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Leokris [45]
2 years ago
13

The following information pertains to Lightning Inc., at the end of December: Credit Sales $ 20,000 Accounts Payable 10,000 Acco

unts Receivable 11,800 Allowance for Uncollectible Accounts 400 credit Cash Sales 20,000 Lightning uses the aging method and estimates it will not collect 7% of accounts receivable not yet due, 20% of receivables up to 30 days past due, and 46% of receivables greater than 30 days past due. The accounts receivable balance of $11,800 consists of $7,500 not yet due, $2,300 up to 30 days past due, and $2,000 greater than 30 days past due. What is the appropriate amount of Bad Debt Expense
Business
1 answer:
timama [110]2 years ago
3 0

Answer:

The appropriate amount of Bad Debt Expense is $3,345.20.

Explanation:

The appropriate amount of Bad Debt Expense can be calculated as follows:

Bad debt expense = (Percentage of accounts receivable not yet due it will not collect * Accounts receivable not yet due) + (Percentage of receivables up to 30 days past due it will not collect * Amount of receivables up to 30 days past due) + (Parentage of receivables of receivables greater than 30 days past due it will not collect * Amount of receivables greater than 30 days past due) - Allowance for Uncollectible Accounts (credit) ……………………… (1)

Substituting the relevant values into equation (1), we have:

Bad debt expense = (7% * $7,500) + (20% + $2,300) + (46% * $2,000) - $400 = $3,345.20

Therefore, the appropriate amount of Bad Debt Expense is $3,345.20.

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Praxis Corp. forecasts the following income statement for the next year:
Annette [7]

Answer: a. 1.42

b) 2.74

c) 3.89

Explanation:

a) The Degree of Operating Leverage measures how much operating Income will change by if Sales change.

It is calculated with the formula,

= (Sales - Variable Costs) / (Sales - Variable Costs - fixed costs)

= (960,000 - 532,000) / (960,000 - 532,000 - 127,000)

= 1.42

b) The Degree of financial leverage measures how much Income will change due to a change in operating Income.

The formula is,

=Earnings before Interest and tax / Earnings before Interest and tax - Interest or just Earning before tax

= 301,000/110,000

= 2.74

c. Degree of Total Leverage is a measure of how sensitive the net income of a company is to a change in goods produced and/or sold.

It is calculated by multiplying DOL and DFL.

= 1.42 * 2.74

= 3.89

Should you need any clarification just hit that comment button. Cheers.

3 0
3 years ago
Q.2Tullahoma Company purchased equipment for $27,500. It depreciated the equipment over a fiveyear life by the double-declining-
melisa1 [442]

Answer:

A loss of $1400

Explanation:

The double-declining method uses twice the straight-line depreciation method rate in calculating the depreciation amount.

The asset has a useful life of 5 years. The straight-line depreciation rate = 1/5 x 100

=20%.

The double-declining rate will be 40%

The depreciation schedule for two years will be as follows.

Open. Bal Dep. rate Dep. Amount  Book value

$27,500  40%  $11,000   $16,500.00

$16,500  40%  $6,600             $9,900.00

The equipment was sold for $8,500

net gain or loss will be the selling price - book value

=$8,500 - $9,900

=- $1,400

A loss of $1400

8 0
3 years ago
What type of tax system does the United States use?<br> ​
Basile [38]

Answer: Progressive tax system

Explanation: The progressive tax system is where the income of an individual is taxable based on his or her capacity to pay. The individuals who earn less pay lesser tax as compared to higher-earning individuals.

The tax system doesn’t impose a burden on those who don’t have a sufficient amount to pay as taxes. By doing this the people who earn low income will be able to maintain a high living standard and the people who earn more are able to afford the basic necessities. So it balances the economy.

8 0
3 years ago
The Morris Corporation has $300,000 of debt outstanding, and it pays an interest rate of 8% annually. Morris's annual sales are
Ad libitum [116K]

Answer: 1.41

Explanation:

Given that,

Debt outstanding = $300,000

interest rate = 8% annually

annual sales = $1.5 million

average tax rate = 40%

net profit margin on sales = 4%

interest amount = 300,000 × 0.08

                          = $24,000

net profit = 4% of 1.5 million

                = $6,000

Profit before tax = \frac{6,000}{0.60}

                           = $10,000

earning before interest and tax = profit before tax + interest

                                                    = $10,000 + $24,000

                                                    = $34,000

TIE ratio = \frac{EBIT}{Interest}

              = \frac{34,000}{24,000}

              = 1.41

8 0
3 years ago
3. What fallacy is illustrated by the following statement? "This work is driving me crazy!"
disa [49]
<h3>Statement by Fallacy</h3>

"This work is driving me crazy!"

The above sentence is said by Fallacy a worker of a cafe in a busy shopping mall, She tries her best to serve the customers but the customers are quite rude and that is the reason why she said such a dialogue.

<h3>Customer Behaviour</h3>

Fallacy wants the customers to act kindly and be a little patient, but that is completely the opposite of what is reality.

She is unable to leave the job as it is a well paid job and she is not able to find another job that can pay her this much salary.

Learn more about Business at brainly.com/question/26675384

3 0
2 years ago
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