Answer:
A.$8,600
Explanation:
The journal entry to record the bad debt expense is shown below:
Bad debt expense A/c Dr $8,600
To Allowance for doubtful debts $8,600
(Being bad debt expense is recorded)
Since the bad debt expense is an expense so the same is recorded in the debit side of the balance sheet while the estimated uncollectible portion reduces the account receivable balance so we credited it
Mainly income is a huge factor here, if income somehow manages to decrease then there will be a demand on inferior goods because people cannot afford superior goods anymore
Answer:
$52,000
Explanation:
Given the below data
Cash collected(Sales)
= $72,800
Expenses paid = $21,000
Depreciation expenses = $4,400
Increased in accounts receivable = $4,200
Molly's accrued net income is calculated as;
Sales
$72,800
Less expenses
($21,000)
Cash income
$51,800
Less depreciation
($4,400)
Add accounts receivable
$4,200
Less reduction in prepaid expense
($1,500)
Add reduction in Accrued liabilities
$1,900
Accrual basis net income
$52,000
Note*
We added depreciation because it is an expense hence reduces
Increase in accounts receivable means that some sale have been made but not yet paid for; meaning sales increases and was added.
Reduction in prepaid expenses means that some previously paid expenses were not recognized, hence needed to be recognized now. This will however be added to expenses.
Reduction in accrued liabilities means that expenses incurred in previous period have now been paid off hence must be reduced from cash expenses.
Answer:
Alternative 1
Explanation:
We will choose the alternative one because it takes only five years to demonstrate the draft capability development document, and it uses advanced technology demonstrations. On the other hand, we can not choose alternative two because it will take three more years from alternative one to demonstrate the draft CDD.
Answer: Affecting only future periods.
Explanation:
From the question, we are informed that a chain of supermarkets specializing in gourmet food, that has been using the average cost method to value its inventory changed to the FIFO method in the current year.
This change should be reported on the financial statements as a retroactive effect type of an accounting change. This is necessary because it affects future period and in order to maintain comparability and consistency.