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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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The following information for the past year for the Blaine Corporation has been provided:Fixed costs:Manufacturing$ 125, 000$125
natima [27]

Answer:

D. 76.6 %

Explanation:

Contribution Margin Ratio = Contribution / Sales × 100

<em>First Calculate the Contribution</em>

Contribution = Sales - Variable Costs

                     = (60,000 units × $ 12.40) -  ($110,000+$30,000+$34,000)

                     = $744,000 - $174,000

                     = $570,000

<em>Then Calculate Contribution Margin Ratio</em>

Contribution Margin Ratio = $570,000 / $744,000 × 100

                                           = 76.61290

                                           = 76.6 % ( 1 decimal)

5 0
2 years ago
A person who desires high income from an investment would be most concerned with? 
Assoli18 [71]
They should be most concerned with return
6 0
3 years ago
A common-sized income statement, each item is expressed as a percentage of net income. true false
oee [108]

In a common-sized income statement, each item is expressed as a percentage of net income. TRUE

Commonplace-size earnings statement is the vertical evaluation of the income statement. A vertical analysis indicates all gadgets as chances and now not in absolute figures which affords a higher assessment. each line object is expressed as a percent determined by the base parent within the declaration.

A not unusual length earnings statement is an earnings declaration wherein each line item is expressed as a percent of the price of revenue or income. it's far used for vertical analysis, in which each line object in a monetary assertion is represented as a percentage of a base figure inside the assertion.

Commonplace length statements are usually expressed in the form of percentages. therefore, such statements are also known as a hundred according to cent statements or factor percent statements as all of the individual items are taken as a percent of 100.

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8 0
1 year ago
LRQ Inc. issued bonds on April 18, 2006. The bonds had a coupon rate of 5.5%, with interest paid semiannually. The face value of
ankoles [38]

Answer:

$857

Explanation:

Price of the bond is the present value of all cash flows of the bond. These cash flows include the coupon payment and the maturity payment of the bond. Both of these cash flows discounted and added to calculate the value of the bond.

According to given data

Face value of the bond is $1,000

Coupon payment = C = $1,000 x 5.5% = $55 annually = $27.5 semiannually

Number of periods = n = (April 18, 2036 - April 18, 2020) years x 2 = 16 x 2 period = 32 periods

Market Rate = 7% annually = 3.5% semiannually

Price of the bond is calculated by following formula:

Price of the Bond = C x [ ( 1 - ( 1 + r )^-n ) / r ] + [ F / ( 1 + r )^n ]

Price of the Bond = 27.5 x [ ( 1 - ( 1 + 3.5% )^-32 ) / 3.5% ] + [ $1,000 / ( 1 + 3.5% )^32 ]

Price of the Bond = $524.29 + $332.59 = $856.98 = $857

8 0
2 years ago
What causes cost-push inflation
aleksandr82 [10.1K]

Answer: Cost-push inflation is caused by an increase in the prices of the underlying inputs of production.

5 0
3 years ago
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