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Alekssandra [29.7K]
3 years ago
11

Exercise 5-66 Bad Debt Expense: Percentage of Credit Sales Method Gilmore Electronics had the following data for a recent year:

Cash sales $135,000 Credit sales 512,000 Accounts receivable determined to be uncollectible 9,650 The firm's estimated rate for bad debts is 2.2% of credit sales. Required: 1. Prepare the journal entry to write off the uncollectible accounts.
Business
1 answer:
Stels [109]3 years ago
5 0

Answer:  Debit Bad debt expense $11,264, Credit Allowance for bad debt $11,264; Debit Allowance for bad debt $9,650, Credit Accounts receivable $9,650.

Explanation: Percentage of credit sales method means bad debt expense expressed as a percentage of sales.

The estimated bad debts rate is 2.2%, which translates to 2.2% of $512,000 (credit sales) = $11,264. The firm has to record this, being the estimated bad debts rate, as Debit to bad debt expense and Credit to allowance for bad debt. However, accounts receivable that was deemed uncollectible is $9,650. This amount would be taken out from the buffer in allowance account by debiting allowance for bad debt and crediting accounts receivable.

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Flounder has year-end account balances of Sales Revenue $843,779, Interest Revenue $12,160, Cost of Goods Sold $531,052, Adminis
ella [17]

Answer:

Dr Sales Revenue $843,779

Dr Interest Revenue $12,160

Cr Income Summary $855,939

Dr Income Summary $745,754

Cr Cost of Goods Sold $531,052

Cr Administrative Expenses $177,930

Cr Income Tax Expense $36,772

Dr Income Summary $110,185

Cr Retained Earnings $110,185

Dr Retained Earnings $17,793

Cr Dividends $17,793

Explanation:

Preparation for the year-end closing entries.

Dr Sales Revenue $843,779

Dr Interest Revenue $12,160

Cr Income Summary $855,939

($843,779+$12,160)

Dr Income Summary $745,754

($531,052+$177,930+$36,772)

Cr Cost of Goods Sold $531,052

Cr Administrative Expenses $177,930

Cr Income Tax Expense $36,772

Dr Income Summary $110,185

($855,939-$745,754)

Cr Retained Earnings $110,185

Dr Retained Earnings $17,793

Cr Dividends $17,793

5 0
2 years ago
Which of the following is required to be present in an Employment Verification Letter?
Furkat [3]

Answer:

name, title, salary, and dates of employment. 

Explanation:

Im not sure with my answer ♥️

5 0
2 years ago
A stock has a beta of 1.4, an expected return of 17.2 percent, and lies on the security market line. A risk-free asset is yieldi
andrew-mc [135]

Answer:

the portfolio's return will be Ep(r)= 9.2 %

Explanation:

if the stock lies on the security market line , then the expected return will be

Ep(r) = rf + β*( E(M)- rf)

where

Ep(r) = expected return of the portfolio

rf= risk free return

E(M) = expected return of the market

β = portfolio's beta

then

Ep(r) = rf + β*( E(M)- rf)

E(M) = (Ep(r) - rf ) / β + rf

replacing values

E(M) = (Ep(r) - rf ) / β + rf

E(M) = ( 17.2% - 3.2%) /1.4 + 3.2% = 13.2%

since the stock and the risk free asset belongs to the security market line , a combination of both will also lie in this line, then the previous equation of expected return also applies.

Thus for a portfolio of β=0.6

Ep(r) = rf + β*( E(M)- rf) = 3.2% + 0.6*(13.2%-3.2%) = 9.2 %

Ep(r)= 9.2 %

5 0
3 years ago
Simba Company’s standard materials cost per unit of output is $10.00 (2.00 pounds x $5.00). During July, the company purchases a
Lelechka [254]

Answer:

A)1192 A

B) 192 A

C)  1000 A

Explanation:

The Question is to Compute Simba Company's Total, Price, and Quantity materials Variances

1) Computation of material Cost Variance

= The Standard Cost - The Actual Cost of the material

= 1,500 units x 2 pounds = 3000 pounds

Standard Cost = 3,000 pounds x $5 = $15,000

Therefore material variance = $15,000 - $16,192 = 1192A

2) The material Rate Variance or the Price Variance

= (Standard Rate - Actual Rate) Actual Quantity

= Actual Rae = $16,192 / 3200 = $5.06

Material Rate Variance = (5- 5.06) x 3,200

= 192 A

3) The material Usage Variance or Quantity variance

= (The Standard Quantity - Actual Quantity) Standard Rate

Standard Quantity = 1,500 Units x 2 Pounds = 3000 pounds

Material Usage Variance = (3,000-3,200) 5

= 1000 A

5 0
2 years ago
On January 2, 2018, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $58,000. Ranger's net income
insens350 [35]

Answer:

Howdy Doody show in the 2018 income statement as income from this investment is $24225

Explanation:

given data

purchased = 15%

common stock = $58,000

net income 2018 = $15,000

net income 2019 = $58,000

dividend  = $61,500

fair value = $73,000

to find out

How much Howdy Doody show in the 2018 income statement as income from this investment

solution

we know that net income to be reported as income by investment is the sum of income from dividend + unrealised gain

so here

unrealised gain = increase in value of stock that is

= $73,000 - $58,000 = $15000      .............1

and

income from dividend is  = 15 % of $61,500

income from dividend = $9225       .................2

now add equation 1 and 2

Howdy doody show in 2018 income statement as income from this investment = Dividend revenue + Unrealized holding gain

income statement = $9225 + $15000

income statement = $24225

4 0
3 years ago
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