Answer:
the law of comparative advantage
Explanation:
Answer:
Journal Entry
Dr. Contingent Consideration Liability $500,000
Cr. Goodwill $500,000
Explanation:
It is assumed that the decline in the fair value is the correction of the acquisition entry. It means due to this event the consideration liability and goodwill are overstated we need to rectify the balances.
Hence,
The contingent consideration liability will be debited to reduce the liability and goodwill will also be decreased by crediting the goodwill account.
Answer: Alternative 3 will be selected.
Explanation:
The system that should be selected is the alternative that is better than the other alternatives by being higher than MARR if selected.
First compare A1 to A0
The rate of return here is 18% which is higher than the MARR of 15% so Alternative 1 should be chosen over A0 which is to do nothing.
Compare A1 to A2
If A2 is chosen over A1, the incremental return is 10% which is less than the MARR of 15% so A2 should not be chosen over A1. A1 should instead be chosen over A2.
Compare A1 to A3
If A3 is chosen over A1 then the incremental return would be 18%. This is higher than the MARR of 15% so Alternative 3 should be chosen over Alternative 1.
Alternative 3 should be chosen over A1 which should be chosen over A2 and A0.
A3 will therefore be selected.
Answer:
debit to Bad Debts Expense and credit to Allowance for Doubtful Accounts
Explanation:
Based on the information provided for this scenario it can be said that the entry to record this adjusting entry would include a debit to Bad Debts Expense and credit to Allowance for Doubtful Accounts. Meaning that the bad debts expense is increasing while the same amount is being taken from the allowance for doubtful accounts. This is what the allowance method is used for, it provides an advance for uncollectible accounts, by setting aside money in a reserve account.
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