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Fudgin [204]
3 years ago
9

Sage Company has recorded bad debt expense in the past at a rate of 1.5% of accounts receivable, based on an aging analysis. In

2017, Sage decides to increase its estimate to 2%. If the new rate had been used in prior years, cumulative bad debt expense would have been $387,800 instead of $299,000. In 2017, bad debt expense will be $122,400 instead of $91,130. If Sage’s tax rate is 27%, what amount should it report as the cumulative effect of changing the estimated bad debt rate?
Business
1 answer:
nikitadnepr [17]3 years ago
3 0

Answer:

The cumulative effect of the change in the rate of bad debt will, therefore, be $0.

Explanation:

According to International Accounting Standard 8( IAS 8), any changes in accounting policies (convention, base, principle, etcetera) and period errors are accounted for retrospectively. This means that previous period figures will have to be adjusted.

On the other hand, any changes in estimates are recognized prospectively. This includes reassessment of future benefits and obligations.

From the given information, the change in the rate of bad debt amounts to a change in estimate. As such, the change in this rate will affect the period in which the change took place. That is, 2017 and in future.

The cumulative effect of the change in the rate of bad debt will, therefore, be $0.

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What is an example of an oligopoly?
Andreas93 [3]

Answer:

An oligopoly is a market sector where very few people can compete with

Example would be where a market has 50 competitors and 3 markets make up 90% of the market, therefore it is an oligopoly

Explanation:

5 0
3 years ago
Please help help help
salantis [7]

Answer:

D. Amount of Money you Owe

Explanation:

If you make a payment, and you don't pay it off in the due amount of time you agree to with your bank, your credit score can be drastically diminished, losing your trust with your bank.

6 0
3 years ago
Debt investments not classified as trading or held-to-maturity securities are called available-for-sale securities.
AlexFokin [52]

It is completely inappropriate to mention that debt investments not classified as trading or held-to-maturity securities are called available-for-sale securities. Therefore, the statement given above is false.

<h3>What is the significance of debt investments?</h3>

Investments in the loan instruments or similar classes are regarded as debt investments. These investments cannot be bought or sold or traded in the open market, as unlike equity investments, they are backed by a date of maturity.

Therefore, the statement given above regarding the significance of debt investments is false.

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4 0
1 year ago
There are only three stocks in the economy. Stock A has 20 shares outstanding and a price per share of $10. Stock B has 15 share
gregori [183]

Answer:

Market value of stock A = 20 shares x $10 = $200

Market value of stock B = 15 shares x $3   = $45

Market value of stock C = 10 shares x $5   = $50

Total market value                                          $295

Amount to invest in stock A

= $200/$295 x $5,000

= $3,389.83

Explanation:

In this case, we will calculate the market value of each stock by multiplying the number of each stock by their corresponding market prices.

Thereafter, we will divide the market value of stock A by the total market value multiplied by amount available for investment ($5,000).

7 0
3 years ago
Which characteristics describe customers who are more likely to have high assets and medium-low debt?
Zielflug [23.3K]

Customers with credit cards with no balance are more likely to have high assets and medium-low debt.

<h3>What do you mean by Credit card?</h3>

A credit card is a small rectangular or metal piece of paper issued by a bank or financial services company, which allows cardholders to borrow money to pay for goods and services from merchants who accept cards to pay.

Customers who are more likely to have medium and low credit often use credit cards, but do not leave a balance. They also have a savings account and a retirement account.

Thus, Customers with have credit cards with no balance are more likely to have high assets and medium-low debt.

To learn more about credit card refer:

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7 0
3 years ago
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