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2 years ago

Allowance for doubtful accounts is classified as a(n) account and has a normal balance.

Business

1 answer:

tensa zangetsu [6.8K]2 years ago

3 0

Allowance for doubtful accounts is classified as a(n) contra asset account and has a normal credit balance.

<h3>What is contra asset?</h3>

In a general ledger, a contra account is used to lower the value of a linked account when the two are netted together. The natural balance of a contra account is the inverse of the related account. The contra account records a credit if the connected account's natural balance is a debit. As an illustration, accumulated depreciation serves as the contra account for a fixed asset.

An account used in a general ledger to lower the value of a connected account is called a contra account.

They can be used to report a decrease or write-down in a different contra account that nets to the current book value while maintaining the historical value in the main account.

To learn more about contra asset from the given link:

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Shalnov [3]

Answer:

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7 0

3 years ago

James Corporation is planning to issue bonds with a face value of $508,500 and a coupon rate of 6 percent. The bonds mature in 7

lora16 [44]

Answer:

The solution according to the given query is summarized in the explanation segment below.

Explanation:

Given:

Face value,

= $508,500

Coupon rate,

= 6%

Bonds mature in years,

= 7

Now,

(a)

Issue price will be:

= $508500\times 0.75788+15255\times 12.10626$

= $385381.98+184680.99$

= $570,063$ ($)

(b)

Issue price will be:

= $508500\times 0.66112+15255\times 11.29607$

= $336179.52 + 172321.55$

= $508,501$ ($)

(c)

Issue price will be:

= $508500\times 0.55839+15255\times 10.39090$

= $283941.32 +158513.18$

= $442,454$ ($)

8 0

3 years ago

Arthur Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $290,400 and the

timurjin [86]

Answer:

$53,240

Explanation:

We know that,

Break even point = Fixed cost ÷ contribution margin ratio

$290,400 = Fixed cost ÷ 55%

So, the fixed cost = $290,400 × 55% = $159,720

As the variable expense is 45% and we assume the sales is 100%, so the contribution ratio would be 100% - 45% = 55%

Now the margin of safety equal to

= (Expected sales - break even sales) ÷ (expected sales) × 100

25% = (Expected sales - $290,400) ÷ (expected sales) × 100

25% Sales = (Expected sales - $290,400)

So, the expected sales would be

= $290,400 ÷ 75%

= $387,200

Now the actual profit equals to

= Sales - variable expenses - fixed cost

= $387,200 - $174,240 - $159,720

= $53,240

The variable expense is computed below:

= $387,200 × 45%

= $174,240

4 0

3 years ago

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Harman [31]

Community
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7 0

3 years ago

If a California strawberry wholesaler operates in a perfectly competitive market, that wholesaler will have a _____ share of the

Darya [45]

Answer:

half

Explanation:

7 0

3 years ago

Allowance for doubtful accounts is classified as a(n) ______ account and has a normal ______ balance.

Allowance for doubtful accounts is classified as a(n) account and has a normal balance.