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Anna007 [38]
3 years ago
11

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible. What entry should be recorded on February

1 to record the write-off assuming the company uses the allowance method? Multiple Choice Debit Bad Debts Expense $2,700; credit Accounts Receivable $2,700. Debit Bad Debts Expense $2,700; credit Allowance for Doubtful Accounts $2,700. Debit Accounts Receivable $2,700; credit Allowance for Doubtful Accounts $2,700. Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700. Debit Allowance for Doubtful Accounts $2,700; credit Bad Debts Expense $2,700.
Business
1 answer:
Anvisha [2.4K]3 years ago
5 0

Answer:

On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.

The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:

Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.

Explanation:

Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.

The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount.  Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order.  This method is unlike the direct write-off method.  With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.

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Answer:

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         Average operating assets

ROI = $1,924,320   x 100

         $6,000,000

ROI = 32.1%

The correct answer is C

Explanation:

ROI is the ratio of net operating income to average operating assets multiplied by 100.

3 0
3 years ago
A company discovered in 2013 that it had overstated the inventory balance for Dec 31, 2011 by $10,000. The company had (incorrec
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Answer:

Corrected Net Income for 2011 = $290,000

Corrected Net Income for 2012 = $410,000

Explanation:

Data provided in the question:

The overstated the inventory balance for Dec 31, 2011 = $10,000

The reported Net Income for 2011 =  $300,000

The reported Net Income for 2012 =  $400,000

Now,

Since the inventory is overstated in the year 2011, it will be subtracted from the reported incorrect Net Income for 2011

Thus,

Corrected Net Income for 2011 = $300,000 - $10,000

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And, for the year 2012 the overstated inventory will be added to the reported Net Income for 2012

thus,

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= $410,000

7 0
3 years ago
Debbie acquired a franchise to operate a donut shop from dollar donuts, inc., for $100,000. she incurred an additional $4,000 in
MissTica

The franchisee cost that should be capitalised, will be the total amount incurred to acquire the franchisee , which is $100000, the legal fees of $4000 will also be added to the amount as it has been incurred in assciation with the acquisition thus the total cost which should be capitalised will be $100000+$4000 which comes to a total of $104000.

7 0
3 years ago
Under ideal conditions inflation should not have any blurring effect on price signals. If wages and prices are rising at a const
fgiga [73]

Answer:

1. Adjustments of or changes in price are not smooth or synchronized.

2. Inflation rarely have impact on the prices of inputs.

3. The concentration of sellers is more on nominal prices of goods than real prices.

Explanation:

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The following are the reasons inflation in the real world result in shortages and surpluses:

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5 0
3 years ago
Debt Book Equity Market Equity Operating Income Interest Expense Firm A 500 300 400 100 50 Firm B 80 35 40 8 7 1. What is the ma
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Answer:

Data for Question

<u>Debt</u>  <u>Book Equity</u>  <u>Market Equity</u>  <u>Operating Income</u>  <u>Interest Expense</u>

Firm A

500       300                  400                       100                          50

Firm B

80          35                    40                           8                             7

1.

Market debt-to-equity ratio = Debt of Firm / Market Equity

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2.

Book debt-to-equity ratio = Debt of Firm / Book Equity

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Firm B = 80 / 35 = 2.29

3.

Interest coverage ratio = Operating Income / Interest Expense

Firm A = 100 /50 = 2

Firm B = 8 / 7 = 1.14

4.

Firm B will have more difficulty meeting its debt obligations because it has higher debt equity ratio and lower interest coverage ratio than Firm A.

3 0
3 years ago
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