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Vadim26 [7]
3 years ago
12

Assume that Simple Co. had credit sales of $258,000 and cost of goods sold of $158,000 for the period. Simple uses the aging met

hod and estimates that the appropriate ending balance in the Allowance for Doubtful Accounts is $3,800. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $330. What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
Business
1 answer:
Sphinxa [80]3 years ago
3 0

Answer: The amount of bad debt expense the company would record would be $3,470.

Explanation: Bad debt expense is an estimate of accounts receivable that is deemed as uncollectible while allowance for doubtful accounts is a balance sheet allowance account that warehouses the total balance of accounts receivable that is deemed irrecoverable.

In this scenario, Simple Co. estimated, using the aging method, that the allowance for doubtful accounts is $3,800. However, it had a credit balance of $330 in the same account. The reinstate the allowance account to $3,800, $3,470 has to be adjusted for by debiting bad debt expense and crediting allowance for doubtful account.

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Piscataway National Bank pays compound interest on savings accounts, but at different rates depending on the amount of the accou
Natasha2012 [34]

Answer:

It will take 4.2 years

Explanation:

The amount due in the future when a sum of money is invested at a particular interest rate for certain number of years is called Future or compound value.

To calculate the compound value, we use the formula below:

FV = PV * (1+r)^n

FV- future value, PV - Present value, r - interest rate, n - number of years

In this question,

FV - 15,000, PV- 5000, r -3%, n- ?

Substituting this value we have:

15,000 = 5000 × (1+0.03)^n

15000 = 5000 ×  1.03^n

1.03^n = 15,000/5000

1.03^n = 3

log 1.03^n = Log 3

n = Log 3/log 1.03

n = 4.18735

It will take about 4.2 years for the account to reach $15,000

3 0
3 years ago
Two different manufacturing processes are being considered for making a new product. The first process is less capital-intensive
baherus [9]

Answer:

700 units

Explanation:

FC1 : Fixed Costs from process 1

VC1 : Variable cost per unit from process 1

FC2 : Fixed Costs from process 2

VC2 : Variable cost per unit from process 2

FC1 = $50,000

VC1 = $700 per unit

FC2 = $400,000

VC2 = $200 per unit

To calculate the break-even (quantity) point we must equate the TC1 (Total cost of process 1) to TC2 (Total cost of process 2)

TC1 = TC2

FC1 + VC1(y) = FC2 + VC2(y)      where y is the break-even units

50,000 + 700y = 400,000 + 200y

500y = 350,000

y = 350,000 / 500

y = 700 Units

7 0
3 years ago
Read 2 more answers
Wildhorse Co. wrote checks totaling $41500 during October and $45321 during November. $39460 of these checks cleared the bank in
Natalka [10]

Answer: $3,086

Explanation:

Wrote checks totaling $41,500 in

October less $39,460 of these checks cleared in October

Wrote checks totaling $45,321 in November less $44,275 cleared the bank in November

Balance of uncleared checks

In October is $41,500 - $39,460 = $2,040

In November is $45,321 - $44,275 = $1,046

Total outstanding checks on 30 Nov is $2,040+$1,046 = $3,086

8 0
3 years ago
Kingston Co. uses the percentage-of-receivables basis to record bad debt expense.
Troyanec [42]

Answer:

Explanation:

The journal entry to record the bad debt expense is shown below:

Bad debt expense A/c Dr  $2,700

      To Allowance for doubtful debts $2,700

(Being bad debt expense is recorded)

The computation of the bad debt expense is shown below:

= (Accounts receivable × estimated percentage given ) - (credit balance of Allowance for Doubtful Accounts)

= ($420,000 × 1%) -  ($1,500)

= $4,200- $1,500

= $2,700

4 0
3 years ago
Broussard is already at full capacity, so its assets must grow at the same rate as projected sales. At the end of 2019, current
AlekseyPX

Answer: $‭412,600‬

Explanation:

AFN = Increase in assets - Increase in Liabilities - Addition to Retained Earnings

Increase in Assets

= 5,000,000 *  15%

= $750,000

Increase in Liabilities

Only use Accruals and Accounts Payable

= (450,000 + 450,000) * 15%

= $135,000

Additional to Retained Earnings

= After tax Profit

= 9,200,000 * 4%

= $368,000

Addition to retained earnings = 368,000 * ( 1 - payout ratio)

= 368,000 * ( 1 - 45%)

= $202,400‬

Additional Funds Needed (AFN) = 750,000 - 135,000 - 202,400

= $‭412,600

8 0
3 years ago
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