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gizmo_the_mogwai [7]
3 years ago
15

At year-end (December 31), Chan Company estimates its bad debts as 0.30% of its annual credit sales of $673,000. Chan records it

s Bad Debts Expense for that estimate. On the following February 1, Chan decides that the $337 account of P. Park is uncollectible and writes it off as a bad debt. On June 5, Park unexpectedly pays the amount previously written off.
Prepare the journal entries for these transactions.

1. Record the estimated bad debts expense.

2. Record the entry to write off P. Park's account as uncollectible.

3. Record the reinstatement of Park's previously written off account.

4. Record the cash received on account.
Business
1 answer:
Rudiy273 years ago
6 0

Answer:

bad debt expense   2,019 debit

       allowance for uncollectible amount  2,019 credit

--to record estimated bad debt expense--

allowance for uncollectible amount 337 debit

                    accounts receivables               337 credit

--to record write-off of P.Park  Account--

accounts receivables               337 debit

       allowance for uncollectible amount 337 credit

--to reverse write-off of P-Park account--

cash                                         337 debit

       accounts receivables               337 credit

--to record collection of P-Park account--

Explanation:

<em>bad debt expense</em> 673,000 x 0.30% = <em>2,019‬</em>

<em />

The write off decreases both, the allowance and accounts receivables

As Park pay up his old debt, the entry is reversed. Then we record the collection as normal.

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Answer:

Answer:

a) Monthly payment = $65.95

b) Remaining balance on her loan after making 12th payment = 11,000 - (65.95 x 12) = $10208.6

c) Interest paid in month 13 = 10208.6 * 0.5% = $51.043

  Principal paid in month 13 = $65.95 - 51.043 = $14.907

Explanation:

Using financial calculator:

PV = 11,000

n = 30 years = 360 months

i/r = 6%/year = 0.5% / month

FV = 0

PMT = ? (Monthly payment = ?)

a) Monthly payment = $65.95

b) Remaining balance on her loan after making 12th payment = 11,000 - (65.95 x 12) = $10208.6

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  Principal paid in month 13 = $65.95 - 51.043 = $14.907

Explanation:

8 0
3 years ago
7. Two farmers, A and B, each apply 100 tons of manure on their fields. To reduce manure runoff, the government has decided to r
valentinak56 [21]

Answer:

Explanation:

1) The total cost of reducing runoff if the farmers are not allowed to trade permits is:

total loss = farmer A' loss + farmer B's loss

where:

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total loss = $1,250 + $2,500 = $3,750

2) The total cost of reducing runoff if the farmers are allowed to trade permits is:

Since farmer A will be willing to sell his permits to farmer B for a price that is ≥ $25 and ≤ $50, the total cost of reducing runoff is $2,500.

If farmer A sells his runoff permit at a price higher than $25 his costs will decrease but farmer B's costs will increase, so any gain due to price change is offset by the other farmer's loss.  

8 0
3 years ago
Wadding Corporation applies manufacturing overhead to products on the basis of standard machine-hours. For the most recent month
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Answer:

$114 unfavorable

Explanation:

For computing the overall variable overhead efficiency variance  first we have to need to find out the standard variable overhead rate which is shown below:

= ($11,680 + $41,900) ÷ 4,700 hours

= $11.4

Now the  variable overhead efficiency variance is

= standard variable overhead rate × (Actual machine hours - standard machine hours)

= $11.4 × (4,740 machine hours - 4,730 machine hours)

= $114 unfavorable

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6 0
3 years ago
has a monthly target operating income of $ 15 comma 000. Variable expenses are 70​% of​ sales, and monthly fixed expenses are $
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Answer:

Margin of safety=55.6%

Explanation:

The formula for the operating income is as folows;

operating income=Sales revenue-total cost

where;

operating income=$ 15,000

Sales revenue=S

total cost=variable cost+fixed cost

variable cost=70% of S=(70/100)×S=0.7 S

fixed cost=$12,000

replacing;

15,000=S-(0.7 S+12,000)

15,000+12,000=0.3 S

27,000=0.3 S

S=27,000/0.3

S=Answer:

Explanation:

The formula for the operating income is as follows;

operating income=Sales revenue-total cost

where;

operating income=$ 15,000

Sales revenue=S

total cost=variable cost+fixed cost

variable cost=70% of S=(70/100)×S=0.7 S

fixed cost=$12,000

replacing;

15,000=S-(0.7 S+12,000)

15,000+12,000=0.3 S

27,000=0.3 S

S=27,000/0.3

S=$90,000

Current sales=$90,000

The formula for margin of safety is as follows;

Margin of safety=(Current sales level-break even point sales level)/current sales levels

At break even,

Operating income=0

0=S-(0.7 S+12,000)

0=S-0.7 S-12,000

0.3 S=12,000

S=12,000/0.3

S=40,000

Break even sales=$40,000

replacing;

Margin of safety=((90,000-40,000)/90,000}×100

Margin of safety=55.6%

7 0
3 years ago
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Answer:

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