Answer:
On February 1, a customer's account balance of $2,700 was deemed to be uncollectible.
The entry to be recorded on February 1 to record the write-off assuming the company uses the allowance method is:
Debit Allowance for Doubtful Accounts $2,700; credit Accounts Receivable $2,700.
Explanation:
Using the allowance method, every bad debt entry is first reflected in the Allowance for Doubtful Accounts before it is taken to the bad debt expense account.
The entries above reduce the Accounts Receivable account by the amount of the write-off and reduces the Allowance for Doubtful Accounts by the same amount. Any recovery of written off debt is also treated in the Allowance for Doubtful Accounts and the Accounts Receivable account in revised order. This method is unlike the direct write-off method. With the direct write-off method, the Accounts Receivable is credited with the amount of the write-off and the write-off is expensed in the Bad Debts Expense account directly.
Answer:
Present value of investment X = $41,225.37
Present value of investment Y = $37,233.50
Explanation:
The present value of the cash flows can be found by discounting the cash flows at the discount rate.
This can be found using a financial calculator
Cash flow each year from year 1 to 9 for investment X = $5,800
Discount rate = 5%
Present value = $41,225.37
Cash flow each year from year one to year 5 for investment Y = $8,600
Discount rate = 5%
Present value = $37,233.50
I hope my answer helps you
Answer:
$250,000
Explanation:
The depreciable cost of the equipment is the amount that will be used to provide for depreciation on the asset also known as Depreciable Amount.
<em>Depreciable Cost = Cost - Salvage Value</em>
therefore,
Depreciable Cost = $300,000 - $50,000 = $250,000
Answer:
The amount of the tax on a bottle of wine is $5 per bottle. Of this amount, the burden that falls on consumers is $3 per bottle, and the burden that falls on producers is $2 per bottle. True or False: The effect of the tax on the quantity sold would have been larger if the tax had been levied on producers.
Explanation:
The amount of the tax on a bottle of wine is $5 ($3 + $2).
The burden on consumers is $3 ($9 - $6), which is the difference between the after-tax purchase price and the before-tax purchase price for consumers. This implies that the burden passed to consumers is $3 out of the total tax burden of $5.
The burden on producers is $2 ($6 - $4) which represents the difference between before-tax selling price and the after-tax selling price for the producers. This means that the burden passed to producers is $2 out of the total tax burden of $5.
If the tax burden were passed to the producers alone, the selling price would have been more than $11 ($6 + 5). This would have reduced demand for wine as consumers would have been forced to bear the total burden. This would have made the tax unequitable. This would have been the case unless demand is inelastic. That means that the total demanded is not sensitive to price increases.