Answer:
Total interest = 1239.12
Explanation:
Assume;
Loan amount = P
Annual payment = X
P[1st payment] = X/[1+0475]⁸
P[1st payment] = X/[1.0475]⁸
P[5th payment] = X/[1+0.0475]⁴
P[5th payment] = X/[1.0475]⁴
P[5th payment] = 699.68
So,
X = 699.68[1.0475]⁴
X = 842.39
P = (842.39/0.0475)(1 – 1/1.0475⁸)
P = 5,500 (Approx)
Total interest = [842.39 x 8] - 5,500
Total interest = 1239.12
Select one reason a company's capital structure may include more equity than debt.
a. Relying too heavily on debt can increase the interest rate that a company must pay on its debt.
b. Taking on more equity means that a company will be more leveraged.
c. Equity has significant tax advantages that debt does not.
d. Too much debt will decrease a company's volatility.
Answer:
a. Relying too heavily on debt can increase the interest rate that a company must pay on its debt.
Explanation:
It is to avoid the financial risk that comes with debt. Financial risk is the risk of default in payment of Interest charges that comes with debt instruments. This is because debt instruments carry a financial obligation to pay Interest whether or not the company is performing well
Select one reason a company's capital structure may include more equity than debt.
Relying too heavily on debt can increase the interest rate that a company must pay on its debt. CORRECT
Taking on more equity means that a company will be more leveraged. INCORRECT
Equity has significant tax advantages that debt does not. INCORRECT, as equity doesn't have any tax advantages
Too much debt will decrease a company's volatility. INCORRECT
How would the following transactions affect U.S. exports, imports, and net exports?
a. An American art professor spends the summer touring museums in Europe.
b. Students in Paris flock to see the latest movie from Hollywood.
c. Your uncle buys a new Volvo.
d. The student bookstore at Oxford University in England sells a copy of this textbook.
e. A Canadian citizen shops at a store in northern Vermont to avoid Canadian sales taxes.
Answer:
A. As a result of the professors activities, import would increase while export remains unchanged. Net export would reduce.
B. Export would increase while import remains unchanged. Net import would increase
C. Volvos are made in Sweden. So, the Volvo would be imported. This increases import and export remains unchanged. Net export would reduce.
D. The sales takes place in England, so US export, import and net export would remain unchanged.
E. Export would increase while import remains unchanged. Net import would increase
Explanation:
Net export = Export - Import
Vaughn Manufacturing gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per books, 8/31 $28600 Deposits in transit 1200 Notes receivable and interest collected by bank 6900 Bank charge for check printing 160 Outstanding checks 16300 NSF check 1390 The adjusted cash balance per books on August 31 is
Answer:
$33,950
Explanation:
Calculation for The adjusted cash balance per books on August 31 is
Cash balance per books, 8/31 $28,600
Add Notes receivable and interest collected by bank 6,900
Less Bank charge for check printing (160)
Less NSF check (1,390)
Adjusted cash balance per books $33,950
Therefore the adjusted cash balance per books on August 31 is $33,950
Which two approaches will solve this issue?
Managers at Universal Containers (UC) have noticed that shipment records (a custom object) are being sent to the shipping department with bad address data specifically, addresses have missing data like City and poorly formatted Postal codes.
Answer:
Universal Containers (UC)
Two approaches to solve the shipment records issue are:
a. Set Validation Rules. For example, a validation rule will specify that the postal address fields contain the required address data.
b. Use Validation Texts. For example, a validation text for the postal code will indicate that the wrong postal code has been used for a specific address and will ask for immediate correction before the shipment records are sent to the shipping department.
Explanation:
A Validation Rule is a field property in the Expression Builder. It is used to specify and define conditions that limit values that can be entered in a particular field. Validation rules are usually reinforced with the use of Validation Texts, which are messages that are displayed when the data entered in the data fields do not conform to the validation rule or when the validation rule is violated.
