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SOVA2 [1]
3 years ago
7

During the current year, Robby’s Camera Shop had sales revenue of $169,000, of which $68,000 was on credit. At the start of the

current year, Accounts Receivable showed a $21,000 debit balance and the Allowance for Doubtful Accounts showed a $1,600 credit balance. Collections of accounts receivable during the current year amounted to $51,000.
Data during the current year follows:

(a) On December 31 an Account Receivable (J. Doe) of $1,100 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt.
(b) On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year.

Prepare the required journal entries for the two items on December 31, end of the accounting period.
Business
1 answer:
Mnenie [13.5K]3 years ago
6 0

Answer:

write-off:

allowance for doubtful accounts   1,100 debit

                        accounts receivable                1,100 credit

--to record write-off  J.Doe Account--

bad debt expense        2,040 debit

        allowance for doubtful accounts 2,040 credit

--to adjust for bad debt expense--

Explanation:

The write-off will decrease both, the allowance and accounts receivable. No expense is recognize when performing write-off.

<u>Bad debt expense for the year:</u>

credit sales x expected bad debt

    68,000   x              3%                 = 2,040

As is determined from sales, we adjust for the whole amount.

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Michael is the owner of a company that manufactures mp3 players for cars. He wants to expand his business, so he decides to laun
Grace [21]

Answer:

B) Cannibalization occurs when the sales of a new brand take away from sales of an existing brand. Whenever a firm sells a new product it must look out for cannibalization. Michael's new mp3 players are cannibalizing the sales of his old players.

Explanation:

Market cannibalization occurs when a company's new product line crowds out the existing market for its current products, rather than expanding the company's market base as originally intended. In other words, rather than appealing to an additional segment of the market, a new product line appeals to the company's current market, reducing the demand for its established products. In this respect, market cannibalization is an instance in which a company's own two product lines compete against one another.

5 0
2 years ago
Freeman and Associates is a​ medium-sized construction company specializing in​ high-end custom homes. The bookkeeper handles al
ololo11 [35]

Answer:

Answer is a.

Explanation:

The key word here is "streamlined" system. The aim here is to make the company more efficient and effective by  employing faster or simpler working methods, which many times means utilizing more technology or software. So we need to focus on automating a task and eliminate any type of human intervention. As a result we have to integrate the modules in the financial system.

3 0
3 years ago
In the Keynesian-cross model, fiscal policy has a multiplied effect on income because fiscal policy: changes income, which chang
Zepler [3.9K]

Answer:

Changes income, which changes consumption, which further changes income

Explanation:

Fiscal policy is an effective technique to control savings, income and consumptions because of its multiplier effect. The first effect of fiscal policy is that it changes income and that change in income leads to a change in consumption because of purchasing power; likewise, due to the change in consumption income changes. So, fiscal policy has a multiplier effect.

5 0
3 years ago
For which of the following businesses would the job order cost system be appropriate? a.oil refinery b.canned soup processor c.l
attashe74 [19]

Answer:

The correct answer is letter "C": lumber mill.

Explanation:

Job orders are forms that are given to workers that typically represent a third party to a company so they can perform a specific work. Besides, the job order includes the time expected for the worker to finish the job, the estimated wage charged, the materials needed to perform the job, and the number of employees necessary.

<em>Lumber mills</em> typically work with job orders to provide with cut pieces of wood to furniture enterprises.

4 0
3 years ago
You purchase a bond with an invoice price of $1,080. The bond has a coupon rate of 9.6 percent, semiannual coupons, and a par va
zhuklara [117]

Answer:

$1059.98

Explanation:

To determine the clean price, we have to first find the accrued interest.

Accrued interest = (coupon rate × par value/2) × period (months to next coupon date/12)

accrued interest = $96/2 x 5/12

accrued interest = $48 × 0.417

= $20.016

Our  dirty price = $1080

clean price = dirty price - accrued interest

clean price = $ (1080 - 20.016)

Clean price = $1059.98

6 0
3 years ago
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