Answer:
False
Explanation:
"Microeconomics" is the branch of economic theory that deals with behavior and decision making by small units such as individuals and firms.
However, Macroeconomics deal with structural analysis of the economy as a whole.
Answer: a. $22,000
b. $16,000
Explanation:
The amount to be added to Allowance for Doubtful Accounts in each of the following cases are:
a. Balance of $3,000 in the allowance account just prior to adjustment. Analysis of accounts receivable indicates doubtful accounts of $25,000.
The amount to be added to the allowance for doubtful accounts will be doubtful accounts of $25,000 minus the balance of $3,000 in the allowance account just prior to adjustment. This will be:
= $25,000 - $3000
= $22000
b. Balance of $500 in the allowance account just prior to adjustment. Uncollectibles are estimated at 2% of sales, which totaled $800,000 for the year.
The amount to be added to the allowance for doubtful accounts will be:
= 2% of $800,000
= 2/100 × $800,000
= 0.02 × $800,000
= $16,000
Answer:
c. Increase interest receivable by $250
Explanation:
The question says that the interest and notes receivable amount will be received at maturity and till then the note is an asset while any interest accrued on the note will be our interest revenue and it will also be a current asset as it will be classified as receivable.
We calculate the interest on note receivable,
- 20000 * 0.05 = 1000
- 1000 is the total interest that will be receivable after one year on this notes of 20000
- The interest for the period from July to September is 1000 * 3/12 = 250
- So the interest income pertaining to the period ended 30 September is $250
- This will be recorded by the adjusting entry on 30 Sep as,
Interest Receivable 250 Dr
Interest Income 250 Cr
So, the answer is C.
Answer:
Cash increases by $24,000, Accounts Receivable increases by $22,000, and Consulting Revenue increases by $46,000.
Explanation:
The journal entry is shown below:
Cash $24,000
Accounts receivable $22,000
To Consulting Revenue $46,000
(Being the consulting service provided is recorded)
here the cash and account receivable is increased also at the same time the consulting revenue is also increased as the assets have normal debit balance while the revenue has the normal debit balance