If you choose a Roth IRA, how much income will you pay taxes on?

Exercise 7-9 Percent of receivables method LO P3 a. Estimate the balance of the Allowance for Doubtful Accounts assuming the com

igor_vitrenko [27]

Question Completion:

Assume that the Accounts Receivable balance is $570,000.

Answer:

a. The balance of the Allowance for Doubtful Accounts = $34,200.

b. Adjusting Entry to record Bad Debts Expense:

Debit Bad Debts Expense $21,900

Credit Allowance for Doubtful Accounts $21,900

To record bad debts expense and bring the balance of the Allowance for Doubtful Accounts to a credit balance of $34,200 ($21,900 +$12,300).

c. Adjusting Entry to record Bad Debts Expense:

Debit Bad Debts Expense $35,500

Credit Allowance for Doubtful Accounts $35,500

To record bad debts expense and bring the balance of the Allowance for Doubtful Accounts to a credit balance of $34,200 ($35,500 - $1,300).

Explanation:

a) Data and Calculations:

Accounts receivable balance = $570,000

Allowance for Doubtful Accounts = $34,200 ($570,000 * 6%)

Unadjusted balance in the Allowance for Doubtful Accounts = $12,300 credit

Bad Debts Expense = $21,900 ($34,200 - $12,300)

Unadjusted balance in the Allowance for Doubtful Accounts = $1,200 debit

Bad Debts Expense = $35,500 ($34,200 + $1,300)

3 0

2 years ago

___________ Involves decisions that result in brand-new markets, products, and often new businesses by acquiring new assets to d

bazaltina [42]

Answer:

Adjacent innovation

Explanation:

There are three ways to innovate in business:

1. Transformational

This is the most commonly thought of innovation. It has the potential to completely transform, create or eliminate entire industries. It involves one-in-a-million ideas that change the way the entire world lives and works.

This innovation is often seen as a means of disruption or a radical solution using breakthrough technology to achieve an unimaginable shift for markets that don’t exist yet.

2. Incremental

Incremental Innovation refers to the optimization of existing products for existing markets – ie. do what you’re doing but better: solving the current problems of your current clients, more effectively, sustainably and continuously.

It involves making smaller upgrades to existing products or services. The goal is to improve on existing products or services and renew interest in the marketplace.

3. Adjacent

Where Incremental innovation is all about improving existing products for existing markets, there are often opportunities to leverage an existing product, process, or infrastructure to reach new markets.

Simply put, adjacent innovation includes taking existing products into new markets and digital channels, or creating new digital products for existing markets. ie. Adjacent innovation involves entering a new market and connecting with a new audience by leveraging something the company already does well.

8 0

3 years ago

Simon Company's year-end balance sheets follow. Current Yr 1 Yr Ago 2 Yrs Ago At December 31 Assets Cash Accounts receivable, ne

weqwewe [10]

Answer:

1a. Current ratio = Current assets / Current Liabilities

Current year = $224,517 / $120168 = 1.88 : 1

1 years ago = $175,652 / $70,310 = 2.50 : 1

2 years ago =$134,088 / $44,840 = 2.99 : 1

1b. The Current ratio worse over three years period

2a. Acid test ratio = (Cash + Investment + Account Receivables) / Current liabilities

Current year = ($29,328 + $0 + $83,351) / $120,168 = 0.94 : 1

1 year ago = ($32,285 + $0 + $57,663) / $70,310 = 1.28 : 1

2 year ago = ($34,323 + $0 + $45,764) / $44,840 = 1.79 : 1

2b. The Acid test ratio are worse over three years period

8 0

3 years ago

On January 1, 2021, Red Flash Photography had the following balances: Cash, $19,000; Supplies, $8,700; Land, $67,000; Deferred R

ira [324]

Answer:

Red Flash Photography

Balance Sheet as at January 1, 2018,

Assets

Cash,............... $26,000

Supplies,........... $9,400

Land, ........ .......$74,000

Total..................109, 400

Capital and Liabilities

Deferred Revenue... $6,400

Common Stock..... ..$64,000

Retained Earnings...$39,000.

Total............................109,400

Red Flash Photography

Balance Sheet as at 31st December 2018

Revised Balance Sheet on 31st December 2018

Assets

Cash..........................................42,600

Account Receivable............ 44,000

Supplies....................................15,800

Land..........................................74,000

Prepaid Rent............................19,500

Total........................................... 195,900

Capital & Liabilities

Common Stock ......................98,000

Retained Earnings.................56,500

Accrued Wages........................5,400

Accounts Payable...................36,000

Total........................................... 195,900

Explanation:

1. February 15 Issue additional shares of common stock, $34,000.

ADD 34,000 TO EQUITY, AND TO CASH

2. May 20 Provide services to customers for cash, $49,000, and on account, $44,000.

LESS 49,000 FROM CASH AND ADD TO RETAINED EARNINGS AS INCOME, ADD 44,000 AS ACCOUNT RECEIVABLES AND ADD TO INCOME IN RETAINED EARNINGS

3. August 31 Pay salaries to employees for work in 2018, $37,000.

LESS 37,000 FROM CASH AND FROM RETAINED EARNINGS

4. October 1 Purchase rental space for one year, $26,000.

LESS FROM CASH AND FROM RETAINED EARNINGS

5. November 17 Purchase supplies on account, $36,000.

ADD TO STOCK, ADD TO ACCOUNTS PAYABLES

6. December 30 Pay dividends, $3,400.

LESS FROM CASH AND FROM RETAINED EARNINGS

The following information is available on December 31, 2018:

1. Employees are owed an additional $5,400 in salaries.

ADD TO ACCRUED SALARIES,LESS FROM RETAINED EARNINGS AS EXPENSES INCURRED IN THE PERIOD

2. Three months of the rental space has expired.

CREATE PREPAID RENT FOR 3/4 OF RENT (19,500) AND LESS 6500 FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD

3. Supplies of $6,400 remain on hand.

LESS 19600 (26,000-6400) FROM SUPPLIES AND FROM RETAINED EARNINGS AS EXPENSE FOR THE PERIOD

4. All of the services associated with the beginning deferred revenue have been performed.

DELETE DEFERRED REVENUE OF 6,400 AND ADD SAME AMOUNT TO RETAINED EARNINGS AS INCOME EARNED

7 0

3 years ago

Consider two scenarios for a nation's economic growth. Scenario A has real GDP growing at an average annual rate of 2%; scenario

const2013 [10]

Answer: b. 36 years under scenario A, versus 18 years under scenario B.

Explanation:

The Rule of 72 is a rule in finance that will allows for the calculation of how long it will take for an investment to double given its interest rate.

The time is calculated by dividing 72 by the interest rate in question.

Scenario A

= 72/2

= 36 years.

Scenario B

= 72/4

= 18 years.

6 0

2 years ago