Answer:
Scarlet Knight Corporation
Correct postings:
Accounts Debit Credit
1. Cash 12,500
Common Stock 12,500
2. Cash 3,500
Service Revenue 3,500
3. Supplies 250
Cash 250
4. Rent Expense 550
Cash 550
5. Equipment 1,950
Cash 1,950
Explanation:
a) Data and Calculations:
Accounts Debit Credit
1. Common Stock 12,500
Cash 12,500
2. Cash 3,500
Service Revenue 3,000
3. Supplies 250
Cash 250
4. Rent Expense 550
Cash 550
5. Cash 1,950
Equipment 1,950
b) The accounting rule is to debit the value receiver and to credit the value giver. Generally, assets, expenses, and losses normally have debit balances while liabilities, equities, incomes, and gains have credit balances.
Answer:
Early settlement Discount: It is offered to customer to encourage them to pay earlier than the payment date.
Bulk Discount: If the customer buys over a certain quantity, he will get a discount.
Answer: A trade war happens when one country retaliates against another by raising import tariffs or placing other restrictions on the other country's imports.
Explanation:
Answer:
A) Accounts receivable turnovers are 10.0 and 6.6 and the ratios of uncollectible accounts receivable to gross accounts receivable are 0.30 and 0.16, respectively. Examine allowance for possible understatement of the allowance.
Explanation:
accounts receivable turnover from the previous year = total sales previous year / average gross receivables previous year = $1,000,000 / $100,000 = 10
accounts receivable turnover from the current year = total sales current year / average gross receivables current year = $2,000,000 / $300,000 = 6.67
ratios of uncollectible accounts receivable to gross accounts receivable for previous year = $30,000 / $100,000 = 0.3
ratios of uncollectible accounts receivable to gross accounts receivable for current year = $50,000 / $300,000 = 0.167
Option A shows the correct amounts for the accounts receivable turnover and ratios of uncollectible accounts receivable to gross accounts receivable. Since the ratio of uncollectible accounts receivable decreased so much during the current year, the allowance for accounts receivables for the current should be double checked to see if it wasn't understated.
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