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Andrej [43]
3 years ago
9

All sales are made on credit. Based on past experience, the company estimates 2.5% of ending account receivable to be uncollecti

ble. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?
Business
1 answer:
Misha Larkins [42]3 years ago
4 0

Answer:

Debit Bad Debts Expense $12,475

Credit Allowance for Doubtful Accounts $12,475

Explanation:

Calculation for estimated bad debts expense:

Explanation

Accounts receivable * Sales uncollectible

$445,000×0.025

=11,125

Hence:

11,125 +Allowance for Doubtful Accounts 1,350

=$12,475

Therefore the estimated bad debt will be:

Debit Bad Debts Expense $12,475

Credit Allowance for Doubtful Accounts $12,475

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Rzqust [24]

Answer:

Dr Available for sale securities 11,500

    Cr Unrealized gains - AFS securities 11,500

Explanation:

The securities cost is $420,000 while the fair market value is $431,500, so the difference is an unrealized gain of = $431,500 - $420,000 = $11,500.

Unrealized gains are included in Other comprehensive income account, which belongs under stockholder equity. When unrealized gains increase, then they should be credited.

Since the securities are held as investment assets, they should also increase by debiting the account.

7 0
3 years ago
On average, 35% of the sales on account are collected in the month of sale, 40% are collected in the month following sale, 10% a
stellarik [79]

Answer:

35% of sales(say $2,000,000) in April

$700,000

Explanation:

Step one :

Assuming that the sales made for April is $2,000,000

According to the conditions in which money is collected 35% of sales made for a month is collected for the month

For april the expected amount

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4 0
3 years ago
Read 2 more answers
You, being a supplier of steak dinners, opened your steak house. Assume the market-clearing price is $20 and the market clearing
Shalnov [3]

Answer:

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Explanation:

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Above condition gives us equilibrium price & quantity.

If market price < equilibrium price, as given case 15 < 20. Then, supply being directly related to price is lesser, demand being inversely related to price is higher. So, there is a situation of excess demand, ie <u>shortage </u>(graphically denoted by distance between demand & supply curve at actual price below equilibrium price)

B] Dealers of hybrid vehicles increase imply increase in supply of these vehicles, rightwards shift in the supply curve. This creates excess supply ie surplus of them. It implies that competition among sellers lead to <u>fall in price </u>of these hybrid vehicles.

7 0
3 years ago
The term inflation is used to describe a situation in which
photoshop1234 [79]

Answer:

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Explanation:

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A certain level of inflation is desirable in an economy to promote growth but a high rate of inflation is harmful. Inflation can be of several types such as  

  • Demand-pull inflation
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There are several measures used to calculate inflation, for instance, the consumer price index. To correct inflationary pressures, a government uses contractionary fiscal and monetary policy.

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Answer:false

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