3Ts Corp. will start selling 10-year bonds today. The bonds have semiannual coupon payments, an annual coupon rate of 8%, and a par value of $1,000. The yield to maturity (YTM) for this bond is expected to be 10%. What is the price of the bond today? A. 770.60 B. 811.67 C. 1,000.00 D. 877.11 E. 875.38
Answer:
E. 875.38
Explanation:
The computation of the price of the bond today is as follows
Given that
Future value = $1,000
PMT = $1,000 ×8% ÷2 = $40
NPER = 10 × 2 = 20
RATE = 10% ÷ 2 = 5%
The formula is given below:
= -PV(RATE;NPER;PMT;FV;TYPE)
After applying the above formula the price of the bond today is $875.38
Here the present value formula is applied to determine the same
Therefore the last option i.e. E is correct
Which of the following parties to an option contract on a company's shares is obligated to buy shares at the option exercise price if the option is exercised? A. Call buyerB. Put sellerC. Put buyerD. Call seller
Answer:
Option B (Put seller) is the appropriate alternative.
Explanation:
Put seller relates to the practice including its opportunity to then be implemented. That whenever a put application is approved, this same writer typically takes the equality of opportunity at either the strike amount from the lengthy put grabber. Writing possibilities seems to be an opportunity for investors. That being said, the earnings from composing the given opportunity would be constrained to either the premium, although the put buyer could keep going to create revenue or gains until another inventory would be zero.Some other three situations do not relate to either the type of situation in question. So there is one that is the appropriate one.
The parties that an option contract on a company's shares is obligated to buy shares at the option exercise price if the option is exercised include option B: Put Seller.
What is the term Put Seller about?Put seller is defined as the seller relates to the practice including the equality of opportunity at either the strike amount from the lengthy put grabber.
Writing possibilities seems to be an opportunity for investors. The earnings from composing the given opportunity would be constrained to either the premium.
Therefore, correct option is B.
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Innovative entrepreneurs and their business firms that destroy existing business models are referred to as ________.A) crowdfundersB) venture capitalistsC) disruptorsD) angel investors
Answer: C) disruptors
Explanation:
Disruptors as the term implies, tend to disrupt the normal way of doing things by creating new and more efficient methods of production that will usurp the dominance of those are the top such that they eventually take over the industry.
In coming up with new ways of doing things, these disruptors are innovators and they are usually entrepreneurs who are not weighed down by the belief that the industry should work in a certain way and so they are more open to coming up with these new ideas that are so disruptive.
Royce, a California resident receives $20,000 from a rental building in Arkansas. Royce only reports the $20,000 to Arkansas and pays $2,000 net income tax to Arkansas. Since Royce is a California resident, California also taxes the $20,000, but gives him a tax credit for what amount for the tax he paid to Arkansas
Answer:
$2,000
Explanation:
The state of California will grant its citizens a tax credit equal to the amount of taxes paid in other states when computing income received outside its borders. This same logic is applied by the federal government when someone earns income in foreign countries and pays taxes to a foreign government. Taxes paid to other governments decrease the amount of taxes that you pay to your own government.
The U.S. Securities Act focuses on investments through the
a. Preferred market.
b. Common market.
c. Secondary market.
d. Primary market.
Answer: c. Secondary market.
Explanation:
The U.S. Securities Act was passed in 1933 in the aftermath of the Great Depression which saw the Stock market crash and investors lose massive amounts of money.
The Act is meant to regulate the activities of the Stock market which is where stocks that have already been issued are traded. This means that the stock market is a secondary market therefore the Act focuses on investments through the secondary market.
Which of the following is true regarding taxation of dividends in participating policies?
a. They are always taxable to chronically ill insured.
b. There are always taxed
c. There is a 10% penalty for early distribution of the death benefit.
d. They are taxed free to terminal ill insured
Answer:
d. They are tax free to terminal ill insured
Explanation:
Dividends in participating policies are not taxed, whether you are chronically ill or not. The IRS considers dividends distributed by participating policies as unused premiums, they are not considered income. Only if any interests are earned, then only the interests will be taxed.
