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Elenna [48]
3 years ago
8

M Company uses the percentage of sales method to account for its uncollectible accounts. On December 31, 2018, M has $1,800,000

in sales and 60% of these sales were in cash. M has a $2,000 credit balance in its allowance for doubtful account. Past experience suggested that 0.5% of credit sales are uncollectible. Requirements [You must show your work/steps of how you arrive at your answers] Question 1: What is the amount that M should report as its estimated bad debt expenses for year 2018
Business
1 answer:
Hitman42 [59]3 years ago
3 0

Answer:

See below

Explanation:

Estimated uncollectible based on past experience

= [($1,800,000 × 60%) × 0.5%]

= $1,080,000 × 0.5%

= $5,400

Credit balance in allowance for doubtful account = $2,000

Therefore, the total amount M should report as its estimated bad debts expense for the year 2018

= $5,400 - $2,000

= $3,400

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I don't understand the question. Maybe elaborate more.

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7 0
3 years ago
What company strategy correlates to returning the highest profit margins and return on assets?
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His three examples of these corporate strategies are applicable at certain times in the life of a company. Grow: Expand your business and increase your profits. Stability: To maintain continuous business operations. Renewal: To revive a declining business.

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3 0
1 year ago
Gracie, inc. made a prepaid rent payment of $2,800 on january 1. the company's monthly rent is $700. the amount of prepaid rent
Dominik [7]
<span>Out of the prepaid rent of $2800, $700, the actual rent for the month of January, has to be debited to rent account and prepaid rent account will be credited. Now the prepaid rent account will show a smaller figure(2800-700 = 2100) This is the amount that will be shown in the prepaid rent account in the balance sheet. Of course it will be shown as an asset since it has a debit balance.</span>
7 0
3 years ago
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