The direct write off does not report about the bad debt and does not use the allowance where as the allowance method uses the allowance for doubtful accounts because it provides an estimate for the same.
<u>Explanation:</u>
The allowance method speaks to the accumulation and accrual basis of bookkeeping and is the acknowledged technique to record uncollectible records for monetary bookkeeping purposes. The direct write off method is utilized just when we choose a client won't pay.
The allowance method utilizes the stipend for doubtful records to catch amassed assessments of awful obligations. The direct write-off method does not report bad debt estimates; therefore, it does not use the allowance for doubtful accounts when reporting bad debts.
Is there answer choices if not
I think it is Design.
Answer:
A. $190,000
Explanation:
The breakdown analysis of Balance Sheet and Income Statement in terms of Cash in the form of Operating, Investing and Financing activities is known as Cash Flow Statement or the Statement of Cash Flows.
In Investing Activities Cash Flow we simply add Cash Proceeds from the sale of assets and subtract any proceeds from the purchases. The difference between the two is called Cash Flow from investing activities and it how much cash surplus or deficit we have from Investing Activities of Cash.
In the Statement of Cash Flows calculating Net Cash provided by investing activities is simple. Simply add Sale of Land, Sale of Equipment and Issuance of Common Stock. Subtract Purchase of Equipment from it and you will get the Net Cash Flow from Investing Activities.
Payment of Cash Dividend is the Financing Activities item so will not be taken into consideration in Investing Activities Cash flow as follows:
(+) Sale of Land $100,000
(+) Sale of Equipment $50,000
(+) Issuance of Common Stock 70,000
(-) Purchase of Equipment $30,000
NET CASH FLOW from INVESTING ACTIVITIES $190,000
Answer: c. Ten years, because maintenance costs don't increase.
Explanation:
With the maintenance costs constant at $24,000 a year, the machine is still expected to go 10 years before it's x-ray source is depleted and it has to be scrapped.
This means that the useful life is therefore 10 years because the maintenance cost will not increase but will still keep the machine going for 10 years.
Answer:
The present value of this cash flow will be decreased following the increase in the interest rate.
Explanation:
We have the formula for calculating present value is:
PV = FV / ( 1+r)^n
where:
PV is the present value
FV is the future value which is $10,000 in the described question
r is the discount rate which is the interest rate
n is the number of discounting periods which is one year in the described question
So, once the interest rate increase, the denominator - (1+r)^n - will increase. Then, if FV remains constant, PV will decrease.
So, The present value of this cash flow will be decreased following the increase in the interest rate.
