3% = $43,500

8% of receivables = $564,000 x8% = $45,120

What Is a Bad Debt Expense?

A bad debt expense is recognized when a receivable is no longer collectible because a customer is unable to fulfill their obligation to pay an outstanding debt due to bankruptcy or other financial problems.

Learn more about bad debt expenses:

brainly.com/question/18568784

#SPJ4

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A company’s unit costs based on 100000 units are: Variable costs $75 Fixed costs 30 The normal unit sales price per unit is $165
Simora [160]

Answer:

$81,000

Explanation:

The computation of the incremental profit (loss) from accepting the order is shown below:

Contribution per unit = $165 - $75

= $90

Now

Loss on contribution for giving up regular sales  is

= $4,100 × 90

= $369,000

Now Incremental contribution for special order is

= ($135 - $75) × 7,500

= $450,000

So,  

Incremental profit is

= $450,000 - $369,000

= $81,000

3 0
3 years ago
Morrow City Inc. manufactures small flash drives and is considering raising the price by 75 cents a unit for the coming year. Wi
JulsSmile [24]

Answer:

Operating profit is projected to be $35,100

Explanation:

                 Morrow City International

Analysis of the Current and Projected demand to determine the Operating Profit

Particulars         Current       Projected     Changes in

                           Demand      Demand       Demand        

Selling price          $8.50           $9.25            0.75

Less: Cost Price    $5.80           $5.80            0

Contribution           $2.7             $3.45            0.75

Margin

Unit Sold                <u>79,000        72,000        -7000</u>

Total                       $213,300     $248,400   $35,100

Contribution

Note: Total contribution = Unit sold * Contribution margin

3 0
3 years ago
Kathy has $50,000 to invest today and would like to determine whether it is realistic for her to achieve her goal of buying a ho
Tresset [83]

Answer:

So she must achieve about 11.61 %

Explanation:

Amount invest by Kathy = $50000

She wanted to buy a home for $150000

Time of investment = 10 years

We have to find the return which she received

Let she receives x return

So according to question 50000\times (1+x)^{10}=150000

(1+x)^{10}=3

(1+x)=3^{0.1}

(1+x)=1.1161

x=0.1161=11.61%

So she must achieve about 11.61 %

4 0
3 years ago
The Comparative Market Analysis (CMA) is a tool for licensees; which statement below is correct about the CMA
Molodets [167]

Option D is correct.  A CMA is not an appraisal and should not be advertised as one.

<h3>What is a comparative market analysis?</h3>

This is the term that is used to refer to the market analysis that may

be done by the real estate agents.

The goal is to analyze and find out the existing prices in the market by the available listings and previous listings of properties. The reason why the real estate agencies carry out the CMA is to determine the right prices for home sellers to sell their homes.

On the other hand, the purpose is to enable the buyers of these homes to buy the properties at the best possible prices.

Complete question

The Comparative Market Analysis (CMA) is a tool for licensees; which statement below is correct about the CMA?

A) The CMA is the same as an appraisal

B) A CMA is an estimate of value and an appraisal is exact value

C) A CMA and an appraisal must both conform to USPAP standards

D) A CMA is not an appraisal - and should not be advertised as one

Read more on market analysis here;brainly.com/question/17246850

#SPJ1

3 0
2 years ago
MV Corporation has debt with market value of ​million, common equity with a book value of ​million, and preferred stock worth mi
kirza4 [7]

Answer:

The Weighted Average cost of capital measures the cost to the company of its current capital structure by using the weights of the various capital measures. WACC usually uses market values so;

Total amount = Debt + Preferred stock + common equity

= 100 million + 20 million + ( 50 * 6 million)

= $420 million

<u>Proportions.</u>

Debt

= 100/420

= 24%

Preferred Stock<u> </u>

= 20/420

= 5%

Common Equity

= 300/420

= 71%

6 0
3 years ago
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