1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Diano4ka-milaya [45]
3 years ago
11

Account receivable for Crimson Inc. at the end of December 31, 2018 totals $200,000. This balance is due to four customers not p

aying their bill by the end of the year. James owes $50,000; Fred owes $64,000; Bernie owes 36,000; and Terry owes $50,000. The probabilities of James not paying has been determined to be 20% and Fred, Bernie, and Terry were each assessed a 10% probability.If the balance in the allowance for doubtful accounts has a debit balance of $10,000 then what would be the adjusting entry to needed to update Crimson Inc.’s books?
Business
1 answer:
ivolga24 [154]3 years ago
5 0

Answer:

The adjusting entry to needed to update Crimson Inc.’s books is:

Debit Bad debt expense                                $35,000

Credit Allowance for doubtful accounts       $35,000

<em>(To record bad debt expense)</em>

Explanation:

Crimson Inc. uses the credit risk loss percentage in estimating the amount of accounts receivable that is uncollectible. This approach is similar to the aging method. We would calculate the estimated uncollectible amount as follows:

Debtor  Estimated     Percent   Uncollectible amount

James   $50,000        20%       $10,000

Fred      $64,000        10%         $6,400

Bernie   $36,000        10%         $3,600

Terry     $50,000        10%         $5,000

Total   $200,000                     $25,000

If the balance in the allowance for doubtful accounts has a debit balance of $10,000 then Bad debt expense will be $25,000 + $10,000 = $35,000. The required adjustment is as recorded above.

You might be interested in
What percentage does a bank expect you to put down on a house
myrzilka [38]
Hhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh
5 0
3 years ago
Read 2 more answers
Inventory costing methods place primary reliance on assumptions about the flow of:a. goodsb. costsc. resale pricesd. values
Mrac [35]

Answer: B costs

Explanation:

In business and accounting, cost is the monetary value that has been spent by a company in order to produce something.

Cost accounting aids in decision-making processes by allowing a company to calculate, evaluate, and monitor its costs.

4 0
3 years ago
Read 2 more answers
Degregorio Corporation makes a product that uses a material with the following direct material standards: Standard quantity 2.5
nydimaria [60]

Answer:

Materials quantity variance = $1,750(U)

Explanation:

Standard quantity(SQ) = $2.5 * 6600 = 16500 Kg

Standard Price( SP) = $5  

Actual quantity(AQ) = 16,850 Kg  

Actual Price( AP) = $90,720 / 18,900 kg = $4.8

Materials quantity variance = SP * (SQ - AQ)  

Materials quantity variance = 5 * ( 16500 - 16,850 )

Materials quantity variance = 5 * (350)

Materials quantity variance = $1,750(U)

7 0
3 years ago
What is the best scam ever in Business
mixas84 [53]

Like toys r us it failed because they always had low costs and low profits from their toys.

6 0
3 years ago
Read 2 more answers
Midwest Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of $
Ne4ueva [31]

Answer:

Average rate of return =  14 %

Explanation:

Average rate of return = Annual average return/ Average Investment

Average investment =( Initial investment + scrap value)/2

Average investment = 138,000 + 12,000/2 =75,000

Average annual return = Savings in cost - energy cost - depreciation

Depreciation = (initial cost - scrap value)/2= (138,000 - 12,000)/2= 12600

Average annual return = 29,780-6,680-12600= 10500

Average rate of return = 10,500/75,000 × 100= 14 %

Average rate of return =  14 %

6 0
3 years ago
Other questions:
  • A union election was held by the NLRB at Jaxon Industries, and 130 workers cast votes in the election. How many votes in favor o
    6·1 answer
  • Bobbi and Stuart are partners. The partnership capital of Bobbi is $41,400 and that of Stuart is $74,700. Bobbi sells his intere
    8·1 answer
  • The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. Th
    10·1 answer
  • Assume that computers are a normal good. How will an increase in buyers’ incomes impact the market for computers? a) Demand for
    9·1 answer
  • Bob is unemployed because his skills have become obsolete due to technological advances. this is ____ unemployment.
    9·1 answer
  • The marketing manager of ToyBiz indicated that due to manufacturing efficiencies and market buzz, a new toy they were about to l
    15·1 answer
  • Kimberly Payne and Arionna Maples decide to form a partnership by combining the assets of their separate businesses. Payne contr
    5·1 answer
  • According to a summary of the payroll of Kirby Co., $700,000 in earnings were subject to the 7.6% FICA tax. Also, $108,500 in ea
    9·1 answer
  • What are the six stages of the product adoption process?
    8·1 answer
  • Anyone wants my number for 84 points
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!