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3 years ago

Under the allowance method, Bad Debt Expense is recorded

1 answer:

3 0

The correct option is A.
Under the allowance method, bad debt expense is recorded FOR AN AMOUNT WHICH THE COMPANY ESTIMATES IT WILL NOT COLLECT.
Allowance method is a method of accounting that is used to estimate the amount of uncollectibles at the end of each financial period. Uncollectibles refers to debts which the company has no hope of ever collecting them again.

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You are told the column totals in a trial balance are not equal. After careful analysis, you discover only one error. Specifical

Alex777 [14]

Answer:

a. The Debit column is correctly stated.

b. The Credit column is understated by $17,300 ($8,650 * 2).

c. The Automobiles account balance is correctly stated in the trial balance.

d. The Accounts Payable account balance is understated in the trial balance by $17,300 ($8,650 * 2).

e. If the Debit column total of the trial balance is $200,000 before correcting the error, the total of the Credit column before correction is $182,700.

Explanation:

This mistake is an Error of Commission. It is a problem of arithmetical accuracy, for example, posting to the wrong side of one ledger account. In this case, the Accounts Payable should have been credited with the amount of $8,650. As an arithmetic error, it can only be corrected by doubling the affected amount on the Credit side of the Accounts Payable account.

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3 years ago

By law, a company has to ________.

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Answer:

I'm going to use common sense and say A.

Explanation:

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3 years ago

Countess Corp. is expected to pay an annual dividend of $5.29 on its common stock in one year. The current stock price is $79.83

Nostrana [21]

Answer:

10.03%

Explanation:

Using the dividend discount formula, find the cost of equity; r

$r = \frac{D1}{P0} +g$

whereby,

D1 = Next year's dividend = 5.29

P0 = Current price of the stock = 79.83

g = growth rate of dividends = 3.40% or 0.034 as a decimal

Next, plug in the numbers to the formula above;

$r = \frac{5.29}{79.83} +0.034\\ \\ r =0.06627 + 0.034\\ \\ =0.10027$

As a percentage, r = 10.03%

Therefore, the company's cost of equity is 10.03%

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3 years ago