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dexar [7]
3 years ago
15

On January 1, 2017, Accounts Receivable and Allowance for Uncollectible Accounts for Darius Company carried balances of $20,000

and $550, respectively. During the year, the company reported $70,000 of credit sales. There were $400 of receivables written off as uncollectible in 2017. Cash collections of receivables amounted to $74,700. The company estimates that it will be unable to collect 5% of the year-end accounts receivable balance. The amount of bad debts expense recognized in the 2017 income statement will be: ________:
(A) $545
(B) $595
(C) $745
(D) $795
Business
1 answer:
kupik [55]3 years ago
8 0

Answer:

(C) $745

Explanation:

The computation is given below:

For computing the bad debt  expense, first we have to determine the ending account receivable balance which is shown below:

Ending account receivable balance = Beginning account receivable + credit sales - collections - written off amount

= $20,000 + $70,000 - $74,700 - $400

= $15,300

So, the bad debt expense is

= Ending account receivable × given percentage

= $15,300 × 5%

= $745

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GarryVolchara [31]

Answer:

the amount of the loan the pawnbroker made to Jerry is $112.50

Explanation:

In order to find 15% of $750, one method is dividing 750 into 100 to find the value of 1%.

750 ÷ 100 = 7.5

Now we know the value of 1% is $7.50, so all we have to do is multiply that by 15.

7.5 × 15 = 112.5

Therefore, the amount of the loan the pawnbroker made to Jerry is $112.50

5 0
3 years ago
Read 2 more answers
All of the following are assumptions of cost-volume-profit analysis except a.the sales mix is constant. b.costs can be divided i
Vikentia [17]

Answer:

d. within the relevant range of operating activity, the efficiency of operations can change.

Explanation:

Cost-volume-profit analysis is also known as the break even analysis, it is an important tool in predicting the volume of activity, the costs to be incurred, the sales to be made, and the profit to be earned is. It is used to determine how changes in differing levels of activities such as costs and volume affect a company's operating income and net income.

Generally, to use the cost-volume-profit analysis, financial experts usually make some assumptions and these are;

1. Sales price per unit product is kept constant.

2. Variable costs per unit product are kept constant and the total fixed costs of production are kept constant i.e costs can be divided into fixed and variable components.

3. All the units produced are sold i.e there is no change in inventory quantities during the period.

5. The costs accrued are as a result of change in business activities.

6. A company selling more than a product should simply sell in the same mix i.e the sales mix is constant.

<em>Hence, the aforementioned are assumptions of cost-volume-profit analysis except that, within the relevant range of operating activity, the efficiency of operations can change.</em>

6 0
3 years ago
Which of the following would cause a "Prior Period Adjustment" to be reported on the 2025 Statement of Retained Earnings?
Fynjy0 [20]

Answer:

Cause of a "Prior Period Adjustment in 2025 Statement of Retained Earnings:"

A. Failure to Accrue Revenue at 12/31/24, but not 12/31/21 Depreciation Overstatement.

Explanation:

A company's failure to accrue revenue in accordance with the accrual concept and revenue recognition principle means that there is a "Prior Period Error" which must be corrected retrospectively in the financial statements (Retained Earnings).  Retrospective restatement involves the correction of the error arising from the recognition, measurement, and disclosure of amounts of elements of financial statements.  The restatement is done as if a prior period error had never occurred.

5 0
3 years ago
Magnira Corp., a small-scale e-learning firm, recently bought a three-year license of a cloud-based software. The software provi
Daniel [21]

Answer: Communication cost

Explanation:

All or most server companies do allocate some form of liscence to their clients to browse the internet and use some internet tools for space of a period time. This service could either provide internet service or more depending on the cost and the kind of package that was bought. The process of acquiring this could be known as communication cost.

5 0
3 years ago
Getty Company expects sales for the first three months of next year to be $200,000, $235,000, and $298,000, respectively. Getty
GarryVolchara [31]

Answer:

Getty’s cash receipts for the months of February: $225,900

Getty’s cash receipts for the months of March: $281,620

Explanation:

Cash sales:

In January = 35% x $200,000 = $70,000

In February = 35% x $235,000 = $82,250

In March = 35% x $298,000 = $104,300

Credit Sales:

In January = 65% x $200,000 = $130,000

In February = 65% x $235,000 = $152,750

In March = 65% x $298,000 = $193,700

Getty’s cash receipts for the months of February = Cash sales of February + 40% x Credit sales of January + 60% x Credit sales of February = $82,250 + 40% x $130,000 + 60% x $152,750 = $225,900

Getty’s cash receipts for the months of March = Cash sales of March + 40% x Credit sales of February + 60% x Credit sales of March = $104,300 + 40% x $152,750 + 60% x $193,700 = $281,620

8 0
3 years ago
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