All categories

2 years ago

Handel Company uses the allowance method for estimating uncollectible accounts.

Business

1 answer:

Annette [7]2 years ago

7 0

Answer: Please refer to Explanation.

Explanation:

January 2

DR Accounts Receivable - Terry Richman $2,000

CR Sales $2,000

(To record sale of goods to Terry Richman on Account)

April 15

DR Cash $600

CR Accounts Receivable - Terry Richman $600

(To record cash received from Terry Richman)

August 21

DR Allowance for Doubtful Debt $1,400

CR Accounts Receivable - Terry Richman $1,400

(To record write off of Terry Richman Account)

October 5

DR Accounts Receivable - Terry Richman $300

CR Allowance for Doubtful Debt $300

October 5

DR Cash $300

CR Accounts Receivable $300

(To record Cash Received from Terry Richman)

Workings and Notes.

Terry Richman paid $600 out of their $2,000 debt before declaring bankruptcy.

= 2,000 - 600

= $1,400.

This is why $1,400 was the written off figure.

When an Receivables account is written off, it is debited to the Allowance for Doubtful Debt Account.

When money is unexpectedly received after a write off, the amount first has to be retrieved from the Allowance for Doubtful Debt and taken back to the Accounts Receivables and then it can be recorded as Cash received.

You might be interested in

Vargas Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.77 direct labor

leva [86]

Answer:

11.20

Explanation: becuase it can be

3 0

2 years ago

One of the steps the U.S. Sentencing Commission delineated companies must implement to demonstrate due diligence is that a firm

Alchen [17]

Answer:

The correct answer is number (1): True.

Explanation:

Due diligence refers to the exercise an individual is subject to after entering a contract with another party by which a certain standard of care is expected from the individual.

The United States Sentencing Commission is the governmental agency in charge of reviewing sentences discrepancies and promoting fair sentencing.

<em>In front of ethical issues within a firm, the U.S. Sentencing Commission states that the company must have disseminated a code of conduct so that the filing company can allege a violation of the due diligence employees are subject to.</em>

8 0

2 years ago

On July 1, Year 1, Yellow Rose Corp. paid $25,000 cash for a machine and paid an additional 8% sales tax. On the same date, an e

Lina20 [59]

Answer:

Journal entries are given below

Explanation:

July 1, Year 1 (Yellow Rose Corp. purchased a machine)

DEBIT CREDIT

Machine $28,000

Cash $28,000

Working

Cost of machine = Purchase price + Sales tax + Installation

Cost of machine = $25,000 + $2,000 + $1,000

Cost of machine = $28,000

Depreciation for year 1 (October to December)

DEBIT CREDIT

Depreciation Expenses $1,300

Accumulated Depreciation $1,300

Working

Annual Depreciation expense = (Cost - salvage value) / useful life

Annual Depreciation expense = (28000 - 2000) / 5 = $5,200

Depreciation for 3 months

Depreciation = $5,200 x 3/12

Depreciation = $1300

Sale of the machine

DEBIT CREDIT

Cash $14,000

Loss on Sale $7,500

Accumulated Depreciation $6,500

Machinery $28,000

Workng

Gain/Loss on sale = Sale proceed - carrying value

Gain/Loss on sale = 14,000 - 21,500

Loss on sale = $7,500

Carrying value = Cost - Accumulated depreciation

Carrying value = 28,000 - 6500 = 21500

Accumulated depreciation = $1,300 + $5,200 = $6,500

7 0

2 years ago

Match each type of fee that mutual funds charge investors with its correct description. Tiles 12b-1 distribution fee account mai

vazorg [7]

The correct matches are as follows:
1. DISTRIBUTION FEE: Management companies pay brokers 0.1% fee for marketing the fund.
In mutual fund business, distribution fee refers to the amount of money that is charged for marketing and selling fund shares. The money is used for such thing as compensating the brokers or those who sell the fund shares, paying for advertisement, printing and mailing of sales literature, etc. The distribution fee is typically capped at 0.75% of mutual asset.

2. ACCOUNT MAINTENANCE FEE: $20 broker fee charged against the mutual fund.
This is the amount of money that a broker charges for maintaing each mutual fund in an account. The fee is paid on a yearly basis by the mutual fund to the broker. Thus, for an investor who hold five mutual funds, his broker will be paid $100 every year.

3. REVENUE SHARING FEE: Payment to company that investors go through to buy the mutual funds.
Revenue sharing is said to occur when the mutual fund company makes payment to the broker or a dealer that is involved in the investment. Revenue sharing can take many form and is usually calculated as a percentage of the invested amount. Revenue sharing serves as incentives to brokers to promote one fund relative to another.

4. SHAREHOLDER SERVICE FEE: 25% broker fee charged against the mutual fund for servicing the account.
This is the amount of money that a broker is paid for servicing an account. Under the current regulations, a broker can be paid as much as 0.25% of the worth of a mutual investment as a payment for servicing the account.
<span />

5 0

2 years ago

Read 2 more answers

Prepare a net worth statement for Ben Lingo based on this information: He owns a car worth $2,000, but owes $1,500 on it at the

Murljashka [212]

Answer:

Ben Lingo's Net Worth Statement:

Assets:

Cash $82

Savings $150

Car $2,000

Inventory $1,200

Total Assets = $3,432

Liabilities:

Car loan $1,500

Credit Union loan $80

Total Liabilities = $1,580

Net Worth = Total Assets - Total Liabilities

= $3,432 - $1,580

= $1,852

5 0

2 years ago