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RoseWind [281]
3 years ago
11

Sunland Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 3% of accounts receivable

will become uncollectible. Accounts receivable are $435,700 at the end of the year, and the allowance for doubtful accounts has a credit balance of $2,653. (a)Prepare the adjusting journal entry to record bad debt expense for the year. (b)If the allowance for doubtful accounts had a debit balance of $827 instead of a credit balance of $2,653, prepare the adjusting journal entry for bad debt expense.
Business
1 answer:
Lelechka [254]3 years ago
5 0

Answer:

Provided Below

Explanation:

Journal entries

(a)    

Date General Journal   DEBIT ($)   CREDIT ($)

Bad Debt Expense          10,418.00  

Allowance for Bad Debts                   10,418.00

(b)    

Date General Journal   DEBIT ($)   CREDIT ($)

Bad Debt Expense          13,898.00  

Allowance for Bad Debts                  13,898.00

Explanation  

(a) 3% of accounts receivable uncollectible = $435,700*3% = $13,071  

Credit balance of allowance for doubtful accounts = $2,653  

Hence, Bad Debt Expense = 13,071 - 2,653 = $10,418  

(b) 3% of accounts receivable uncollectible = $435,700*3% = $13,071  

Debit balance of allowance for doubtful accounts = $827  

Hence, Bad Debt Expense = 13,071 + 827 = $13,898

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Answer:

Journal Entry

Explanation:

1. There are two obligations in this contract

a. keyboard

b. Customer option for future discount

2. Cash Dr,                                                     $69,700

        To Deferred revenue - keyboard                $66,215

        To Deferred revenue - discount coupon    $3,485

(Being cash is recorded)

Working note:-

Keyboards = 4,100 × $19

= $77,900

Option = $41,000 × (0.25 - 0.05) × 0.50

= $4,100

Allocation

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= $77,900 ÷ ($77,900 + 4,100)

= 0.95

Deferred revenue Keyboard = $69,700 × 0.95

= $66,215

Option = 4,100 ÷ ($77,900 + 4,100)

= 0.05

Deferred revenue - discount coupon = $69,700 × 0.05

= $3,485

3. Cash Dr,                                                  $69,700

       To Deferred revenue Keyboard               $69,700

(Being cash is recorded)

4 0
3 years ago
A company purchased a computer system at a cost of $34,000. The estimated useful life is 8 years, and the estimated residual val
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Answer:

Year 2= $4,687.5

Explanation:

Giving the following information:

Purchase price= $34,000

Useful life= 8 years

Salvage value= $9,000

<u>To calculate the depreciation expense under the double-declining-balance, we need to use the following formula:</u>

<u></u>

Annual depreciation= 2*[(book value)/estimated life (years)]

Year 1= [(34,000 - 9,000)/8]*2= $6,250

Year 2= [(25,000 - 6,250)/8]*2= $4,687.5

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3 years ago
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Answer:

telecommuting

Explanation:

Telecommuting is also generally referred to as teleworking and it can be defined as an act which typically involves the process of completing a job function, tasks or work assignments through the use of the internet and in a location other than the office itself.

In this scenario, Nicole works from home full-time for a non-profit organization. She receives work from and sends work to the office via a computer and modem. Thus, this is an example of telecommuting.

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if the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the st
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Expected return of the stock is greater than 12%.

Using formula, Risk free rate + beta (market risk rate - risk free rate)\

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= 13.6 - 0.4* risk premium

Risk premium of a stock is greater than 12%.

A stock's total return takes into account both capital gains and losses as well as dividend income, as opposed to a stock's nominal return, which only displays its price movement. In addition to considering the actual rate of return, investors should consider their ability to withstand the risk involved with a given investment. An investment's return on investment (ROI) provides a general indication of its profitability. The return on investment (ROI) is calculated by subtracting the investment's initial cost from its final value, dividing the result by the cost of the investment, and finally multiplying the result by 100.

Note that the full question is:

If the market risk premium is 7%, the risk-free rate is 2% and the beta of a stock is 2.0, what is the expected return of the stock?

A. less than 12%.

B. 12%.

C. greater than 12%.

D. cannot be determined.

To learn more about returns: brainly.com/question/24301559

#SPJ4

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Marcel supervises a group of paralegals serving the firm's lawyers. He gets along well with his employees, and he has created de
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