Answer:
The correct option is D
Explanation:
Under the method of allowance, the uncollectible accounts receivable will be recorded in the same accounting period as the sale of an estimate of the bad debt expense. So, the collection of the account which was earlier written off, will not have any affect on the income in the period or year it is received or collected.
Answer:
2018: No pretax income or loss
2019: Income of $2,000.
Explanation:
Given that,
On December 27, 2018
Purchased Coca-Cola bonds at par = $700,000
sold the bonds on January 3, 2019 = $702,000
On December 31, the bonds had a fair value = $699,000
In 2018:
Fair value is less than the purchase value of bonds on 31st December. Therefore, the loss has to be reported under the other comprehensive income.
Hence, there is no income or loss in the year 2018.
In 2019:
Gain/loss on the sale of bonds:
= Sale value - Purchase value
= $702,000 - $700,000
= $2,000
Therefore, the amount of pretax earnings in the year 2019 is $2,000.
Answer:
Correct answer is C, payment of accounts payable
Explanation:
Quick ration is computed by adding CASH & CASH EQUIVALENTS, SHORT TERM INVESTMENT AND CURRENT RECEIVABLES then divided by CURRENT LIABILITIES.
Payment of accounts payable involves 2 current accounts that is a deduction on cash and a deduction on accounts payable. A deduction on CASH and ACCOUNTS PAYABLE won't affect the quick ratio. See some illustration below.
Quick ratio is 1:1 (Cash + Accounts receivable + short term investments) / (Accounts payable + accrued expenses)
Cash $50
Accounts receivable $60
Short term investment $40
Total quick assets $150
Accounts payable $120
Accrued expenses $30
Total current liabilities $150
A payment of $20 to accounts payable will decrease cash by $20 and accounts payable by $20. Makes the quick assets decreased to $130 and current liabilities to $130. Quick assets will is be 1:1 ($130 / $130)
Answer:
a. 15,500 units
b. 6,200 bats and 9,300 gloves
Explanation:
Fixed costs (F)=$620.000
Sales mix=40% bats and 60% gloves
Selling price of bats (Sb) =$90
Variable cost of bats (Vb) =$50
Selling price of gloves(Sg) =$105
Variable cost of gloves (Vg)=$65
The average contribution (C) per unit can be determined as:
In order to reach the break-even point the total contribution of 'n' units must equal fixed costs:
Since we know the sales mix, the number of bats (B) and gloves (G) are:
At the break-even point, 6,200 bats and 9,300 gloves would be sold.