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Mars2501 [29]
3 years ago
6

At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales $ 918,000 Credit sales 31

8,000 Its year-end unadjusted trial balance includes the following items. Accounts receivable $ 143,000 debit Allowance for doubtful accounts 6,800 debit Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (a) 5% of credit sales, (b) 3% of total sales and (c) 8% of year-end accounts receivable.
Business
1 answer:
Over [174]3 years ago
4 0

Answer:

The journal entries are as follows:

(a) 5% of credit sales,

Bad debts expense A/c Dr. $15,900

       To Allowance for doubtful accounts   $15,900

(To record the bad debt expense)

Workings:

Uncollectibles:

= 5% × Credit sales

= 5% × $318,000

= $15,900

(b) 3% of total sales,

Bad debts expense A/c Dr. $37,080

       To Allowance for doubtful accounts   $37,080

(To record the bad debt expense)

Workings:

Uncollectibles:

= 3% × Total sales

= 3% × ($318,000 + $918,000)

= $37,080

(c) 8% of year-end accounts receivables,

Bad debts expense A/c Dr. $18,240

       To Allowance for doubtful accounts   $18,240

(To record the bad debt expense)

Workings:

Uncollectibles:

= (8% × year end accounts receivables) + Allowance for doubtful accounts balance

= (8% × $143,000) + $6,800

= $18,240

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During its first year of operations, Maria Rose invested $25,000 in Roseland Inc. in exchange for its common stock. The company
Mazyrski [523]

Answer:

$80,000

Explanation:

During the first year of oeration Maria Rose invested $25,000 in Roseland incorporation

The company earned $68,000 in revenue

They incurred expenses of $32,000

A cash dividend of $5,000 was paid out to Maria

The company owed $24,00£ to its creditors

Assets = liabilities - equity

The first step is to calculate the equity

Equity= common stock - dividend + revenue-expenses incurred

= $25,000-$5,000+$68,000-$32,000

= $20,000+$36,000

= $56,000

Therefore the company's assets can be calculated as follows

= $24,000 + $56,000

= $80,000

Hence the total company's assets is $80,000

8 0
3 years ago
Pizza is a normal good if the demand:__________
kirill115 [55]

Answer:

a. for pizza rises when income rises.

Explanation:

A normal good is a good that people purchase more when their income increases and that have a lower demand when their income decreases, for example, clothing. According to this, the answer is that Pizza is a normal good if the demand for pizza rises when income rises.

The other options are not right because a normal good is determined by the way in which the demand of a product behaves when the income increases or decreases.

3 0
3 years ago
Hurte-Paroxysm Products, Inc. (HP) of the United States exports computer printers to Brazil, whose currency, the reals (symbol R
Kaylis [27]

Answer:

Hurte-Paroxysm Products, Inc. (HP)

The short-run impact of each pricing strategy is as follows:

                                           Alternative 1                      Alternative 2

                             Reduce Price to $170     Maintain Price of $200

Gross profit                        $2,500,000               $3,200,000

Reduction in Gross Profit   $1,500,000                  $800,000

b. (2) maintain the same dollar price of $200, raise the real price in Brazil (to R$800 from R$680)to compensate for the devaluation, and experience a 20% drop in volume.

c. If HP maintains the same real price and same unit volume, the firm's gross profits will be $2,500,000.

Explanation:

a) Data and Calculations:

Exchange rate = R$3.40/US$

Current exports of printers per year to Brazil = 50,000

US unit price of printer in dollars = $200

Brazil unit price of printer in R$ equivalent = R$680 ($200 * R$3.40)

Unit price of printer in R$ when reals is devalued = R$800 ($200 * R$4.00)

The reduced dollar price with devaluation, when real price is maintained = $170 (R$680/R$4.00)

Before Devaluation of Brazil's Real (R$):

Sales volume            50,000

Sales revenue $10,000,000 (50,000 * $200)

Direct costs         6,000,000 (50,000 * $120)

Gross profit       $4,000,000

                              Alternative 1                  Alternative 2

                       Reduce Price to $170     Maintain Price at $200

Sales volume                50,000                      40,000 (50,000 * 80%)

Sales revenue      $8,500,000               $8,000,000 ($200 * 40,000)

Direct costs            6,000,000                  4,800,000 ($120 * 40,000)

Gross profit         $2,500,000                $3,200,000 ($80 * 40,000)

Direct costs = $6m ($120 * 50,000)        = $4.8m ($120 * 40,000)

8 0
3 years ago
Which one of the following statements is true? Select one: a. If the materials price variance is unfavorable, then the materials
Amanda [17]

Answer:

C

Explanation:

Price and quantity variances move in the same direction. If one is favorable, the others will be as well. This is because there is a direct relationship between price and quantity. If one is favourable the other is likely to be favourable and if one is adverse the other is likely to be adverse.

3 0
3 years ago
Your merchant fee is 3%. Your customers paid you 280,000 with cash. What is your total merchant fee?
gayaneshka [121]

Answer:

$8400

Explanation:

to find 3% you multiply 280,000 by 0.03

4 0
3 years ago
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