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lilavasa [31]
3 years ago
10

Historical Art is a new business. During its first year of operations, credit sales were $50,000 and collections from credit sal

es were $34,000. One account for $500 was written off. Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible. What is the balance of accounts receivable at the end of the first year?
Business
1 answer:
Igoryamba3 years ago
5 0

Answer: $1000

Explanation:

First, we calculate the amount if bad debt expense which will be:

= 3% × $50000

= $1500

Therefore, the balance of accounts receivable at the end of the first year will be:

= Amount of bad debts expense - Account written off

= $1500 - $500

= $1000

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MedPlus Incorporated, based in the United States, hesitates to enter into a joint venture with Azpak Limited, a Sri Lankan compa
Grace [21]

Answer:

Legal Risk

Explanation:

Legal risk are damage, financial, reputational losses or any other form of loss received by a business due to negligence in compliance with the law related to the business. They are prospective fines or loses that a business or an organization receives for not complying with the business law and regulations.

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3 years ago
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The first home video game product built on a microprocessor was a home version of the popular coin-operated pong game from _____
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<span>The first home video game product built on a microprocessor was a home version of the popular coin-operated pong game from </span>Nolan Bushnell' Atari.
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4 0
3 years ago
The fair rate is 8%. What is 100 per year, forever, worth now?
777dan777 [17]

Answer:

1. $1,250

2. $855.95

3. $3,333.33

4. $92.59

5. $46.32

6. $671.01

Explanation:

1.

$100 per year forever

Constant Cash flow every year forever is actually a perpetuity its present value is

PV of Perpetuity = Cash flow / rate of return

PV of $100 Perpetuity = $100 / 0.08 = $1,250

2.

$100 per year for 15 years

Constant Cash flow every year for specific time period is actually a Annuity  its present value is

PV of annuity = P + P [ ( 1 - ( 1 + r )^-n ) / r ] = $100 + $100 [ ( 1 - ( 1 + 0.08 )^-15 ) / 0.08 ] = $855.95

3.

$100 per year grow at 5% forever

It is a growing perpetuity and its present value will be calculated as follow

Present value of growing perpetuity = Cash flow / Rate of return - growth rate

Present value of growing perpetuity = $100 / 0.08 - 0.05 = $3,333.33

4.

$100 once at the end of this year

Present value = P ( 1 + r)^-n = $100 ( 1 + 0.08 )^-1 = $92.59

5.

$100 once after 10 years

Present value = P ( 1 + r)^-n = $100 ( 1 + 0.08 )^-10 = $46.32

6.

$100 each year for 10 years @ 8%

PV of annuity = P + P [ ( 1 - ( 1 + r )^-n ) / r ] = $100 + $100 [ ( 1 - ( 1 + 0.08 )^-10 ) / 0.08 ] = $671.01

5 0
3 years ago
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Companies using target costing ________. start with an ideal selling price and then target costs that will ensure that the price
Anika [276]
<span>Companies using target costing start with an ideal selling price and then target costs that will ensure that the price is met.

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8 0
2 years ago
Calculating Average Operating Assets, Margin, Turnover, and Return on InvestmentEast Mullett Manufacturing earned operating inco
gladu [14]

Answer:

1. $425,000

2. 10.78%

3. 1.25

4. 13.5%

Explanation:

The computations are shown below:

1. For Average Operating Assets

Average operating assets = (Beginning Operating Assets + Ending Operating Assets) ÷ 2

= ($390,000 + $460,000) ÷ 2

= $425,000

2. For margin

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3. For turnover:

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               = $531,250 ÷ $425,000

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4. For Return on investment:

Return on investment  = Operating Income ÷ Average Operating Assets

                                       = $57,250 ÷ $425,000

                                       = 13.5%

6 0
3 years ago
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