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Fed [463]
3 years ago
15

M Company has the following information available before recording the adjustment at the end of the year: Accounts Receivable $8

00,000 Allowance for doubtful accounts per books before adjustment $50,000 credit Bad Debt Expense calculated using percentage of receivables method $15,000 The cash (net) realizable value of the accounts receivable at the end of the year after adjustment is Select one: a. None of the above b. $735,000 c. $685,000 d. $750,000 e. $800,000
Business
1 answer:
iren [92.7K]3 years ago
7 0

Answer:

b. $735,000

Explanation:

Bad debt Expense will be calculated using the percentage of debt loss. The expense will be calculated using the account receivable balance.

Allowance for Doubtful Accounts balance before adjustment = $50,000 Credit

Bad Debt expense based on percentage of receivables = $15,000

This adjustment will added to the balance of $50,000 to make Allowance for Doubtful Accounts ending balance equals to $65,000 ( $50,000 + $15,000 ).

Net realizable value of account receivable is the net value of Allowance for Doubtful Accounts and Account receivable.

Net Realizable value of the accounts receivable = $800,000 - $65,000 = $735,000

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Caddie Manufacturing has a target debt-equity ratio of .35. Its cost of equity is 12 percent, and its pretax cost of debt is 6 p
frutty [35]

Answer:

10.12%

Explanation:

The computation of the WACC is shown below:

= Cost of debt × (1 - tax rate) × weight of debt + cost of equity × weight of equity

= 6% × (1 - 0.21) × 0.35 ÷ 1.35 + 12% × 1 ÷ 1.35

= 1.23% + 8.89%

= 10.12%

We simply multiplied the capital structure with each of its weight so that the WACC could come and the same is to be considered

7 0
3 years ago
d)The owner of a cemetery plans to offer a perpetual care service for grave sites. The owner estimates that it will cost $150 pe
Nana76 [90]

Answer:

The one time fee that the owner should charge is $1764.71

Explanation:

To calculate the one time fee, we take this as a perpetuity and calculate the value or price of the perpetuity based on the fututre cash flows discounted to today's price by a certain dicount rate.

The discount rate is taken as 8.5% which is also the market interests rate.

The formula for the value/price of the perpetuity is,

Value / Price = Cash flow / Discount rate

Value / Price = 150 / 0.085

Value / Price = $1764.705 rounded off to $1764.71

4 0
3 years ago
n May 1, 2009 Giltus Advertising Company received $1,500 from Julie Bee for advertising services to be completed April 30, 2010.
Alenkinab [10]

Answer:

c. A credit to Earned Fees for $1,000.

Explanation:

As for the information provided, we know

Unearned income is an income account, and therefore, will be credited at the time of recording.

Further, it is told that as on 31 December, 2009 out of the total unearned income of $1,500, $1,000 is earned.

Since it is earned it has to be accounted in current year, for this earned income will be credited and unearned income will be reversed for the amount of earned income that is for $1,000.

8 0
3 years ago
Coronado Industries had the following accounts and balances:
AysviL [449]

Answer:

15250

Explanation:

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7 0
2 years ago
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Identify the obstacles that are most relevant for a person trying to become a Geographer. Check all that apply.
Elden [556K]

Answer:

the answer 1235 credits to the guy that commented

Explanation:

5 0
3 years ago
Read 2 more answers
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