1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
nadya68 [22]
3 years ago
5

Ervin Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a p

ercentage of credit sales. For 2021, net credit sales totaled $5,200,000, and the estimated bad debt percentage is 1.30%. No previously written-off accounts receivable were reinstated during 2021. The allowance for uncollectible accounts had a credit balance of $49,000 at the beginning of 2021 and $43,500, after adjusting entries, at the end of 2021.
Required:
1. What is bad debt expense for 2021 as a percent of net credit sales?
2. Assume Ervin makes no other adjustment of bad debt expense during 2021. Determine the amount of accounts receivable written off during 2021.
3. If the company uses the direct write-off method, what would bad debt expense be for 2021?
Business
1 answer:
Lera25 [3.4K]3 years ago
3 0

Answer:

1) The bad debts expense for 2021 as a percent of net credit sales is  $ 67,600.

2)Accounts Receivable Written Off $ 24,900

3)If direct method is used the amount of bad debts expense during the year 2021 would be $ 67,600

Explanation:

Ervin Company

Net credit sales  $5,200,000,

Beginning Allowance for Uncollectible Accounts $49,000 Cr

Ending Allowance for Uncollectible Accounts $43,500 Cr

Accounts Receivable Written Off $ 24,900

Estimated Bad debts =   1.30% of  $5,200,000 = $ 67,600

1) The bad debts expense for 2021 as a percent of net credit sales is  $ 67,600.

<h2><u>2.   All. for Uncollectibles    </u></h2><h3><u>Debt                                        Credit </u></h3>

                                  Beg Bal; $ 49,000

Bad debts 67,600

A/R written Off

$24,900

<u>                                          Balance $ 43,500 </u>

2) Accounts Receivable Written Off $ 24,900.

This is found by using a T - account for Allowance for uncollectibles. As the beginning and ending balances of  Allowance for uncollectibles are credit balances, they would go on the credit side and bad debts expense and Account Receivable written off on the debit side as they are the expenses.

3)If direct method is used the amount of bad debts expense during the year 2021 would be $ 67,600

You might be interested in
5. This is the best way to separate sugar and sand mixture.​
den301095 [7]

Answer:

Explanation:

The sugar would dissolve in water. You could then pour off the solution and wash the remaining sand with a bit more water. Heat the water to evaporate it from the sugar, and the two are separated

7 0
2 years ago
Taylor has a retirement account that pays 4% per year compounded monthly. Every month for 20 years, Taylor deposits $444, with t
cupoosta [38]

Answer:

Taylor can withdrawn 1,374.20 dollars each month

Explanation:

Timeline:

deposits of 444 for 20 years =   withdrawals of X for 15 years

   <-----/-/-/-/-/-/-/-/-/-/-/-/-/-/-/-/-/---\\-\-\-\-\-\-\-\-\-\-\-\->

We must calcualte amount to satisfy:

future value of his deposits = present value of his withdrawals

   

We first need to get the future value of the retirement account

and then the PMT this fund can do.

<u>deposits future value:</u>

C \times \frac{(1+r)^{time} -1}{rate} = FV\\

C $ 444

time    240 (20 years x 12 months er year)

rate 0.003333333 ( 0.04 annual rate / 12 months = monthly rate)

444 \times \frac{(1+0.003333333)^{240} -1}{0.003333333} = FV\\

FV $162,847.9340

<u>withdrawals PMT:</u>

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $162,847.93

time 180

rate 0.005

162847.93 \div \frac{1-(1+0.005)^{-180} }{0.005} = C\\

C  $ 1,374.203

6 0
3 years ago
1.​Suppose that in a year an American worker can produce 100 shirts or 20 computers and a Chinese worker can produce 100 shirts
tresset_1 [31]
The answer is a madam
6 0
3 years ago
In previous years, Cox Transport reacquired 4 million treasury shares at $22 per share and, later, 2 million treasury shares at
crimeas [40]

Answer:

$8 million

Explanation:

Weighted-average cost = [(4,000,000 × $22) + (2,000,000 × $25)] ÷ (4,000,000 + 2,000,000) = $23

Increase in paid-in capital - share repurchase per share = selling price —Weighted-average cost = $27 - $23 = $4

Amount of increase in paid-in capital—share repurchase = Number of treasury shares × $4 = 2 million × $4 = $8 million

Therefore, Cox’s paid-in capital - share repurchase will increase by $8 million.

3 0
3 years ago
The Nautical Corporation manufactures custom-made wood wall units. The following data pertains to Job X4A: Direct materials plac
Leokris [45]

Answer:

Total Cost of Job X4A:                                             $

Direct material cost  ($9,000 x 500 units)              4,500,000                              

Direct labour cost (300 hrs x $15 x 500 units )       2,250,000

Overhead applied (100 hrs x $22.50 x 500 units)  1,125,000

Total cost                                                                    7,875,000

Explanation:

The total cost of Job X4A is the aggregate of direct material cost, direct labour cost and overhead applied. Overhead is absorbed on the basis of machine hours. Thus, we will multiply the overhead rate by machine hours and number of units produced.          

7 0
3 years ago
Other questions:
  • A buyer who needs a significant amount of trust with the seller is looking for a(n) _____. transactional relationship strategic
    12·1 answer
  • Nation A makes is illegal for its citizens to own more than one vehicle in order to reduce emissions. Nation A’s neighbor Nation
    15·1 answer
  • Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31,2017, Bri
    14·1 answer
  • You are to make monthly deposits of $700 into a retirement account that pays an APR of 10.2 percent compounded monthly. If your
    5·1 answer
  • Under what conditions does a​ Cobb-Douglas production​ function,
    7·1 answer
  • If the beginning balance of the Accumulated Depreciation—Equipment account is $10,000 and an adjusting journal entry is recorded
    14·1 answer
  • Dividends Per Share Windborn Company has 25,000 shares of cumulative preferred 3% stock, $50 par and 50,000 shares of $15 par co
    14·1 answer
  • A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather j
    15·1 answer
  • Write what you think the
    6·1 answer
  • Majer Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Co
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!