Answer:
B) $27,500.
Explanation:
The computation of the amount credited to the allowance account is shown below:
= Sales during the 2017 year × estimated uncollectible percentage
= $2,750,000 × 1%
= $27,500
By multiplying the sales with the estimated uncollectible percentage we can get the amount credited to the allowance account and the same is to be considered
Hence, the correct option is B
Lowest amount of interest would be annual compounding.
Answer:
Journal entries for the transactions are given below
Explanation:
1. Development of new product
DEBIT CREDIT
Research and development $24,000
Cash $24,000
2. Paid the plaintiff for losing patent
DEBIT CREDIT
Legal fee (expense) $8,000
Cash $8,000
3. Bought Equipment and signed non-interest bearing note
DEBIT CREDIT
Equipment Cash price $37,000
Discount on note payable $5,000
Cash paid $18,000
Note payable $24,000
4. Installed sprinkler system
DEBIT CREDIT
Sprinkler system $40,000
Cash $40,000
5. Plaintiff paid for successful infringement suit on its patent
DEBIT CREDIT
Patent $24,000
Cash $24,000
6. Bought New equipment and traded old one
DEBIT CREDIT
New Equipment $13,600
Accumulated depreciation $6,800
Loss on sale $3,400
Old Equipment $13,400
Cash $10,400
Working:
Accumulated depreciation = Original Cost - book value
Accumulated depreciation = $13,400 - $6,600
Accumulated depreciation = $6,800
Answer:
b. $4,213
Explanation:
Net Operating Profit = Sales - Operating costs - Depreciation Expenses
Net Operating Profit = $172,500 - $140,500 - $9,250
Net Operating Profit = $22,750
Free Cash Flow (FCF) = Net Operating Profit After Tax(NOPAT) – Capital Expenditures – Changes in Net Working Capital
Free Cash Flow (FCF) = Net operating income*(1 - Tax Rate) + Depreciation Expenses - Capital Expenditures - Changes in Net Working Capital
Free Cash Flow (FCF) = $22,750
*(1 - 0.25) + $9,250 - $15,250 - $6,850
Free Cash Flow (FCF) = $22,750
*0.75) + $9,250 - $15,250 - $6,850
Free Cash Flow (FCF) = $17,063 + $9,250 - $15,250 - $6,850
Free Cash Flow (FCF) = $4,213.
Answer:
Direct material used= $88,600
Explanation:
Giving the following information:
Beginning raw materials inventory$12,000
Raw materials purchase 88,000
Ending raw materials inventory 11,400
<u>To calculate the direct material used in production, we need to use the following formula:</u>
Direct material used= beginning inventory + purchases - ending inventory
Direct material used= 12,000 + 88,000 - 11,400
Direct material used= $88,600
