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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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Grecian Tile Manufacturing of Athens, Georgia, borrows $1,500,000 at LIBOR plus a lending margin of 1.25 percent per annum on a
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Answer: 92812.50

Explanation:

The following information can be derived from the question:

Loan principal = $1,500,000

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The interest will then be:

= 1,500,000 × [(4.50% + 1.25%)/2] + 1,500,000 × [(5.375% + 1.25%)/2]

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2 years ago
HELP ASAP In which situation would government regulation most likely be necessary?
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Bill currently uses his entire budget to purchase 5 cans of Pepsi and 3 hamburgers per week. The price of Pepsi is $1 per can, t
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Answer:

INCREASE the consumption of Pepsi and REDUCE the consumption of Hamburger

Explanation:

Based on the information given we were told that Bill uses his whole budget to purchase the following :

5 cans of Pepsi

3 Hamburgers per week

And the following were the price:

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Hamburger cost $2

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Hamburgers 6

Based on the above details this means that Bill could increase his utility by INCREASING Pepsi consumption and REDUCING hamburger consumption reason been that 5 cans of Pepsi costs $1 per can which will gives us income of $5 ($5×1) while 3 Hamburgers per week cost $2 which will give us income of $6 ($3×2) which typically means that the Hamburgers has more income that Pepsi.

Secondly since the marginal utility for Pepsi is 4 while that of Hamburgers is 6 which means that Hamburgers has higher MARGINAL UTILITY than that of Pepsi because the consumption of Hamburgers is higher than the consumption of Pepsi.

Therefore the best thing that Bill could do in order to increase his Pepsi utility is for Bill to increase Pepsi consumption and reduce hamburger consumption.

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3 years ago
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