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Lilit [14]
4 years ago
10

Net sales for the month are $800,000, and bad debts are expected to be 1.5% of net sales. The company uses the percentage-of-sal

es basis. If the Allowance for Doubtful Accounts has a credit balance of $15,000 before adjustment, what is the balance after adjustment
Business
2 answers:
Mama L [17]4 years ago
8 0

Answer:

The balance of the Allowance for Doubtful Accounts after adjustment is $27,000.  This represents 1.5% of $800,000 net sales (to be charged to bad debt expense for the month) plus the credit balance of $15,000.

Explanation:

An Allowance of Doubtful Accounts is established at the same period when sales take place since an entity is not certain of the amount it will eventually receive from its credit customers.  This allowance is an estimate for bad debts.

Using the percentage-of-sales basis, the company can provide in advance an educated guess of probable bad debts to be incurred using an established rate.

Dmitriy789 [7]4 years ago
4 0

Answer:

$27,000

Explanation:

Allowance for doubtful accounts before adjustment       $15,000

Allowance provided for the month;

$800,000*1.5%                                                                     $12,000

Closing balance for Doubtful Accounts                             $27,000

The allowance for doubtful accounts is provided on net sales basis therefore sales are multiplied with %  of bad debt allowance given in question.

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3 years ago
Tim, who works for Peachtree Realty, referred a buyer to a broker who works for Pinetop Realty. The referring agent is to receiv
IrinaK [193]

Answer:

$1,312.50

Explanation:

Calculation for How much was the referring agent paid

First step is to find the buyer agent amount by using the buyer's agent percentage to multiply the buyer purchased amount of the home

Using this formula

Buyer agent amount =Buyer's agent percentage× Home purchased amount

Let plug in the formula

Buyer agent amount=1.5%×$350,000

Buyer agent amount=$5,250

The last step is to find How much was the referring agent paid

Using this formula

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5 0
3 years ago
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7 0
3 years ago
Why should a cover letter be short (usually one page)?
melomori [17]

Answer:

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3 years ago
Piedmont Hotels is an all-equity company. Its stock has a beta of 1.23. The market risk premium is 6.9 percent and the risk-free
never [62]

Answer:

The required rate of return for the project will be 13.087%

Explanation:

To calculate the required rate of return for the project, we must first calculate the required rate of return for the firm's equity. The required rate of return can be calculated using the CAPM or Capital Asset Pricing Model equation. The formula for required rate of return (r) under this model is,

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Where,

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5 0
3 years ago
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