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AleksAgata [21]
3 years ago
13

Ana Co. uses the allowance method to account for bad debts. At the end of the period, Ana's unadjusted trial balance shows an ac

counts receivable balance of $40,000; allowance for doubtful accounts balance of $300 (credit and sales of $500,000. Based on history. Ana estimates that bad debts will be 2 of accounts receivable. The entry to record estimated bad debts will include a debit to bad debts expense in the amount of:________.
A. $800
B. $1.100
C. $10.000
D. $9,700
E. $10900
F. $500
Business
1 answer:
Afina-wow [57]3 years ago
6 0

Answer:

A. $800

Explanation:

Ana Co.

Sales                            $500,000        

Accounts Receivable    $40,000      

Allowance for doubtful accounts   $300  Credit

Bad Debts Expense = 2 % of $ 40,000=   $  800          

The adjusting entry would be

Bad Debts Expense $ 800 Dr.

Allowance for doubtful accounts   $800  Credit    

As we already have a credit balance of $ 300 in the doubtful accounts we will increase it with an amount of $ 500.

Allowance for Doubtful Accounts $ 500 Debit

Account Receivable                     $ 500 Credit      

   

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Michael wanted to build a small princess castle for his daughter in the backyard. He decided to turn it into a do-it-yourself pr
givi [52]

Answer:

C)

Explanation:

He can file a strict liability lawsuit against Big Ben Forts for failure to provide adequate instructions on assembling the product.

4 0
2 years ago
A store offers packing and mailing services to customers. The cost of shipping a box is a combination of a flat packing fee of $
strojnjashka [21]

Answer:

equation will be 2x+5

Explanation:

We have given the cost of shipping box = $5

Flat packing fee = $5

As given, the cost of shipping a box is based on its weight in pounds so it is variable

And a flat rate of $5 for packing. This means $5 is common for each parcel that will be sent. Only the weight will vary.

So the equation will be 2x+5

4 0
3 years ago
Read 2 more answers
Sunland Company had the following two transactions related to its delivery truck. 1. Paid $38 for an oil change. 2. Paid $564 to
Jobisdone [24]

Answer:

  • 1. Paid $38 for an oil change.

$38 Maintenance Expenses  - DEBIT

$38 Cash - CREDIT

  • 2. Paid $564 to install special shelving units, which increase the operating efficiency of the truck.

$564 Delivery Trucks - DEBIT

$564 Cash - CREDIT

Explanation:

1. Paid $38 for an oil change  

$38 Maintenance Expenses  - DEBIT

$38 Cash - CREDIT

An oil change it's just an expenses of maintenance, which goes as General Expenses directly to the Income Statement.  

 

2. Paid $564 to install special shelving units, which increase the operating efficiency of the truck.  

$564 Delivery Trucks - DEBIT

$564 Cash - CREDIT

The installations of shelving units it's an improvements in the company's fixed assets, therefore, assets improvements are activated as fixed assets in the non-current assets section of the balance sheets.  

6 0
3 years ago
The development cost of a project X is $150,000. The operating costs for year 1, 2 and 3 respectively are $5000, $6000, and $ 70
Sati [7]

Answer:

NPV= $31,808.91

Explanation:

Giving the following information:

Io= -$150,000.

The operating costs:

Year 1= $5,000

Year 2= $6,000

Year 3= $7,000

The benefits:

Year 1= $80,000

Year 2= $90,000

Year 3= $70,000

To calculate the Net Present Value (NPV) we need to use the following formula:

NPV= -Io + ∑[Cf/(1+i)^n]

Cf= cash flow

Io= -150,000

Cf1= 80,000 - 5,000= 75,000/1.04= $72,115.39

Cf2= 90,000 - 6,000= 84,000/1.04^2=$77,662.72

Cf3= 70,000 - 7,000= 63,000/1.04^3= $56,006.77

NPV= $31,808.91

5 0
3 years ago
What is one example of a planned economy?
Daniel [21]

Answer:

socialist economy

Explanation:

A planned economy is a system where the government or the central authority makes all major economic decisions. The government decides on the type and quantities of goods to produce and for whom to produce. In the planned economy, factors of production belong to the government. Manufacture of goods and services is motivated by service to the community, not profits.

A socialist economy is a good example of a planned economy. Just like in a planned economy, a socialist economy is characterized by heavy government involvement. The state controls the factors of production. Public service is the reason for economic production, while consumers do not have the liberty to choose products.

6 0
3 years ago
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