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olganol [36]
3 years ago
10

2017 Sold $1,351,700 of merchandise (that had cost $981,800) on credit, terms n/30. Wrote off $21,500 of uncollectible accounts

receivable. Received $670,400 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. 2018 Sold $1,586,800 of merchandise on credit (that had cost $1,326,300), terms n/30. Wrote off $25,300 of uncollectible accounts receivable. Received $1,182,900 cash in payment of accounts receivable. In adjusting the accounts on December 31, the company estimated that 3.00% of accounts receivable will be uncollectible. Required: Prepare journal entries to record Liang’s 2017 and 2018 summarized transactions and its year-end adjustments to record bad debts expense. (The company uses the perpetual inventory system and it applies the allowance method for its accounts receivable.) (Round your intermediate calculations to the nearest dollar amount.)
Business
1 answer:
Fiesta28 [93]3 years ago
7 0

Answer and Explanation:

The Journal entry is shown below:-

1. Accounts receivable Dr, $1,351,700

      To Sales revenue  $1,351,700

(Being merchandise on credit is recorded)

Cost of goods sold Dr, $981,800

       To Merchandise inventory $981,800

(Being cost of goods sold is recorded)

2. Allowance for Uncollectible accounts Dr, $21,500

       To Accounts receivable $21,500

(Being  Uncollectible accounts is receivable is recorded)

3. Cash account Dr, $670,400

          To Accounts receivable $670,400

(Being cash is recorded)

4. Bad debts expenses Dr, $41,294

         To Allowance for uncollectible accounts $41,294

(Being bad debt expenses is recorded)

Working Note

Accounts receivable ($1,351,700 - $21,500  - $670,400)  $659,800

Required balance 3%                                                            $19,794

Add: Debit balance                                                                 $21,500

Bad debt expenses                                                                 $41,294

5. Accounts receivable Dr, $1,586,800

          To  Sales revenue $1,586,800

(Being merchandise on credit is recorded)

Cost of goods sold Dr, $1,326,300

       To Merchandise inventory $1,326,300

(Being cost of goods sold is recorded)

6. Allowance for Uncollectible accounts Dr,  $25,300

         To Accounts receivable $25,300

(Being uncollectible accounts receivable is recorded)

7. Cash account Dr,$1,182,900

           To Accounts receivable $1,182,900

(Being cash is recorded)

8. Bad debts expenses Dr,  $36,658

           To Allowance for uncollectible accounts $36,658

(Being bad debt expenses is recorded)

Working Note

Accounts receivable-Gross    $659,800

Add: Sales                                $1,586,800

Less: Collections                      $1,182,900

Less: Amount write off             $25,300

Balance                                     $1,038,400

Required balance 3%               $31,152

Allowance Balance                   $19,794

Less: Amount written off          $25,300

Debit balance                            $5,506

Add: Required balance             $31,152

Bad debts expenses                 $36,658

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Answer:

The answer is =16.7%

Explanation:

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Tax rate is 25%

Therefore, the applicable tax rate on the earnings is 100% - 25% = 75%

So the Net income is 0.75 x $145,000

Net income = $108,750

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7 0
3 years ago
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Answer:

True

Explanation:

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4 0
3 years ago
Laura is a gourmet chef who runs a small catering business in a competitive industry. Laura specializes in making wedding cakes.
mars1129 [50]

Answer:

The correct answer is the letter a. "Make more than 20 wedding cakes a month."

Explanation:

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5 0
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A project that costs $1,900 to install will provide annual cash flows of $500 for the next 5 years. The firm accepts projects wi
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Answer:

A. 3.8 YEARS

B YES

C $325.91

Explanation:

Payback period is the amount of time it takes to recover the amount invested in a project from its cumulative cash flows.

payback period = amount invested / cash flows

$1,900 / $500 = 3.8 years

the project should be accepted because the payback period is less than the maximum acceptable year

Net present value is the present value of after tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

cash flow in year 0 = $-1900

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NPV = $325.91

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

6 0
3 years ago
services act as a middleman, allowing individuals to securely send and receive money. select all that apply. a. p2p b. b2b c. b2
k0ka [10]

Services act as a middleman, allowing individuals to securely send and receive money is A. p2p

<h3>How to illustrate the information?</h3>

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Therefore, the correct option is A.

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7 0
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