1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kogti [31]
2 years ago
7

Arundel Company uses percentage of sales to estimate uncollectibles. At the end of the fiscal year, December 31, 2018, Accounts

Receivable has a balance of $78,000 and had a total of $715,000 in credit sales. Arundel assumes that 1.0% of sales will eventually be uncollectible. before adjustment, the Allowance for Uncollectible Accounts had a credit balance of 6,500. What dollar amount should be credited to Allowance for Uncollectible Accounts at year end?
Business
1 answer:
KiRa [710]2 years ago
5 0

Answer:

Allowances account will be credited with $650

Explanation:

Businesses make allowances for uncollectible debts because there are some customers that will just not honor their agreement to pay. Unfortunately, business managers can't tell from the customers looks or profile which one will default. Hence as a risk managing measure, allowances are always made.

When allowances are made, you recognize the double entry principle: debit the Bad debt expense account and credit the Accounts receivable account.

If in the closing year we had a balance of x amount in our allowance Account, and this new year we require a total allowance of say x+1 amount (coming from our computation of % of credit sales or % of Receivables balance), we will only pass the difference between the opening balance and the new year requirement to the bad debt expense account.... See below:

Opening allowance balance x

Less Closing allowance balance x+1

= bad debt expense account 1

Note : the bad debt account could be a debit where the closing allowance balance is greater than its opening. And we will credit the same amount to the allowances account to make up the requirement.

Or a credit to the p&L account if the closing balance is less than the opening balance and we will debit the same amount to the allowance account to come to the required balance

To our question:

Opening balance in allowance account = $6,500

Less New years allowance requirement = 1% x $715,000 = $7,150

= bad debt (debit) = $650 and we will credit allowances account with $650

You might be interested in
ou have just read an explanation of the figures you studying as the total dollar value of final goods and services produced with
Shalnov [3]

Answer:

REAL GDP

Explanation:

GDP typically used as a variable to measure a nation's economic strength within a certain time period. But often time, the value of GDP is a little bit jaded. If the inflation is high, an increase in GDP doesn't really mean that the country become more productive.

This is why there are many experts prefers to use REAL GDP as a more accurate unit to measure the economic strength.

7 0
2 years ago
What is investing best for
Colt1911 [192]

Answer:

Investing is best for Stock Market, Investment Bonds, Mutual Funds, Savings Accounts, and Physical Commodities.

Explanation:

Stock Market has reference to the collection of markets and exchanges where regular activities that take place are buying, selling, and issuance of shares of publicly held companies. These financial activities are being coned by means of formal exchanges that are institutionalized or market places over-the-counter (OTC) operating under a set of defined regulations.  

Investment Bonds have reference to the life insurance policies wherein you are investing a lump sum in various available funds. There is a fixed term for some investment bonds, whereas others don’t have any set investment term. Upon encashment of your investments, the amount you get back is outright dependent on how better – or how worse – the investment has been done.  

Mutual funds refer to investments pooling your money altogether with other investors for the purchase of shares towards collecting stocks, bonds, or other securities, having reference to as a portfolio, that may have the probability of recreation on your own. A portfolio manager typically oversees Mutual funds. Variety of fees is linked with mutual funds. Some funds are available with transaction charges for purchases and sales or commissions known as loads.  

Savings Accounts imply deposit account that is interest-bearing held at a bank or other financial institution. Even if these accounts are paying a modest rate typically, their safety and reliability enable them to become a great choice for parking cash wanted by you that has availability for short-term needs. Savings accounts, though are having some limitations on the frequency of your funds withdrawal, generally they proffer flexibility quite exceptionally, ideal for the construction of emergency fund.  

Actual commodities undergoing delivery to the contracted buyer when a commodity contract is completed in the spot market or the futures market are known as Physical Commodities. Different from other financial assets, these commodities are having a physical component for hedging as well as valuation. Physical Commodities have broader classification into energy, metals, agricultural, and livestock with each that are characteristically unique. Even then, similar kinds of commodities are subject to the variability of degrees of quality.  

4 0
3 years ago
All of the following would be considered expenses EXCEPT:
ryzh [129]

Answer:

I belive its c.

Explanation:

It says interest EARNED on INVESTMENTS which would be a good thing not an expense.

If you invest in something you can get the money back

6 0
2 years ago
Read 2 more answers
If 60% of the population is female and 30% of females buy physical therapy services, and 70% of men buy physical therapy service
Maslowich

Answer:

Men.

Explanation:

Well, 70% of 40% (100% - 60%) = 28% total population demand.

30% of 60% = 18%

28% > 18%

5 0
2 years ago
- wuat is the result of a good business decision? (1 point)
Kobotan [32]

Answer:

It sacrifice short-term losses for long-term benefit.

Explanation:

As a result of you making a good business decision it allows you to absorb the short term losses in getting a better long time benefit that will last for decades of profit maximization that will cover times ten of your short term losses.

3 0
2 years ago
Other questions:
  • Johnson Production Company paid a dividend yesterday of $3.50 per share. The dividend is expected to grow at a constant rate of
    10·1 answer
  • You purchased 100 shares of IBM common stock on margin at $70 per share. Assume the initial margin is 50%, and the maintenance m
    13·1 answer
  • Crocker enterprises conducts thorough background investigations of its prospective employees. the purpose of such investigations
    12·1 answer
  • Value Electronics, Inc. started its operations on January 1, 2019.
    13·1 answer
  • You're a hardcore gamer, and you want to build the ultimate video game e-commerce site. You can think of a number of special fea
    9·1 answer
  • In the context of financial management information systems, transaction processing systems or enterprise systems capture transac
    14·1 answer
  • Waterway Inc. and Carla Vista Co. have an exchange with no commercial substance. The asset oiven up by Waterway Inc. has a book
    14·1 answer
  • Experience indicates that strategic alliances Multiple Choice have a high "divorce rate." are generally successful. work well in
    5·1 answer
  • When collective decision making is utilized to resolve economic questions regarding the allocation of resources,
    10·1 answer
  • gayla quickly arranged to sell riha's car to a denver public school official; the signature on the auto's title assignment appea
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!