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luda_lava [24]
3 years ago
15

Wellington Corp. has outstanding accounts receivable at year end totaling $6,500,000 and had sales on credit during the year of

$22,000,000. There is also a positive balance of $12,000 in the allowance for doubtful accounts. If the company estimates that 8% of its outstanding receivables will be uncollectible, and the company uses the percent of receivables method, what will be the amount of bad debt expense recognized for the year
Business
1 answer:
LuckyWell [14K]3 years ago
8 0

Answer: $520,000

Explanation:

A bad debt expense occurs when an economic entity which could be an individual or firm cannot collect a receivable because the said customer can't meet their obligations anymore.

The amount of bad debt expense recognized for the year will be the outstanding accounts receivable at year end multiplied by the percentage of uncollectible outstanding receivables. This will be:

= 8% × $6,500,000

= 8/100 × $6,500,000

= 0.08 × $6,500,000

= $520,000

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Answer:

frictional unemployment created by sectoral shifts.

Explanation:

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3 years ago
Two methods can be used to construct a statement of cash flows: the direct method and the indirect method. Under the indirect me
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Answer:

A. two balance sheets and B. income statement

Explanation:

There are three types of activities in the cash flow statement which are described below:  

1. Operating activities: It includes those transactions which affect the working capital after net income. The increase in current assets and a decrease in current liabilities would be deducted whereas the decrease in current assets and an increase in current liabilities would be added.  

These changes in working capital would be adjusted. Moreover, the depreciation expense is added to the net income and the loss on sale of assets is added whereas the gain on sale of assets is deducted  

2. Investing activities: It records those activities which include purchase and sale of the long term assets. The purchase is an outflow of cash whereas sale is an inflow of cash

3. Financing activities: It records those activities which affect the long term liability and shareholder equity balance. The issue of shares is an inflow of cash whereas redemption and dividend is an outflow of cash.

5 0
3 years ago
Husker corporation reports current e&p of negative $200,000 in 20x3 and accumulated e&p at the beginning of the year of
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Distribution is treated as a deductable to the shareholders of 1:10 to each dollar amount.
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4 years ago
40 points fast easy question. ………….
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3 0
2 years ago
Company X purchased Company Y using financing as follows: $18 million from mortgages, $3 million from retained earnings, $13 mil
ASHA 777 [7]

Answer:

The debt to equity mix = 74.65% - 25.35%

Explanation:

The computation of the debt to equity mix is shown below:

Debt is

= Mortgages + Bond

= $18 + $35

= $53 million

And, the Equity is

= Retained earnings + Cash in hand

= $5 + $13

= $18 million

Now

Percentage of debt financing

= $53 ÷  ($53 + $18)

= 74.65%

And, percentage of equity financing is

= $18 ÷ ($53 + $18)

= 25.35%

And, finally

The debt to equity mix = 74.65% - 25.35%

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3 years ago
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