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Lina20 [59]
3 years ago
15

A company used the percent of sales method to determine its bad debts expense. At the end of the current year, the company's una

djusted trial balance reported the following selected amounts: Accounts receivable $ 445,000 Debit Allowance for Doubtful Accounts 1,350 Debit Net Sales 2,200,000 Credit All sales are made on credit. Based on past experience, the company estimates 2.0% of its net sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense
Business
1 answer:
MA_775_DIABLO [31]3 years ago
5 0

Answer:

Dr Bad Debt Expense $44,000

Cr Allowance for Doubtful Accounts $44,000

Explanation:

Preparation of What adjusting Journal entry should the company make at the end of the current year to record its estimated bad debts expense

Based on the information given the adjusting Journal entry that the company should make at the end of the current year to record its estimated bad debts expense will be:

Dr Bad Debt Expense $44,000

Cr Allowance for Doubtful Accounts $44,000

(Net Sales 2,200,000*Estimated 2.0% of net sales)

(Being to record estimated bad debts expense)

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1) You are considering purchasing a 20 year bond from Saudi Arabia. You have a required return
inessss [21]

Answer:

$812.20

Explanation:

Given the following bond characteristic:

Coupon rate = 12%

Market or yield rate = 15%

Years to maturity = 20 years

Face or par value = $1000

Inputting the values into a bond value calculator, the bond value output is : $812.20

This means that the sum of the present value of all likely coupon payment and par at maturity. It is simply the present value of all cash streams it is projected to generate.

6 0
3 years ago
On October 1, 2018, Iona Frisbee Co. issued stock options for 300,000 shares to a division manager. The options have an estimate
Gemiola [76]

Answer:

$300,000

Explanation:

Option expenses to be recognized in the first year ,

= \frac{N\ *\ FV}{Total\ vesting\ period}    ×  period elapsed   - Expenses already recognized

wherein N = No of options expected to be vested

              FV = Fair value on the grant date

              Vesting period = The time period after which the options can be exercised

Thus, after the first year, employee compensation expenses to be recognized

= \frac{300000 *\ 3}{3\ years} × 1 year = $300,000 - 0 = $300,000

Similarly, for the second year, option expenses to be recognized would be,

= \frac{300000 *\ 3}{3\ years}  × 2 years - $300,000 =  $300,000

Similarly for the third year

= \frac{300000 *\ 3}{3\ years} × 3 years - ($300,000+ 300,000)  = $300,000

The journal entry to be passed each year would be

Stock Option Compensation Expense A/C   Dr. $300,000

                           To Stock Options A/C                        $300000  

(Being stock option expenses for the year recognized)

5 0
2 years ago
Read 2 more answers
Question Mode Multiple Choice Question In a ______, members of the channel pursue their own goals and maximize their own profits
joja [24]

Answer:

b. Warehouses

c. Stores

4 0
2 years ago
On December 31, 2020, American Bank enters into a debt restructuring agreement with Barkley Company, which is now experiencing f
Setler79 [48]

a) Since the debt modification is <u>substantial</u>, more than 10%, the gain to be recorded by Barkley Company, $600,000, will be equal to the loss recorded by American Bank under the debt restructuring.

b) Barkley Company can record a Profit under the term modification above because it is a <u>substantial</u> debt modification, with a gain of $600,000, which is 20% of the original debt.

c. The preparation of the Interest Payment Schedule is as follows:

Period        PV                        PMT             Interest                     FV

1        $2,400,000.00    $621,565.76        $34,262.40        $1,812,696.64

2         $1,812,696.64    $621,565.76        $25,878.06        $1,217,008.93

3         $1,217,008.93    $621,565.76         $17,374.02             $612,817.19

4             $612,817.19    $621,565.76          $8,748.58           $0.00

<h3>What is a debt modification?</h3>

A debt modification is the restructuring of debt to enable the debtor experiencing financial difficulties to regain the financial muscle to settle the restructured debt.

Debt modification can affect the following debt terms:

  • The amounts
  • Timing of interest payments
  • Timing of principal repayment
  • Rate of interest.

<h3>Data and Calculations:</h3>

12% Note Payable = $3,000,000

Revised 10% Note Payable = $2,400,000

Gain on Debt Modification = $600,00

Extended Maturity Period = 4 years

Learn more about debt modifications at brainly.com/question/1490221

5 0
1 year ago
Which is the largest component of Aggregate Expenditures?
Lisa [10]

Answer:

gever distribution

Explanation:

fasho

7 0
3 years ago
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