When using variable costing, costs are grouped by each of the following (select all answers that are applicable):___________a) functionb) variablec) fixedd) production
Answer:
Where THE OPTIONS ????Answer:
Explanation:
Select all answers that apply:
Production, variable, fixed
As the cost of storage continues to decrease, SANs are emerging to be a better storage and data protection alternative for _______.
a. Enterprise Computing
b. Cloud Computing
c. SMBs
d. Secured Access
Answer:
a. Enterprise Computing
Explanation:
Remember, it is Enterprises that are most often concerned about data protection alternatives. Hence, SANs (Storage Area Networks) are providing improved data protection, by connecting several networks together using an enterprise-centered design approach.
This technology has indeed acted as a cost-effective storage alternative for some enterprises today.
Workplace diversity describes differences among workers in any of the following areas:
salary
office space
religion
race
Answer:
religion
race
Explanation:
Diversity in the workplace is a deliberate attempt to incorporate a wide range of different workers. It is an appreciation that each person or group of people is unique and has diverse characteristics. Workplace diversity results in the organization being accommodative to diverse cultures and different identities.
Workplace diversity embraces race, gender, age, sexual orientation, ethnic groups, religion, sexual orientation, and physical conditions. It also includes other unique differences between people.
At the end of the current year, the accounts receivable account of Malik's Lanscaping Service has a debit balance of $390,000. Credit sales are $2,730,000. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated uncollectible accounts. Assume the following independent conditions existed prior to the adjustment:
Allowance for Doubtful Accounts has a credit balance of $1,770.
The percentage of sales method is used and bad debt expense is estimated to be 1% of credit sales. If an amount box does not require an entry, leave it blank.
Date Account title Doc No. Post REF Debit Credit
1. 20-Dec.31 _____________
2. _____________
3. _____________
Answer:
Date Account Title Post REF Debit Credit
20 Dec. 31 Bad Debt Expense $27,300
Allowance for Doubtful Debt $27,300
Explanation:
The bad debt expense for the year is estimated at 1% of credit sales using the percentage of sales method:
= 1% * 2,730,000
= $27,300
This figure will be debited to the expense account for Bad debts and credited to the Allowance for Doubtful debt account.
Jorgansen Lighting, Inc., manufactures heavy-duty street lighting systems for municipalities. The company uses variable costing for internal management reports and absorption costing for external reports to shareholders, creditors, and the government. The company has provided the following data:
Year 1 Year 2 Year 3
Inventories:
Beginning (units) 200 170 180
Ending (units) 170 180 220
Variable costing net
operating income $1,080,400 $1,032,400 $996,400
The company's fixed manufacturing overhead per unit was constant at $560 for all three years.
Requirement 1:
Determine each year’s absorption costing net operating income. Present your answer in the form of a reconciliation report for year 1, 2 and 3.
Year 1 Year 2 Year 3
Beginning inventories
Ending inventories
Change in inventorie
Fixed manufacturing overhead in beginning inventories
Fixed manufacturing overhead in ending inventories
Fixed manufacturing overhead deferred in (released from) inventorie
Variable costing net operating income
Add (deduct) fixed manufacturing overhead cost deferred in (released from) inventory under absorption costing
Absorption costing net operating income
Requirement 2:
In Year 4, the company's variable costing net operating income was $984,400 and its absorption costing net operating income was $1,012,400.
(a) Did inventories increase or decrease during Year 4?
(b) How much fixed manufacturing overhead cost was deferred or released from inventory during Year 4?
Deferred or released
Ffixed manufacturing overhead cost $
Answer:
Jorgansen Lighting, Inc.
