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Mariulka [41]
3 years ago
12

Utopia Corporation provides $6,000 worth of lawn care on account during the month. Experience suggests that about 3% of net cred

it sales will not be collected. To record the potential bad debts, Utopia Corporation would debit:
a. Bad Debt Expense and credit Accounts Receivable for $180.
b. Accounts Receivable and credit Allowance for Doubtful Accounts for $180.
c. Bad Debt Expense and credit Allowance for Doubtful Accounts for $180.
d. Allowance for Doubtful Accounts and credit Bad Debt Expense for $180.
Business
1 answer:
photoshop1234 [79]3 years ago
6 0

Answer:

The answer is C.

Explanation:

Credit sales is $6,000

Bad debt is 3% of net credit sales which is $180($6,000 x3%)

Creating allowance for doubtful debt entry is one of the prudent method and it tells us that some customers won't pay part of what they are owing. And it is also a contra account that offset bad debt.

According to the accounting rule, debit increases asset and expenses and vice-versa while credit decreases liability, equity, income and vice versa.

So we have have:

Dr Bad debt expense $180

Cr Allowance for Doubtful Accounts $180

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Ralph is contemplating whether to purchase the new technologically advanced Toaster-matic 2000. The Toaster-matic 2000 has the a
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Answer:

Complexity

Explanation:

As an innovation reduces the difficult of a certain activity or process it will have a better reception and therefore, a higher rate of diffusion.

The Toaster-matic 2000 has a knowledge barrier thus, while there is relative advantage(better benefit than any competition) in his use the diffusion is diminish <u>by his complexity. </u>

<u />

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3 years ago
In an Internal Service Fund, the expectation is that:_____.A. Each year's revenues should equal each year's expenses because the
Elis [28]

Answer:

In an Internal Service Fund, the expectation is that:_____.

A. Each year's revenues should equal each year's expenses because the revenues are simply an allocation of that year's expenses.

Explanation:

There are two proprietary funds used in governmental accounting.  One is the internal service fund.  The other one is the enterprise fund.  The internal service fund tracks the goods or services rendered by a service department to other governmental departments.  It is established on a cost reimbursement basis.  This is why the expenses for the year are expected to equal the annual revenue.

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3 years ago
Suppose the U.S. House of Representatives is debating a bill to fund construction and maintenance for the nation's highway syste
Mekhanik [1.2K]

Answer: The authorization of funds for the museum is an example of an earmark.

Explanation:

Earmarking is the act of setting aside particular fund for a specific purpose.

In the United States, earmarks are directive from the Congress that funds should be allocated and spent on certain projects.

For example, one can say the prime minister has earmarked three billion dollars for the construction of new hospitals. The expenditure on the funding of the public art museum is an earmark.

3 0
3 years ago
Monte’s Coffee Company purchased packaging equipment on January 5, 2014, for $90,000. The equipment was expected to have a usefu
Igoryamba

Answer:

1.a

2014 Depreciation

Straight line method $28,000

Units-of-output $37,380

Double declining balance $60,000

2015 Depreciation

Straight line method $28,000

Units-of-output $29,820

Double declining balance $20,000

2016 Depreciation

Straight line method $28,000

Units-of-output $16,800

Double declining balance $6,667

1.B Total Depreciation in 3 years

Straight line method $84,000

Units-of-output $84,000

Double declining balance $86,667

2. Double declining balance yields the highest depreciation expense for 2014

3. Double declining balance yields the highest depreciation expense over the three-year life of an equipment

Explanation:

1.A In computing straight line method, the formula would be:

(cost of equipment - salvage value) / life of equipment

2014

(90,000 - 6,000) / 3 years = 28,000

2015

(90,000 - 6,000) / 3 years = 28,000

2016

(90,000 - 6,000) / 3 years = 28,000

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $84,000 ($28,000 + $28,000 + $28,000)

UNITS-OF-OUTPUT METHOD

Formula: (Cost of equipment - salvage value) / total operating hours of equipment x operating hours used for the year

2014

($90,000 - 6,000) / 20,000 x 8,900

($84,000 / 20,000) x 8,900

$4.2 per hour x 8,900 = $37,380

2015

($90,000 - 6,000) / 20,000 x 7,100

($84,000 / 20,000) x 7,100

$4.2 per hour x 7,100 = $29,820

2016

($90,000 - 6,000) / 20,000 x 4,000

($84,000 / 20,000) x 4,000

$4.2 per hour x 4,000 = $16,800

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $84,000 ($37,380 + $29,820 + $16,800)

DOUBLE DECLINING BALANCE

Formula: 100%/life of equipment x 2

*residual value will not be considered in this method of computation of depreciation expense.

2014

100% / 3 years x 2 = 66,67%

90,000 x 66.67% = $60,000

2015

100% / 3 years x 2 = 66,67%

$90,000 - $60,000 = $30,000

$30,000 x 66.67% = $20,000

2016

100% / 3 years x 2 = 66,67%

$90,000 - ($60,000 + $20,000) = $10,000

$10,000 x 66.67% = $6,667

TOTAL DEPRECIATION IN 3 YEAR LIFE OF EQUIPMENT = $86,667 ($60,000 + $20,000 + $6,667)

2. Double declining method yields the highest depreciation expense in 2014 in the amount of $60,000 as computed above.

3. The method that yields most depreciation over the three-year life of an equipment is the DOUBLE DECLINING METHOD in a total amount of $86,667.

8 0
3 years ago
Payment to a contractor usually is in the form of a
Varvara68 [4.7K]

Answer:

A: fee

Explanation:

Payment to a contractor usually is in the form of a FEE.

The above statement is true because, usually, contractors are paid based on the work or job executed. There are different contract arrangements such as Fixed contracts, cost-plus contracts, Cost-reimbursement contracts, etc. In any of these contracts, contractors are neither paid wages nor salary, but a FEE, which can either be agreed separately or added to the contract sum.

However, contractors don't get benefits from the clients or employers such as medical, disability, life insurance; retirement benefits; fringe benefits, among others.

3 0
2 years ago
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