Answer:
Increase the allowance for doubtful accounts.
Explanation:
It would increase the allowance for doubtful accounts because, if you determine the necessary journal entries for reestablishment and to collect the account receivables, what we get is depicted below:
Reestablishment entry:
Account receivables = xx
Doubtful accounts allowance = xx
On the other hand, we get the record collection entry:
Record Collection Entry:
Cash = xx
Accounts receivable = xx
From the above, the net effect is simply an increase in current asset account; CASH, and a corresponding increase in the allowance for doubtful accounts.
Answer:
If management decides to eliminate this product line, the company’s net income will reduce by $22,000
Explanation:
<em>A product should be shut down if doing so would make the savings in fixed costs associated with the product to exceed the lost contribution. Other wise , the product should remain.</em>
<em>In a shut down decision , the following relevant cash flows should be considered:</em>
- <em>Lost contribution from the product to be shut down</em>
- <em>Savings in fixed directly attributable to the product under consideration.</em>
$
Lost contribution from shut down (100,000)
Savings in fixed cost (60% × 130,000) <u> 78,000</u>
Net loss from shut down <u> (22,000)</u>
Net loss from shut down = $(22,000)
If management decides to eliminate this product line, the company’s net income will reduce by $22,000
Answer:
c. Drill Down
Explanation:
Drill Down -
It is method of organising the data or information in the tabular , multidimensional and relational form , is referred to as drill down.
It is also known as data drilling .
The method is adapted in many fields to arrange the data in a convenient manner .
Hence , from the given scenario of the question ,
Jerry is using Drill Down .
Answer:
Explanation:
At $0.86
$0.86<$0.89
The buyer of the call option will not exercise the option. Net profit will be equal to the premium paid per unit = $0.02/unit.
At $0.87
$0.87<$0.89
The buyer of the call option will still not exercise the option. Therefore, net profit will be equal to the premium paid per unit = $0.02 unit. So net profit = $0.02/unit
At $0.88
$0.88<$0.89
The buyer of the call option will still not exercise the option. Net profit will be equal to the premium paid per unit = $0.02 unit. So net profit = $0.02/unit
At $0.89
$0.89=$0.89
The buyer of the call option will still not exercise the option. Net profit will be equal to the premium paid per unit = $0.02/unit.
At $0.91
The buyer will exercise the option and the net loss to Bulldog Inc will be 0.02/unit ($0.91-$0.89)
So there is no profit and no loss because this is offset by the call premium
Profit = -0.02 (loss on exercise) + 0.02 (call premium) = $0/unit
At $0.92
The buyer will exercise the option. The net loss to Bulldog Inc will be $0.03/unit ($0.92-$0.89)
Loss= -0.03 (loss on exercise) + 0.02 (call premium) = -$0.01/unit
Answer:
The production possibilities curve would have shifted inwards.
Explanation:
A production possibility curve shows the maximum possible bundles of two goods that can be produced in an economy in a given period. A reduction in the availability of resources causes this curve to shift to the left.
The outbreak of bubonic plague in the 14th century caused the European population to decrease by 30-60%. A decrease in the population implies a decrease in the labor force. This means that the economies will be able to produce less than earlier.
This will cause the production possibilities curve to shift inwards to the left.
