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Anettt [7]
3 years ago
11

Suzuki Supply reports the following amounts at the end of 2021 (before adjustment). Credit Sales for 2021 $ 260,000 Accounts Rec

eivable, December 31, 2021 55,000 Allowance for Uncollectible Accounts, December 31, 2021 1,100 (Credit) 3. Calculate the effect on net income (before taxes) and total assets in 2021 for each method. Suzuki estimates 12% of receivables and 3% of credit sales respectively will not be collected.
Business
1 answer:
Amiraneli [1.4K]3 years ago
7 0

Answer:

1. Suzuki estimates 12% of receivables: Net income (before taxes) in 2021 decreases by $5,500  and total assets in 2021 decreases by $5,500

2. Suzuki estimates 3% of credit sales: Net income (before taxes) in 2021 decreases by $7,800 and total assets in 2021 decreases by $7,800

Explanation:

1. Suzuki estimates 12% of receivables

Bad debts are estimated: 12% x $55,000 = $6,600

Before adjusting, Allowance for Uncollectible Accounts balance of $1,100 (credit).

Bad debts expense = $6,600  - $1,100 = $5,500

The entry will be made:

Debit Bad debts expense $5,500

Credit Allowance for Uncollectible Accounts $5,500

Net income (before taxes) in 2021 decreases by $5,500  and total assets in 2021 decreases by $5,500

2. Suzuki estimates 3% of credit sales

Bad debts are estimated: 3% x $260,000 = $7,800

The company uses the percentage of sales method.

Bad debts expense = $7,800

The entry will be made:

Debit Bad debts expense $7,800

Credit Allowance for Uncollectible Accounts $7,800

Net income (before taxes) in 2021 decreases by $7,800 and total assets in 2021 decreases by $7,800

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1. A parent sells merchandise to its subsidiary at a markup of 20% on cost. In the current year, the subsidiary had $120,000 in
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The subsidiary reports cost of goods sold at A. $660,000.

Explanation:

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The subsidiary calculates its cost of goods sold as follows.

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3 years ago
Price elasticity of demand measures Select one: A. how responsive sales are to changes in the price of a related good. B. how re
Setler79 [48]

Answer:

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6 0
3 years ago
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"Sydney has a portfolio with 50 shares of AAA with a current value of $20 per share, a return of 12%, and a beta of 1.30. She al
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Answer: 12.72%

Explanation:

Given the following information ;

50 Shares of AAA at $20 and expected returns of 12%

25 Shares of BBB at $60 and expected returns of 10%

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Total value of the portfolio ;

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Expected return on portfolio is calculated thus;

Expected Portfolio Return = ( Weight of AAA×Expected Returns ) + ( Weight of BBB×Expected Returns ) + ( Weight of CCC×Expected Returns )

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