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3 years ago

At December 31, Hawke Company reports the following results for its calendar year.

Business

1 answer:

kodGreya [7K]3 years ago

3 0

The adjusting entries for acknowledging the bad debts would be:

a). Bad Debts Expense $50 640

Allowance for Doubtful Accounts $50 640

b). Bad Debts Expense $48089.1

Allowance for Doubtful Accounts $48089.1

Bad debts:

Bad debts are described as debts that are unable to be recovered from their respective debtors.

The key reasons for this could be:

The debtor is bankrupt and cannot pay the amount.
The debtor flees away and thus, can't be compelled to pay.

The given amounts are obtained as follows:

a). Given that,

Bad debts is 1.5% of credit sales.

Credit Sales = $3,376,000

Bad debts = 1.5% of $3,376,000

∵ Bad debts = 1.5/100 * $3,376,000

= $50 640

b). Given that,

Bad debts = 1 % of total sales.

Total Sales = Credit sale + Cash sale

= $3,376,000 + $1,432,910

= $4808910

Bad debts = 1% of 4808910

∵ Bad debts = 1/100 * $4808910

= $48089.1

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Suppose that borrowing is restricted so that the zero-beta version of the CAPM holds. The expected return on the market portfoli

Delvig [45]

Answer:

10.5%

Explanation:

In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below

Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)

where,

Risk free rate of return = 7%

Market rate of return = 14%

And, the beta is 0.5

So the expected return is

= 7% + 0.5 × (14% - 7%)

= 7% + 0.5 × 7%

= 7% + 3.5%

= 10.5%

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3 years ago

The systematic risk principle states that the expected return on a risky asset depends only on the asset’s ___ risk.

Ahat [919]

The systematic risk principle states that the expected return on a risky asset depends only on the asset’s market risk.

<h3>What are systematic risk principles?</h3>

According to the systemic risk concept, the expected return on an asset is solely determined by its systematic risk. As a result, regardless of how much overall risk an asset carries, just the systematic part is significant in estimating the expected return (including risk premium) on such asset.

Market risk is a kind of systematic risk that affects the entire market. Because it cannot be diversified and distributed, the investor is compensated for it.

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2 years ago

The 2018 income statement of Adrian Express reports sales of $20,510,000, cost of goods sold of $12,550,000, and net income of $

In-s [12.5K]

Answer:

1. Gross profit ratio= Gross Profit/ Sales *100

-Sales $ 20510,000

-Gross Profit = Sales - Cost of Goods Sold =20,510,000 - 12,550,000 = 7,960,000

Gross Profit Ratio= 7,960,000 / 20,510,000 * 100

= 38.81%

2.Return on Assets= Net income after tax / Average Total assets

Where Average Total assets= (9,800,000+8,160,000) / 2= 8,980,000

Where Net income after tax= 1,940,000

Return on Assets = 1,940,000 / 8,980,000 * 100 = 21.60%

3.Profit Margin= Net income/ Sales *100

=1,940,000 /20,510,000 *100

= 9.46%

4. Total Assets turnover= Sales / Average assets

=20,510,000 / 8,980,000

=2.28 times

5 Return on Equity: Net income after tax/ Average stockholder's equity

Where Average Stockholder's equity: (2,050,000 +3,190,000 + 1990000 + 1766000) / 2 = $4498,000

Return on Equity: 1940000/4498,000 *100

= 43.13%

7 0

3 years ago

DS Unlimited has the following transactions during August.

m_a_m_a [10]

Answer:

See the journal entries below.

Explanation:

The journal entry will look as follows:

Date Account and explanation Debit ($) Credit ($)

Aug 6 Inventory (50 * $100) 5,000

Account payable 5,000

(To record inventory purchased on account.)

Aug 7 Inventory 300

Cash 300

(To record payment of freight charges associated with the August 6 purchase.)

Aug 10 Account payable (5 * $100) 500

Inventory 500

(To record the returns of defective five game devices to GameGirl.)

Aug 14 Account payable (w.1) 4,500

Cash (balancing figure) 4,455

Inventory (w.2) 45

(To record the payment of the full amount due to GameGirl.)

Aug 23 Account receivable (30 * $120) 3,600

Sales revenue 3,600

Cost of goods sold 3,170

Inventory 3170

(To record the Sales and cost of 30 game devices purchased on August 6.)

Workings:

w.1. Account payable = Purchases on account on August 6 - Defective inventory returned on August 10 = $5,000 - $500 = $4,500

w.2. Inventory = Discount received on account payable for paying within 10 days = w.1 * 1% = $4,500 * 1% =$45

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3 years ago

Fusaro Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year.

andrew-mc [135]

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Fusaro Corporation uses a predetermined overhead rate base on machine-hours.

Estimated total fixed manufacturing overhead= $684,000

Estimated activity level= 40,000 machine-hours

Actual activity level 37,700 machine-hours

First, we need to calculate the predetermined overhead rate:

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Estimated manufacturing overhead rate= 684,000/40,000= $17.1 per machine hour

Now, we can allocate the manufacturing overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 17.1* 37,700= $644,670

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3 years ago