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Cerrena [4.2K]
2 years ago
13

Grayhawk Company reported net credit sales of $588,000 for the year ending December 31, 2019. On January 1, 2019, the Allowance

for Doubtful Accounts had a credit balance of $14,400. During 2019, $24,000 of uncollectible accounts receivable were written off. Grayhawk has experienced bad debt losses of 3% of credit sales in prior periods. Using the percentage of credit sales method, what is the adjusted balance in the Allowance for Doubtful Accounts at December 31, 2019?
A) $17, 640


B) $8,400


C) $27,600


D) $8,040
Business
1 answer:
Sever21 [200]2 years ago
5 0

Answer:

D) $8,040

Explanation:

<u>Credit Sales Method:</u>

Bad Debt Losses = 3% of Credit Sales

Bad Debt Losses = 0.03 x $588,000

Bad Debt Losses = $17,640

<u>Adjusted balance in the Allowance for Doubtful Accounts:</u>

Bad Debt Losses - (uncollectible accounts receivable - Allowance for Doubtful Accounts)

$17,640 - ($24,000 - $14,400)

$17,640 - $9,600

$8,040

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When total revenues fall below total costs, production should end. However, if marginal revenue exceeds variable cost, productio
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Answer:

False

Explanation:

A firm should end production and shut down only when its total revenue falls below variable costs, because at this point, production will bring about more losses, compared to if the company isn't producing at all.

<u>If total revenue exceeds and can cover its variable cost, a firm should remain in operation in the short run</u> (even if it is incurring losses), as this contributes to paying off the firm's fixed costs.

8 0
3 years ago
Laval produces lamps and home lighting fixtures. Its most popular product is a brushed aluminum desk lamp. This lamp is made fro
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Answer:

Part 1.  

Plantwide overhead rate for Laval using direct labor hours as a base. is $1.60 per Direct Labor Hour

Part 2.

Total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate is $78.76

Part 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.

                                         Fabricating                  Assembly              

Overheads (R)                      390000                         410000      

Department Cost Driver      152000                         290000      

Overhead Rate                         2.57                                 1.41            

Therefore Overhead Rates are :

            Fabricating Department $ 2.57 per Machine Hour  

            Assembly Department $1.41 per Labor Hour          

Part 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

Direct materials ($270000/21000)                                         12.86

Direct labor:

       Fabricating department(6500/21000×$29)                   8.98

       Assembly department(15200/21000×$26)                   18.82

Overheads:

       Fabricating department(152000/21000×$2.57)           18.60

       Assembly department (290000/21000×$1.41)             19.47

Total manufacturing cost per unit                                         78.73

Explanation:

Part 1.  Plantwide overhead rate for Laval using direct labor hours as a base.

Overhead Rate = Total Overheads/Total Direct Labor Hours

                          = $1.60 per Direct Labor Hour

                                            Fabricating                  Assembly         Total      

Overheads (R)                      390000                         410000       800000

Direct Labor Hrs                  210000                         290000       500000

Overhead Rate                                                                                   1.60

Part 2. Total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate

Direct materials ($270000/21000)                                         12.86

Direct labor:

       Fabricating department(6500/21000×$29)                   8.98

       Assembly department(15200/21000×$26)                   18.82

Overheads:

       Fabricating department(210000/21000×$1.60)            16.00

       Assembly department (290000/21000×$1.60)            22.10

Total manufacturing cost per unit                                         78.76

Part 3. Compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.

Part 4. Use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.

8 0
3 years ago
To avoid libel charges, a journalist who is writing about a local government scandal should 
expeople1 [14]
Check all sources carefully

6 0
3 years ago
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Four years ago, Velvet Purses purchased a mailing machine at a cost of $154808. This equipment is currently valued at $25955 on
AVprozaik [17]

Answer:

the book value of the shareholder equity is $53,413

Explanation:

The computation of the book value of the shareholder equity is shown below;

Book value of shareholders equity is

= Book value of mailing + net working capital - Long term debt

= $25,955 + $92,535  $65,077

= $53,413

Hence, the book value of the shareholder equity is $53,413

5 0
3 years ago
In 2010 the United States posted a current account deficit of -$471 billion. The bulk of the negative value came from: A. a good
Brut [27]

Answer:

A. a goods trade deficit

Explanation:

The current account represent the trade balance (export less import) plus

the net income (person receiving interest, rent or wages from aboard less person and companies paying foreingers) and

the direct payment. ( remittances from wroker to US)

As the US is one of the most open-economies in the world the mayority of this deficit comes from import of good and services from aboard.

Another factor, is that US company invest around the world thus, the net income should be positive.

And becuase the US economy is strong as opposite of Mexico or other Latin America countries, the average US employee abroard will not send their wages to support his family.

Thus, we should ensure the deficit comes from a negative trade deficit.

6 0
3 years ago
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