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Yakvenalex [24]
3 years ago
6

Creek Co. uses the percentage of credit sales method in determining its bad debt expense. The following information comes from t

he accounting records of Creek Co:
Cash sales $250,000
Credit sales 750,000
Total sales 1,000,000
Credit balance in the Allowance for Doubtful Accounts 2,000
Bad debt loss rate 3%
What is the estimate of bad debt expense?
a. $30,000.
b. $22.500.
c. $28,000.
d. $24,500.
Business
1 answer:
Afina-wow [57]3 years ago
5 0

Answer:

b. $22.500.

The estimate of bad debt expense is $22,500

Explanation:

Method of Bad Debt estimation = Percentage of credit sale

Bad Debt Expense = 3% of credit sale  ($750,000)

Bad Debt Expense = 3% x $750,000

Bad Debt Expense = $22,500

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Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $47,500. Assuming that the fixed monthly expe
Natali5045456 [20]

Answer:

c. $36,070

Explanation:

contribution margin ratio is the ratio of the contribution to sales of an entity for a given period.

contribution margin ratio= contribution/sales

where contribution is the difference between sales and the variable cost

Given;

sales = $137,000

contribution margin ratio = 61% = 0.61

0.61 = contribution/$137,000

contribution = $137,000 × 0.61

= $83,570

Net operating income is the difference between the contribution and the fixed cost.

Fixed cost = $47,500

Net operating income = $83,570 - $47,500

= $36,070

3 0
3 years ago
The knowledge and skills acquired by a worker through education and experience is a description of which factor of production? p
Marta_Voda [28]

Answer:

human

Explanation:

I took the test

6 0
3 years ago
Zolezzi Inc. is preparing its cash budget for March. The budgeted beginning cash balance is $26,000. Budgeted cash receipts tota
aliya0001 [1]

Answer:

Calculations below

Explanation:

beginning cash balance $    26,000

Add; Cash receipts         $ 105,000

Total cash available         $ 131,000

Less: Cash disbursments $ (94,000)

Excess (Deficieny) of cash available over disbursments $    37,000

Borrowings ($70,000-$37,000) $    33,000

Ending cash balance $    70,000

5 0
3 years ago
Read 2 more answers
William is interested in exercising more, but does not feel he has the time. Write a short response explaining how he can find t
solong [7]
Exercising doesn't mean you have to spend hours in the gym. Exercises can be done at the comforts of your home too, and there's plenty of exercise available, especially for those who have less time to do so. Just like for example, waiting time. While you are waiting for your clothes in the washing machine to finish, you may use this time to do some basic exercises such as running in place, jumping jacks or carrying weights. 
4 0
3 years ago
Mellon Corporation The data presented below is Mellon Corporation for the year ended December 31, 2015: Sales (100% on credit) $
kaheart [24]

Answer:

The bad debts expense for 2015 would be $ 28,000

Explanation:

The balance of the allowance for doubtful account should be equal to the amount estimated to be uncollectible based on the ageing analysis

Estimated uncollectible account                                                 $ 31,000

Allowance for doubtful accounts prior to adjustment               <u>$   3,000</u>

Bad debts expense for the year to be recorded                    <u> $ 28,000</u>

The accounting entry to record this is as follows:

Bad debts expense                                          Debit               $ 28,000

Allowance for uncollectible accounts            Credit                               $ 28,000

4 0
3 years ago
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