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Debora [2.8K]
3 years ago
15

The Allowance for Doubtful Accounts account has a year-end credit balance, prior to adjustment, of $600. The bad debts are estim

ated at 4% of $650,000, the net credit sales. After the appropriate adjusting entry for bad debts, what will be the balance of the Allowance for Doubtful Accounts account?
Business
2 answers:
taurus [48]3 years ago
8 0

Answer:

$26,600

Explanation:

Bad debts expense based on a percentage of credit sales requires an adjusting entry equal to the percentage of credit sales; no consideration is given to the ending balance of the allowance account when computing the adjustment.

The adjusting entry will include a credit to the Allowance for Doubtful Accounts account for $26,000 (or $650,000 x .04).

Note, however, that this question asks for the ending balance in the allowance account.

Since there is a $600 credit balance prior to adjustment, the balance in the allowance account after adjustment will be $26,600

(the credit balance of $600 + a credit of $26,000 will yield an ending credit balance of $26,600).

Yuri [45]3 years ago
5 0

Answer:

$26600

Explanation:

The bad debits are estimated at 4% of $650000 which is = 0.04 * 650000

which is equal to  $26000. from the question above the the year end credit balance of the company prior to adjustment is $600 therefore after the adjustment made due to bad debts the balance of the allowance for doubtful accounts will be : estimated bad debts + credit balance = $26000 + $600 = $26600

Bad debts are debts been owed a company by its debtors or customers which might not be recovered and the little the percentage the better for the company.

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Describe the Allowance for Doubtful Accounts, account:1. What type of account is it? Contra Asset Account 2. What it’s normal ba
Airida [17]

Answer:

contra-assets account.

Credit balance

balance sheet

permanent account.

Explanation:

The allwoance is an account used to adjust accounts receivable to a net value therefore, it is used as contra-asset (to adjust an asset)

Therefore, as assets normal balance is debit a contra-assets in order to adjsut will use credit balance.

<em>Notice:</em> contra-assets decrease the net value of the assets They never increase it. If the princip0al asset increase then, the accounting would use the main asset account, not the contra-asset

Lastly, as it adjsut an asset it will be find in the balnce sheet or in the note to the balance sheet to disclosure the procedure to arrive to net accounts receivables

As it is find in the balance sheet is a permanent account His balance passes through the acouting cycles

3 0
3 years ago
This resume format focuses on the task or skills that an applicant can preform :
Sveta_85 [38]

The correct answer is B.

There are a number of ways to format a resume. A functional resume focuses on the tasks or skills that the applicant can perform.

3 0
3 years ago
Choose a country (not the U.S.) and describe how, in your view, starting up a firm in that foreign country would be different fr
Serggg [28]

Answer:

The description is for Colombia.

Explanation:

In Colombia and any Latin American country, the business creation process is usually more complicated due to the different types of legal procedures that must be carried out, which often ends up increasing informality levels. In the United States, the process is usually easier, since it takes no more than three days and can be done electronically. In Colombia, for example, a different procedure must be carried out for each national or territorial body (local and national taxes), commercial constitution, among other procedures that take approximately one month to complete. In addition, many of these obligations require the advice of a certified accountant who is the most suitable professional to carry out this procedure.

7 0
3 years ago
Sam's Pizza is considering a new store location. For accounting purposes, fixed operating costs for a store are $245,000 a year,
Yuki888 [10]

Answer:

33,793   pizzas

Explanation:

The annual break-even sales level for the number of pizzas sold in the location is computed using the break-even sales units formula  below:

break-even sales=fixed costs/contribution margin per pizza

fixed costs=$245,000

contribution margin per pizza=selling price-variable cost

selling price=$12.50

variable cost=selling price*42%

variable cost=$12.50*42%

variable cost=$5.25

contribution margin per pizza=$12.50-$5.25 =$7.25

break-even sales=$245,000/$7.25 = 33,793   pizzas

5 0
2 years ago
According to classical economics, a decrease in aggregate demand causes the price level to _____________ in the long run. On the
shtirl [24]

Answer: Decrease, Increase, Price flexibility.

Explanation: According to classical economics, a decrease in aggregate demand causes the price level to DECREASE in the long run. On the other hand, an increase in aggregate demand causes the price level to INCREASE in the long run. These changes occur because of PRICE FLEXIBILITY.

In a flexible market the forces of demand and supply determines the prices of commodities in the market.

As the demand Falls the prices also fall as the demand rises the prices of commodities also rises.

3 0
3 years ago
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