Requirement 1:
Year 1 Year 2 Year 3
Variable costing net
operating income $1,080,400 $1,032,400 $996,400
Inventory difference (16,800) (5,600) (22,400)
Absorption costing net
operating income $1,063,600 $1,026,800 $974,000
Requirement 2:
Fixed manufacturing overhead cost deferred = $28,000
Explanation:
a) Data and Calculations:
Fixed manufacturing overhead per unit = $560 for all three years
Year 1 Year 2 Year 3
Inventories:
Beginning (units) 200 170 180
Ending (units) 170 180 220
Difference in inventories 30 -10 -40
Value of inventory diff $16,800 ($5,600) ($22,400)
Variable costing net
operating income $1,080,400 $1,032,400 $996,400
Inventory difference (16,800) (5,600) (22,400)
Absorption costing net
operating income $1,063,600 $1,026,800 $974,000
Requirement 2:
Year 4
Variable costing net operating income $984,400
Absorption costing net operating income $1,012,400
Difference in net operating income $28,000
Inventory increase by $28,000/$560 = 50 units
If public goods were marketed like private goods, then public goods would be overproduced:__________
Answer:
in the presence of suce positive externalities
Explanation:
because the cost of production for the firm are overstated and the profits are understated
A corporation issued 2,500 shares of its no par common stock at a cash price of $11 per share. The entry to record this transaction would be:
Answer:
Date Account Titles and Explanation Debit Credit
Cash $27,500
Common stock $27,500
(Being shares issued at cash price recorded)
Common stock = 2,500 shares * $11
Common stock = $27,500
6. The company paid $900 cash toward accounts payable.
do you have any clue some story do that question has a story sorry for the disturb but this is compusing
A bakery buys flour in 25-pound bags. The bakery uses 1,215 bags a year. Ordering cost is $10 per order. Annual carrying cost is $75 per bag. Determine the economic order quantity.
Answer:
the economic order quantity is 18 units
Explanation:
The computation of the economic order quantity is as follows
Economic order quantity is
[tex]= \sqrt{\frac{2 \times annual\ demand \times ordering\ cost}{carying\ cost} } \\\\= \sqrt{\frac{2\times 1,215\times \$10}{\$75} }[/tex]
= 18 units
hence, the economic order quantity is 18 units
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Strategic use of white space improves document readability. Which of the following techniques employ white space?
A. Using headings
B. Using parallel structures
C. Using serif typeface
D. Using bulleted and numbered lists
Answer: A & D
Explanation: White space is the white area between written characters and graphic regions on a produced page or computer display; It is also blanks and the vertical blanks lines in between paragraphs, or any other organized rows of text lines for example poetry.
The use of headings and the use of bulleted and numbered lists all employ the use of white space which helps improve the readability of documents. These ample spaces created can be used to break up paragraphs into readable chunks.
Question 3 of 10
Which of the following is a disadvantage to refinancing?
O A. Prepayment penalties
B. Lower interest rates
O C. Locked rates
D. Lower monthly payments
Answer:
A. Prepayment penalties
Explanation:
Refinancing a loan has the benefits of a lower interest rate, which results in some cost-saving. However, when seeking to refinance, there cost that have to be incurred. The customer has to apply for refinancing, which attracts an application fee. The customer is also required to pay closing costs for the previous loan.
Lower interest rates, Locked rates, and Lower monthly payments are advantages of refinancing.
Lee Tanaka spent 225 hours in the tax year working with Partnership Q, a gardening store. He also worked 140 hours with a floral design partnership that does decorations for weddings and funerals. Finally, he spent 155 hours in a new business selling flowers to hospitals. None of the entities are PTPs. He is considered a(n) _______________ for all activities.
Answer:
material participant
Explanation:
In order to be considered a material participant in a business, you have to work at least 100 hours. The IRS allows material participants to include business income as regular earned income, instead of passive income.
Since Lee worked more than 100 hours in each of these businesses, he will be considered a material participant in all of them.
Flamingo Company borrows $30,000 using a five-year, long-term installment note payable. The rate on the note is 5 percent and Flamingo agrees to make monthly payments of $566.14. When Flamingo records its first payment on the note payable, what will the journal entry look like (without the numbers).
Answer:
Interest expense = 30,000*5%*1/12
Interest expense = 30,000*0.00416666667
Interest expense = $125.0000001
The journal entry will be:
Description Debit Credit
Interest expense $125
Notes payable $441.14
Cash $566.14
Why might a military taxpayer want to consider making contributions to the military Thrift Savings Plan while deployed to a combat zone
Answer:
It allows a military taxpayer to divert money to Roth TSP that saves the military taxpayer from paying income tax on the earnings.
