Answer:
E. $1,500; $6,000
Explanation:
In accrual basis, expenses are recognized once it is incurred. In cash basis, expenses are only recorded when cash is paid. As such,
when company uses supplies purchased in the previous period, $1,500, no expense is recorded.
when the company pays cash for inventory, $6,000, an expense for $6,000 is recorded.
Therefore the amount of accrual-basis expense is $1,500 while the amount of cash-basis expense is $6,000.
<span>The company depends on their company database when it comes to the storage and retrieval of important information in real time. This allows the company to have information which is reliable and accessible. The database of the company is a collection of data that is saved and organized to allow the user s to have its easy retrieval in times that they want to use or utilize it. The collection of information includes schemes, tables, queries, reports, views and other objects. The maintenance and accessibility of the database will need the company to have DBMs or Database Management System. The use of this system is to make sure that the data stored is safe and secured. </span>
They get sold to another shop with higher demand, or become breeding stock
Answer:
The required adjusting entry to record estimated bad debts expense is as follows:
Debit Bad Debts Accounts with $39,960
Credit Allowance for Doubtful Accounts with $39,960
Being the adjustment to bring the Allowance for Doubtful Accounts up a new credit balance of $43,625.
Explanation:
The Allowance for Doubtful Accounts had a credit balance of $3,665. Since management had estimated that $43,625 of the Accounts Receivable balance would be uncollectible, this means that the difference $39,960 ($43,625 - $3,665) would be the adjusting amount to bring the balance up-to-date.
Remember that the Allowance for Doubtful Accounts is a contra account to the Accounts Receivable. It is used to reduce the balance of the Accounts Receivable based on collectibility judgement or estimate which management makes out of experience. The balance in this account is, therefore d,educted from the Accounts Receivable in the Balance Sheet in order to obtain the net Accounts Receivable balance.
The account that expenses the increase in this account is the Bad Debts Expense Account, which is taken to the Income Statement to reduce the income.
