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3 years ago

Gonzalez Company has been in business for several years. At the end of the current year, the ledger shows:

Business

1 answer:

Westkost [7]3 years ago

6 0

Answer:

Debit : Bad Debts = $16,370

Credit : Allowance for doubtful debts = $16,370

Explanation:

The question states that bad debts are expected to be 5% of the accounts receivables. This means that it is: $327,400 x 5% = $16,370.

An account for allowance for doubtful debts is a contra account created, predicting that certain debtors will not be able to pay for the goods and services they purchased. The 5% may be based on historical experiences. Doubtful debts aren’t officially uncollectible, it is simply a prediction, but bad debts are, where you have officially written off a certain accounts receivable as uncollectible.

An allowance for doubtful debts is recorded in the balance sheet, directly under accounts receivables. Bad debts are recorded as an expense in the income statement.

The initial entry for allowance for doubtful debts is incorrect, hence it would have to be corrected before the new amount can be recorded. Correction:

Debit : Allowance for doubtful debts = $7900

Credit : Bad debts = $7900

The accounts will be cancelled off and the new entry can be recorded...

Debit : Bad Debts = $16,370

Credit : Allowance for doubtful debts = $16,370

When the amount is officially declared uncollectible, the allowance for doubtful debts account will be debited and the accounts receivables account will be credited.

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Answer:

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Explanation:

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The difference between original sales and the target sale is

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True or False: A price ceiling below $25 per box is not a binding price ceiling in this market. True False Because it takes many

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Answer:

1. False

2. Shortage; Larger

Explanation:

1. A binding price ceiling is one that prevents the market from reaching its equilibrium. In this market, the equilibrium price is $25 therefore anything below $25 will be binding. A price ceiling below $25 per box is a binding ceiling.

2. Assuming that the long-run demand for oranges is the same as the short-run demand, you would expect a binding price ceiling to result in a shortage that is larger in the long run than in the short run.

In the long run, supply is more sensitive because farmers can decide to plant oranges on their land, to plant something else, or to sell their land altogether.

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3 years ago

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Answer:

Income will increase by $84.

Explanation:

The break-even point is the number of units required to cover the fixed costs. Net income is zero.

First, we need to calculate the unitary variable cost:

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Now, the unitary contribution margin:

unitary contribution margin= 120 - 36

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2 years ago

The variance analysis cycle ______. Multiple choice question. begins with the preparation of the budget includes the investigati

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<h3>What is a performance report?</h3>

A performance report is at the heart of the variance analysis cycle.

The performance report details the following:

Calculates the difference between actual and budgeted expenditure and revenue.
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Investigates the reasons for the differences.
Puts the information together and reports to management.

Thus, the variance analysis cycle C. begins with the preparation of performance reports.

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