Answer:
The bad debts would be debited with $5,000.
Explanation:
The bad debts under the allowance method is calculated by either as a percentage of accounts receivables or as a percentage of sales.
Percentage of Sales method:
In the percentage of sales method the allowance is calculated as below:
Allowance for doubtful debts = Sales * Percentage for doubtful debts
Allowance for doubtful debts = $500,000 * 1% = $5,000
Now always remember that this amount will be used only and their is no need to include the allowance for doubtful accounts balance.
Whereas on the other hand, in the percentage of accounts receivable method the allowances are included in the amount calculated.
The entry would be:
Dr Bad Debt Expense $5000
Cr Allowance for Doubtful Debts $5000
Answer:
Gross profit rate= 0.25
Explanation:
Giving the following information:
Indiana Ink, Inc. has net sales of $400,000 and the cost of goods sold of $300,000.
<u>To calculate the gross profit rate, we need to use the following formula:</u>
Gross profit rate= gross profit / sales
Gross profit= sales - COGS
Gross profit rate= 100,000/400,000
Gross profit rate= 0.25
Answer:
Normative
Positive
Normative
Positive
Explanation:
Positive Economics is objective and statements are usually based on facts and economic theory. They can be tested.
For example, the statement , In some circumstances, if taxes are lowered,
government revenues actually increase, can be tested and it has it basis in economic theory
Normative economics is based value judgements, opinions and perspectives. For example, the statement - taxes are too high - is based on opinion. To some it is too high while to others it would be too low
Answer:
A - "15 y/o"
or
B - "19 y/o"
(There are two types of this question for just choose which one is on it)
Answer:
Barter system
Explanation:
Barter system - it is system of exchanging the good and service with others good and service in that return. the main point to note in this is that medium of offering services and goods is ignored i.e. money.
these type of system is used in society from centuries and long time back before money was introduced.