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pav-90 [236]
4 years ago
9

2. Using the allowance method, the uncollectible accounts for the year is estimated to be $28,000. If the balance for the Allowa

nce for Doubtful Accounts is a $7,000 credit before adjustment, what is the amount of bad debts expense for the period?a.$7,000b.$21,000c.$28,000d.$35,000
Business
1 answer:
Hoochie [10]4 years ago
8 0

Answer:

b. $21,000

Explanation:

The accounting treatment for uncollectable accounts under allowance method is: Bad debts expense Debit and Allowance for doubtful accounts credit.

In the Question carried forward balance of Allowance for Doubtful accounts is $7,000 and the current year's allowance for doubtful accounts in total is $28,000.

So the amount for of bad debts expense for the period would be:

<h3>$28,000 - $7,000 = $21,000</h3>
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One qualitative forecasting method bases the forecast for a new product or service on the actual sales history of a similar prod
Harrizon [31]

Answer:

Life cycle analogy method

Explanation:

Life cycle analogy method A qualitative forecasting technique that attempts to identify the time frames and demand levels for the introduction, growth, maturity, and decline life cycle stages of a new product

4 0
3 years ago
When commercial banks need more Federal Reserve Notes, Question 16 options: they call the Bureau of Engraving and Printing, whic
romanna [79]

Answer:

they call their Federal Reserve District Bank, which delivers the requested amount.

Explanation:

The Federal Reserve System (popularly referred to as the 'Fed') was created by the Federal Reserve Act, passed by the U.S Congress on the 23rd of December, 1913. The Fed began operations in 1914 and just like all central banks, the Federal Reserve is a United States government agency.

Generally, it comprises of twelve (12) Federal Reserve Bank regionally across the United States of America, which are commonly referred to as Federal Reserve District Bank.

The Fed provides banking services to all the commercial banks in the country because the Federal Reserve is the "lender of last resort."

Hence, when commercial banks such as the regular banks in societies need more Federal Reserve Notes, they call their Federal Reserve District Bank to deliver the requested amount to them.

Additionally, currency in circulation includes all of the US paper currency (dollar bill) that are available in the country while reserves refers to the minimum deposits being held for the U.S Treasury and depository financial institutions by the Fed.

5 0
3 years ago
TRUE OR FALSE: Take-home pay minus total living expenses equals money available for savings and investment
Alik [6]

Answer:

TRUE

Explanation:

Take-home pay is the gross pay minus all deductions. Deductions include statutory and voluntary deductions. Take home is the money that gets to the employee's bank account.

In most households saving and investment are done after meeting the basic expenses. In other words, people will save or invest after meeting their basic needs. Therefore, take home minus total expenses necessary for life is saving and investment

7 0
3 years ago
For an auto insurance company, the average cost of collision claims is $500 per year for careful drivers and $3000 per year for
Rainbow [258]

Answer:

option (c) $875 per year

Explanation:

Given;

Average cost of collision claims for careful drivers = $500 per year

Average cost of collision claims for for poor drivers = $3000 per year

Poor drivers known by the company = 15%

thus,

Careful drivers = (100% - 15%) = 85%

Therefore,

Insurance company's breakeven price for the collision insurance  

= (Poor drivers known × Average cost of collision for poor drivers ) +( Careful drivers × Average cost of collision claims for careful drivers)

= 0.15 × $3000 + 0.85 × $500

= $450 + $425

= $875 per year

Hence, the correct answer is option (c) $875 per year

8 0
3 years ago
Suppose Powers Ltd., just issued a dividend of $1.20 per share on it common stock. The company paid dividends of $.85, $.92, $.9
tino4ka555 [31]

Answer: 11.48%; 11.47%

Explanation:

Given that,

Dividend Issued on common stock = $1.20 per share

Dividend paid in last four years:

$.85 per share

$.92 per share

$.99 per share

$1.09 per share

Stock currently sells at = $53

Calculation of growth rates in dividends :

G1 = \frac{0.92-0.85}{0.85}

    = 8.24%

G2 = \frac{0.99-0.92}{0.92}

     = 7.6%

G3 = \frac{1.09-0.99}{0.99}

     = 10.1%

G4 = \frac{1.20-1.09}{1.09}

     = 10.09%

(1) Arithmetic growth Rate = \frac{8.24+7.6+10.1+10.09}{4}

                                           = 9.01%

Cost of Equity = \frac{(1.20)(1.0901)}{53}+0.0901

                        = 11.48%

(2) Geometric growth Rate

1.20=0.85(1+g)^{4}

G = 9%

Cost of Equity = \frac{(1.20)(1.09)}{53}+0.09

                        = 11.47%

5 0
3 years ago
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