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BigorU [14]
3 years ago
9

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's una

djusted trial balance reported the following selected amounts: Accounts receivable $ 345,000 debit Allowance for uncollectible accounts 700 debit Net Sales 790,000 credit All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?
Business
1 answer:
ValentinkaMS [17]3 years ago
6 0

Answer: $5,440

Explanation:

When using the percent of sales method to determine bad debts, the company estimates a percentage that it believes will results in uncollectible debt and then applies it to the sales/revenue figure. The figure that is calculated is then debited along with the debit balance on the Allowance for doubtful accounts to the Bad debts account for the year and credited to the Allowance for doubtful accounts.

This company estimates that they will have 0.6% of credit sales uncollectible.

There are also $790,000 in sales of which all are on credit.

The Uncollectible estimate is therefore,

= 790,000 * 0.6%

= $4,740

This figure is then added to the debit amount on the Allowance for Uncollectible Accounts.

= 4,470 + 700

= $5,440

Note; A debit balance on the Allowance for doubtful debt account signifies that the bad debts were higher than anticipated the last time. This is why the figure is added to the current bad debts expense.

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Marshall Company purchases a machine for $840,000. The machine has an estimated residual value of $40,000. The company expects t
natka813 [3]

If the units-of-production method is used, the depreciation expense for this period is: <u>$136,000</u>

<u>Explanation</u>:

<em><u>Given</u></em>:

Cost of machine= $840,000

Estimated residual value= $40,000

No of units produced during current period= 680,000 units

Expected production by the machine= 4 million units

Unit of production method= cost of asset-salvage value/useful life in the form of units produced

Depreciation per unit= (cost - residual value)/estimated life in units

                                     = (840,000-40,000)/4,000,000

Depreciation per unit= 0.2 per unit

To calculate depreciation for period,

Depreciation for period= depreciation per unit*actual units produced in this period

                                         = .2*680,000

Depreciation for period= $136,000

3 0
3 years ago
What nonprofit organization distributes knowledge related to health care for the purpose of improving health to governmental age
Fed [463]

Options:

a. Institute for Safe Medication Practices.

b. Institute of Medicine.

c. National Committee for Quality Assurance.

d.The Joint Commission.

Answer:

b. Institute of Medicine.

Explanation:

Interestingly, according to information found on its website, the The Institute of Medicine (IOM) is an independent, nonprofit organization that provides advice to decision makers and the public, which includes distributes information related to health care for the purpose of improving health to governmental agencies, the public, business, and healthcare professionals.

5 0
3 years ago
If firms and households form their expectations about inflation by looking at past inflation, this form of expectations formatio
eduard

Answer:

B) adaptive

Explanation:

Based on the scenario being described it can be said that this form of expectations formation is known as adaptive expectations. These are expectations formed from a process in which individuals predict what will most likely occur in the future based on the data of what has already happened in the past.

6 0
3 years ago
A vital component of marketing is ______, which involves letting customers know the benefits of the product/service, where you c
Sindrei [870]

The vital component of marketing is promotion.

Promotion in marketing refers to any sort of marketing communication that is used to enlighten target audiences about the relative qualities of a product, service, brand, or problem, and is usually persuasive in nature. It assists marketers in creating a distinct space in the minds of their customers, which can be either cognitive or emotional.

Marketing relies heavily on promotion. Marketing promotion is described as a method of communication between buyer and seller in which the buyer persuades his or her audience to purchase his or her items.

Advertising, sales promotion, public relations, and direct marketing are the four primary promotional strategies.

Hence, the blank will be filled by promotion.

To know more about promotion click here:

brainly.com/question/26312542

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5 0
2 years ago
Tom elects the Life Income with 10-year Period Certain settlement option. Tom dies in year 6. The beneficiary receives payments
Sonbull [250]

Answer:

B. 4 years

Explanation:

As per the certain life income period, the guaranteed payments for the recipient lifetime or the specified time duration whichever is more.

Now if the recipient dies before the certain period ended, so the payments would be continued to the other beneficiary unless there is an end for the certain period

So, in the given situation, the payments would be received for

= 10 years - 6 years

= 4 years

Hence, the correct option is B. 4 years

6 0
3 years ago
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