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faust18 [17]
2 years ago
14

Kirov, Inc. reports credit sales of $200,000 for the year ending December 31, 2015. The year- end unadjusted balance of its Allo

wance for Doubtful Accounts is a debit of $9,000 Experience suggests 6 percent of its net sales will be uncollectible. The amount that should be debited to Bad Debt Expense and credited to Allowance for Doubtful Accounts in its year- end adjusting entry is
A. $3,000
B. $21,000
C. $9,000
D. $12,000
E. $23,000
Business
1 answer:
Korvikt [17]2 years ago
4 0

Answer:

D. $12,000

Explanation:

Allowance for Doubtful accounts = Credit sales * Rate

Allowance for Doubtful accounts = $200,000 * 6%

Allowance for Doubtful accounts = $12,000

                       Allowance for doubtful account

Particulars                                            Particulars

Balance brought forward  $9,000     Bad debts       $12,000

Balance carried forward    $3,000  

Total                                    $12,000    Total               $12,000

Therefore, the amount to be debited to Bad debts and credited to Allowance for Doubtful accounts is $12,000.

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skelet666 [1.2K]

Answer:

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Explanation:

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Musya8 [376]

Answer:

Ans. A) $9,314.45

Explanation:

Hi, first we have to bring to present value the monthly payments to be made for 30 years (360 months). In order for this to be useful, we have to convert this annua compounded monthly rate (6.25%) to an effective rate, that is 6.25% / 12 = 0.5208%. Now, when we find this present value, we are going to substract it from the price of the house and that is the value of the down payment. But let´s just go ahead and do it together.

We have to use this formula to bring to present value the $1,595.85 monthly payments, for 30 years (360 months) at a rate of 6.25% (0.5208% monthly).

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It should look like this

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