Question 2--/1 View Policies Current Attempt in Progress This information relates to Cullumber Co.. 1. On April 5, purchased mer
chandise from Oriole Company for $27,900 on account. 2. On April 7, purchased equipment on account for $31,600. 3. On April 8, returned $3,700 of April 5 merchandise to Oriole Company. 4. On April 15, paid the amount due to Oriole Company in full. Prepare a tabular summary to record the transactions listed above for Rice Co. using a perpetual inventory system. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Simply divide the percentage change in the quantity demand with the percentage change in price, giving you a positive value of 0.5. This shows that it is inelastic and the two goods are substitutes to each other.
This is because the company needs to show the total amount in the Allowance for doubtful accounts as credit balance. It means that if for instance the balance today is $1,057 you'll need a new entry to adjust the balance with the bad debt.
It means that the entry must be a debit in bad debt expense for $3,648 while the corresponding credit goes to allowance for doubtful accounts.
