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
Anettt [7]
2 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]2 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

You might be interested in
Voiles Company reissued 200 shares of its treasury stock. The treasury stock originally cost $25 per share and was reissued for
Naddika [18.5K]

Answer:

The correct option is A,A. 7,000 = NA + 2,000 - (5,000) NA - NA = NA 7.000 FA

Explanation:

By issuing the treasury stock ,asset,cash to be precise increases by $7000($35*200) which implies a debit to the asset ,hence the $7000 seen on the left hand-side of the equation.

This transaction has no liability impact,as a result liabilities is denoted NA,not applicable.

The par value of the treasury is to be credited to treasury stock with $5,000($25*200).

Lastly the difference between the par value and the issue is credited to paid-in capital from treasury stock i.e($35-$25)*200))=$2000,this is depicted by $2000 in the equation

5 0
3 years ago
Prepare a multiple-step income statement for Armstrong Co. from the following data for the year ended December 31. Sales, $755,0
Tatiana [17]

Answer:

See explanation

Explanation:

                       Armstrong Co.

          Multi-step Income Statement

  For the year ended, December 31, 20YY

Sales                                              $755,000

<u>Less: Cost of merchandise sold   (330,000)</u>

Gross Profit                                                    $425,000

Less: Operating expenses

Administrative expenses  $35,000

Selling expenses               $50,000

<em><u>Total operating expenses                               $85,000</u></em>

Income from operation                                 $340,000

Other revenue and expenses:

Rent Revenue                    $25,000

interest expense               ($30,000)

<u>Total other revenues (expenses)                      $(5,000)</u>

Income before taxes                                      $335,000

<u>Less: Income Tax                                                     0</u>

Net Income (loss)                                           $335,000

That is the appropriate way to prepare a multi-step income statement

3 0
2 years ago
When the price of summer tank tops falls and you buy more of them because they are relatively less expensive, this is calledA) t
svet-max [94.6K]

Answer:

The correct answer is A) the substitution effect

Explanation:

In other words, the substitution effect is when sales fall because the consumers change into cheaper alternatives when its price rises.

4 0
3 years ago
As a firm becomes more established, who will be more likely to provide financial capital to the firm?
Crazy boy [7]

Answer:

if I'm correct I think both bondholders and shareholders

6 0
1 year ago
Mini Case Study-Walmart GoLocal
Marat540 [252]

Answer:

can u show the case study

4 0
1 year ago
Other questions:
  • a restaurant would like to be able to announce its daily specials every morning on its website. which of the following social we
    9·1 answer
  • Notes or accounts receivables that result from sales transactions are often called A. non-trade receivables.B. trade receivables
    8·1 answer
  • Business fluctuations are systematic increases and decreases in real GDP. Please select the best answer from the choices provide
    8·2 answers
  • In times of economic downturn, which of the following businesses is most likely to do well?
    10·2 answers
  • If employers do not require a(n) __________, performance appraisal ratings often do not match the normal distribution of a bell-
    10·1 answer
  • Abraham drinks Mountain Dew. He can buy as many cans of Mountain Dew as he wishes at a price of $0.55 per can. On a particular d
    11·1 answer
  • Quake Inc., a software giant, outsources its customer relationship management amenity to Zeins Inc. The contract between the two
    5·1 answer
  • Challenges associated with creating a benchmark program ​
    11·1 answer
  • George is responsible for examining the heating and air conditioning system of an upcoming hotel. So, George is a mechanical____
    15·2 answers
  • Perfectly competitive firms will: increase output up to the point that the marginal revenue of an additional unit of output is e
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!