Answer:
Debit Allowance for doubtful debts $1,200
Credit Accounts receivable $1,200
Being entries to write off uncollectible debt on December 1
Explanation:
When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.
To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.
Where a debit that had previously been determined to have gone bad gets settled, debit cash and credit bad debt expense.
Yes/true/correct/not false
Answer:
The correct answer is option a.
Explanation:
The purchasing power parity theory states that the exchange rate between the currency of the two countries is determined through the relative value of a basket of goods.
The exchange rate will be in equilibrium when the purchasing power in both the countries will be the same, or the price of the basket of goods is the same in both the countries.
The price of soccer balls in the US is $30.
The price of soccer balls in Mexico is $450 pesos.
The exchange rate should be
= 
= 15
This means that each dollar is equal to 15 pesos.
Answer:
Net Cash inflow from operating activities = $125,000
Explanation:
Cash flow from operating activities means only those transactions involving cash which are related to daily business of the company.
Net income = $100,000
Add: Depreciation = $17,500
Add: Amortization = $5,000
Add: Loss on sale of equipment = $2,500
Net Cash inflow from operating activities = $125,000
Note:
1. Depreciation and amortization are non cash expenses thus, added back.
2. Loss on sale of equipment is added as does not relate to operating activity. The entire amount received from sale of equipment is added to investing activity.
Final Answer
Net Cash inflow from operating activities = $125,000