Explanation:
A military taxpayer want to consider making contributions to the military Thrift Savings Plan while deployed to a combat zone as it allows a military taxpayer to divert money to Roth TSP that saves the military taxpayer from paying income tax on the earnings.
Here, TSP stands for Thrift Savings Plan.
On January 1, 2021, the general ledger of TNT Fireworks includes the following account balances:
Accounts Debit Credit
Cash $ 60,100
Accounts Receivable 27,800
Allowance for Uncollectible Accounts $ 3,600
Inventory 37,700
Notes Receivable (5%, due in 2 years) 28,800
Land 169,000
Accounts Payable 16,200
Common Stock 234,000
Retained Earnings 69,600
Totals $ 323,400 $ 323,400
During January 2021, the following transactions occur:
January1 Purchase equipment for $20,900. The company estimates a residual value of $2,900 and a four-year service life.
January4 Pay cash on accounts payable, $10,900.
January8 Purchase additional inventory on account, $96,900.
January15 Receive cash on accounts receivable, $23,400.
January19 Pay cash for salaries, $31,200.
January28 Pay cash for January utilities, $17,900.
January30 Sales for January total $234,000.
All of these sales are on account. The cost of the units sold is $122,000.
Information for adjusting entries:
a. Depreciation on the equipment for the month of January is calculated using the straight-line method.
b. The company estimates future uncollectible accounts. The company determines $4,400 of accounts receivable on January 31 are past due, and 50% of these accounts are estimated to be uncollectible. The remaining accounts receivable on January 31 are not past due, and 3% of these accounts are estimated to be uncollectible. (Hint: Use the January 31 accounts receivable balance calculated in the general ledger.)
c. Accrued interest revenue on notes receivable for January.
d. Unpaid salaries at the end of January are $34,000.
e. Accrued income taxes at the end of January are $10,400.
1. Record the adjusting entries on January 31 for the above transactions(Please write out)
2. Prepare an adjusted trial balance as of January 31, 2021.(Please write out)
3. Prepare a multiple-step income statement for the period ended January 31, 2021.(Please write out)
4. Prepare a classified balance sheet as of January 31, 2021. (Deductible amounts should be indicated with a minus sign.)(Please write out).
5. Record closing entries(Please write out)
6. Analyze how well TNT Fireworks manages its assets:
a-1. Calculate the return on assets ratio for the month of January.
Return on Assets Ratio
Choose Numerator ÷ Choose Denominator = Return on Assets Ratio
÷ = Return on assets
Answer:
TNT Fireworks
1. Adjusting Entries on January 31:
Accounts Debit Credit
a. Depreciation Expense $375
Accumulated Depreciation $375
b. Uncollectible Expense $5,620
Allowance for Uncollectible Accounts $5,620
c. Accrued interest revenue $120
Interest Revenue $120
d. Salaries Expense $34,000
Salaries payable $34,000
e. Income Tax Expense $10,400
Income tax payable $10,400
2. Adjusted Trial Balance as of January 31, 2021:
Accounts Debit Credit
Cash $ 2,600
Accounts Receivable 238,400
Allowance for Uncollectible Accounts $9,220
Inventory 12,600
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Equipment 20,900
Accumulated Depreciation 375
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Income Tax Expense 10,400
Uncollectible Expense 5,620
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400
Common Stock 234,000
Retained Earnings 69,600
Sales Revenue 234,000
Interest Revenue 120
Accrued Interest
Receivable 120
Cost of Goods Sold 122,000
Total $693,925 $693,915
3. Multi-step Income Statement for the period ended January 31, 2021:
Sales Revenue 234,000
Cost of goods sold 122,000
Gross profit $112,000
Interest Revenue 120
Total revenue $112,120
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Uncollectible Expense 5,620 $89,095
Income before tax $23,025
Income Tax Expense 10,400
Net Income $12,625
Retained Earnings, January 1 69,600
Retained Earnings, January 31 $82,225
4. Classified Balance Sheet as of January 31, 2021:
Assets:
Cash $ 2,600
Accounts Receivable 238,400
Uncollectible Accounts 9,220 229,180
Accrued Interest Receivable 120
Inventory 12,600
Current assets $244,500
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Equipment 20,900
Accumulated Dep. 375 20,525 218,325
Total assets $462,825
Liabilities:
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400 $146,600
Equity:
Common Stock 234,000
Retained Earnings 82,225 $316,225
Total liabilities and Equity $462,825
5. Closing Journal Entries:
Accounts Debit Credit
Income Summary $221,495
Depreciation Expense 375
Salaries Expense 65,200
Utilities Expense 17,900
Income Tax Expense 10,400
Uncollectible Expense 5,620
Cost of Goods Sold 122,000
To close temporary accounts to the income summary.
