Using balance sheet information, the debt ratio indicates your ability to meet current debt payments. When you are trying to balance your debt payments, the ability to pay your debts and the debt you are gaining reflects your ability to optain loans and other necessary requiremends for business or living expenses.
Answer:
The amount of uncollectible accounts expense that will be recognized on the Year 1 income statement is $1,620.
Explanation:
To arrive at the amount of uncollectible accounts expense that will be recognized on the Year 1 income statement, we simply need to calculate 3% of the company's sales on account balance, as follows:
3% of ($190,000 - $136,000) = $1,620
So, $1,620 would be the bad debt expense that will be recorded in Year 1 income statement, since there is no opening balance of sales on account and allowance for doubtful accounts.
Also, note that the collection on account during the year would reduce the sales on account balance, as shown above.
Answer: Option C
Explanation: Internal rate of return is used less in common business world as the most popular measure is the net present value which shows how much profit will a company make by choosing to do a project.
IRR produce different results for unconventional cash flows and NPV is used for evaluating mutually exclusive projects. IRR shows the rate of return from the investment but is vague as the overall result is shown by the net present value.
