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solniwko [45]
1 year ago
14

Flora and Fauna Company estimates its doubtful accounts by aging its accounts receivable and applying percentages to various age

d categories of accounts. The Flora and Fauna Company computes a total of $7,200 in estimated doubtful accounts as of December 31, 2016. Its Accounts Receivable account has a balance of $225,600 and its Allowance for Doubtful Accounts has a credit balance of $1,200 before adjustment at December 31, 2016.
Required:
1. How much bad debts expense will Flora and Fauna report in 2016?
Business
1 answer:
vladimir2022 [97]1 year ago
4 0

Answer:

$6,000

Explanation:

When a company makes sales on account, debit accounts receivable and credit sales. Based on assessment, some or all of the receivables may be uncollectible.  

To account for this, debit bad debit expense and credit allowance for doubtful debt. Should the debt become uncollectible (i.e go bad), debit allowance for doubtful debt and credit accounts receivable.

Since the Allowance for Doubtful Accounts has a credit balance of $1,200 before adjustment at December 31, 2016, the additional amount to be allowed

= $7200 - $1200

= $6000

This will be posted as

Debit Bad debt expense  $6000

Credit Allowance for doubtful debt  $6000

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Leyton Lumber Company has sales of $12 million per year, all on credit terms calling for payment within 30 days, and its account
s2008m [1.1K]

<u>Solution and Explanation:</u>

The following formula is used in order to calculate the days sales outstanding:

Days sales out standing = ( Accounts receivable divided by Sales )  multiply with 365

= $1.5 million divided by $12 million multiply with 365

After calculating we get, 45.625 days

<u>In order to calculate the capital released, the following formula is used: </u>

Capital released $=$ Sales $*$ (DSO - Credit period) $/ 365$

=\$ 12 \text { million } *(45.625-30) / 365

= 513699

Therefore, the capital released is $513699

8 0
2 years ago
Marianne has opened a jewelry shop in your community and sources precious gems and metals only from Canada rather than Africa. H
S_A_V [24]

Answer:

A. reducing her exposure to the risk of reputation damaging clients.

Explanation:

CSR otherwise known as corporate social responsility is a self act by a company aimed at contributing to the development of the society or environment where the company operates. It is a volunteering and philanthropic .

Companies have now been factoring CSR into their business model because it helps them to be socially responsible and accountable. Most consumers are now beginning to check on companies who does CSR before choosing their brand.

Examples of CSR includes provision of health care facilities to the environment where the company operates, provision of scholarships to students of the host community, sponsoring events, employing people withing the community etc.

The impact of CRS and environmentally sustaining business includes but not limited to

- positively building a company's image

- increasing buyer patronage

-shortening the supply chain

-lowering cost and enhancing employee recruiting and workforce retention.

8 0
2 years ago
Fizzzle Inc. sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale. How should thi
saw5 [17]

Answer:

The gain is subtracted from net income in the operating activities section

Explanation:

Given that

Sale value of an equipment = $230,000

And, the gain on the sale = $45,000

So by considering the above information

We can say that the Sale value of an equipment is shown in the investing activities as a cash inflow while the gain on the sale is to be subtracted from the net income in the operating activities and if there is a loss than it would be added to the net income

4 0
1 year ago
Suppose there are only two firms that sell Blu-ray players, Movietonia and Videotech. The following payoff Matrix shows the prof
Karolina [17]

Answer:

From the given Matrix we can see that if videotech is selecting a high price, movietonia has a higher profit when it is charging a low price and this profit is 18. Similarly when videotech is selecting a lower price movietonia again has a higher profit when it is selecting a lower price which is 10. This indicates that movie tonia has a dominant strategy of selecting a low price.

If movietonia is selecting a high price videotech has a a higher pay off of 18 when it is selecting a low price. In case movietonia is selecting a low price videotech again has a higher profit when it is selecting a low price and this profi is 10.

Therefore videotech and movietonia both have dominant strategy of selecting a low price and this implies that low price, low price will be the Nash equilibrium.

In case the two firms are not colluding, both of them will choose a low price.

This is definitely an example of business dilemma game. The statement is true.

Explanation:

6 0
1 year ago
Ryan Co. sells major household appliance service contracts for cash. The service contracts are for a 1-year, 2-year, or 3-year p
ollegr [7]

Answer:

$475,000

Explanation:

The amount should be reported as unearned service contract revenues in Ryan's December 31, Year 1, and balance sheet will be the amount that has not expired in year 1 or outstanding service contracts that will expire in year 2 to year 4. Therefore,

Year 2 + Year 3 + Year 4 = $150,000 + 225,000 + 100,000 = $475,000 should be reported as unearned service contract revenues.

5 0
2 years ago
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