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yulyashka [42]
2 years ago
10

Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency

in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018's credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000.
Required:
Use the percentage of credit sales method to calculate the bad debt expense.
Business
1 answer:
kifflom [539]2 years ago
6 0

Answer:

$31,400

Explanation:

Ruby estimates that only 2% of its 2019 credit sales will be written off

Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts

Ruby Red has credit sales of $1,570,000.

Bad debt expense = Credit sales *  2% of its 2019 credit sales

Bad debt expense = $1,570,000 * 2/100

Bad debt expense = $1,570,000 * 0.02

Bad debt expense = $31,400

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2 years ago
RT is about to loan his granddaughter Cynthia $10,000 for 1 year. RT’s TVOM, based upon his current investment earnings, is 12%,
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Answer:

They should not be able to successfully negotiate the terms of this loan within these parameters.

Explanation:

It has been provided that RT earns 12% on his current investments and would not like to receive an interest rate of less than 12% on the loan he gives.

if RT gives a loan of $10,000 for one year, he would charge an interest rate of minimum 12%.  

Interest = $10,000*0.12

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Therefore, They should not be able to successfully negotiate the terms of this loan within these parameters.

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Answer:

"The rigidity of rules and regulations " is the appropriate response.

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