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Nadya [2.5K]
4 years ago
13

Willis Company had $200,000 in credit sales for 2016, and it estimated that 2% of the credit sales would not be collected. The b

alance in Accounts Receivable at the end of the year was $38,000. Willis had never used the allowance method to account for its receivables till 2016. The net realizable value of its accounts receivable at the end of the year was $34,000. True False
Business
1 answer:
HACTEHA [7]4 years ago
7 0

Answer:

True

Explanation:

It's True because you have to deduct from the total Accounts Receivable the balance in the Cr Allowance for Uncollectible Accounts  estimated.

The company estimate that 2% of the total Credit Sales will be uncollectible, which is, $4,000, if we deduct this value of the balance of accounts receivable of $38,000, we have a Net Realizable Value of Accounts Receivable of $34,000

Credit Sales $ 200,000

Cr Allowance for Uncollectible Accounts $ 4,000

Dr Accounts receivable $ 38,000

Net Realizable Value of Accounts receivable $ 34,000

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8 0
3 years ago
13) Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. If the com
AveGali [126]

Answer:

C) over time inflation will fall back down to the inflation target.

Explanation:

In the scenario, there is a positive aggregate demand shock which will lead to inflation because prices of goods will rise as aggregate demand increases with supply being unchanged

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7 0
3 years ago
During the year, Sara sold a capital asset at a loss of $2,000. She had held the asset as an investment. This is the only capita
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<u>Answer: </u>A deduction for a loss incurred on the sale of a capital asset held for investment is a deduction for AGI.

<u>Explanation:</u>

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In this case Sara has got a loss of $2,000 on the investment so this amount is deducted as a capital loss for AGI. AGI factors many allowable deductions from the gross income on which the income tax liability is calculated.

4 0
3 years ago
What is the role of accounting in business
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5 0
3 years ago
A​ company's defined benefit pension plan had a projected benefit obligation​ (PBO) of $ 390 comma 000 on January​ 1, Year 1. Du
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Answer:

$448,800

Explanation:

The computation of the ending balance of PBO is shown below:

Beginning balance of PBO   $390,000

Add: Service cost     $92,000

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Closing balance of  PBO                $448,800

We simply applied the above formula to find out the ending balance of PBO

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3 years ago
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