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Alex_Xolod [135]
2 years ago
12

The following information is from the records of Mountainview Camera​ Shop: Accounts​ receivable, December​ 31, 2018 ​$80,000 (d

ebit) Net credit sales for 2018 ​160,000 Accounts written off as uncollectible during 2018 ​16,000 Cash sales during 2018 ​42,000 The company uses the direct writeminusoff method for bad debts. What is the amount of bad debts​ expense?
Business
1 answer:
alexgriva [62]2 years ago
4 0

Answer:

The amount of bad debts​ expense is $16,000

Explanation:

Bad debt : The Bad debt is that amount in which the chances of payment receive is very less. Thus, the bad debt amount is deducted in the balance sheet under debtors account and also it is shown in Profit and loss Account in debit side.

Under direct write minus off method for bad debts, the bad debt amount is recognized irrespective of whatever information is given.

Since in the question, the non-collectible amount is given which is $16,000.

So, the amount of bad debts​ expense is $16,000

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$1,667.67

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So, $2,000 is worth \frac{100}{120}\times2,000 = $1,667.67 at the end of the year.

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Read 2 more answers
An author just signed a lucrative contract with a publisher that offers to pay her the amount of $500 at the end of year 9 when
solong [7]

Answer:

Ans. The annuity that will be equivalent to the publisher´s advance would be $26.40 per year, for 9 years at 7% interest rate.

Explanation:

Hi, first, let´s bring that $500 to be paid in 9 years to present value, we need to use the following formula.

PresentValue=\frac{FutureValue}{(1+r)^{n} }

Where: r is our discount rate (7%) and n the periods from now when she will receive that $500 amount. This should look like this.

PresentValue=\frac{500}{(1+0.07)^{9} } =271.97

Ok, so the equivalent amount of money today of those $500 in nine years is $271.97, but the author wants $100 today so the remaining amount has to be used to find the equal annual payments to be made in order to be equivalent to re remaining balance ($171.97). We now need to use the following equation.

Present Value=\frac{A((1+r)^{n}-1 )}{r(1+r)^{n} }

And we solve for "A" like this

171.97=\frac{A((1+0.07)^{9}-1 )}{0.07(1+0.07)^{9} }

171.97=\frac{A(0.838459212 )}{0.128692145}

171.97=A(6.515232249)

A=\frac{171.97}{6.515232249} = 26.40

Therefore, the equivalent amount of money of $500 in 9 years is $100 today and $26.40 every year, at the end of the year, for nine years.

Best of luck.

4 0
3 years ago
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