Sales Revenue 234,000
Interest Revenue 120
Income Summary $234,120
To close temporary accounts to the income summary.
Cash $ 2,600
Accounts Receivable 238,400
Inventory 12,600
Notes Receivable
(5%, due in 2 years) 28,800
Accrued Interest
Receivable 120
Land 169,000
Equipment 20,900
Allowance for Uncollectible Accounts $9,220
Accumulated Depreciation 375
Accounts Payable 102,200
Salaries Payable 34,000
Income Taxes Payable 10,400
Common Stock 234,000
Retained Earnings 82,225
To close permanent accounts to the balance sheet.
Explanation:
a) Data and Calculations:
Accounts Debit Credit
Cash $ 60,100
Accounts Receivable 27,800
Allowance for
Uncollectible Accounts $ 3,600
Inventory 37,700
Notes Receivable
(5%, due in 2 years) 28,800
Land 169,000
Accounts Payable 16,200
Common Stock 234,000
Retained Earnings 69,600
Totals $ 323,400 $ 323,400
See workings attached.
Please sort the following into PEST Analysis, Porter's 5 Forces, Competitive Advantage Analysis and SWOT Analysis.
a. Weaknesses
b. Economic Forecasting
c. Cost Leadership
d. Differentiation
e. Social Forecasting
f. Opportunities
g. Potential new entrants and barriers to entry
h. Technological Forecasting
i. Suppliers and their bargaining power
Answer:
The data is sorted in the required categories as follows. Where no category is filled with the existing data, i have indicated with the "Nill" narration as below :
PEST Analysis
1. Political factors
- Nill
2. Economic factors
- Economic Forecasting
3. Social factors
- Social Forecasting
4. Technological factors
- Technological Forecasting
Porter's 5 Forces
1. Bargaining Power of Customers
- Nill
2. Bargaining Power of Suppliers
- Suppliers and their bargaining power
3. Competition Rivalry between existing competitors
- Nill
4. Threat of Substitutes
- Nill
5. Threats of New Entrants
- Potential new entrants and barriers to entry
Competitive Advantage Analysis
1. Quality
- Nill
2. price
- Cost Leadership
3. location
4. selection
- Differentiation
5. service
- Nill
6. speed/turnaround
- Nill
SWOT Analysis
1.Strength
- Cost Leadership
- Differentiation
2.Weakness
- Weaknesses
3.Opportunities
- Opportunities
4.Threats
- Nill
Sorting the given factors into PEST Analysis, Porter's 5 Forces, Competitive Advantage Analysis and SWOT Analysis gives:
PEST Analysis:
b. Economic Forecastinge. Social Forecastingh. Technological ForecastingPorter's 5 Force:
g. Potential new entrants and barriers to entryi. Suppliers and their bargaining powerCompetitive Advantage Analysis:
c. Cost Leadershipd. DifferentiationSWOT Analysis:
a. Weaknessesf. Opportunities What are some ways of evaluating a business's potential?PEST Analysis uses various forecasting methods such as social and economic forecasting to see how the business would fare in the market.
SWOT analysis show the strengths, weaknesses, opportunities, and threats that a business goes through.
There is also competitive advantage analysis and Porter's 5 forces which relate to how well the business relates with stakeholders in the market.
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What is the yield to maturity for a bond paying $100 annually that has 6 years until maturity and sells for $1,000
Answer:
10%
Explanation:
The yield to maturity (YTM) of the Bond is interest rate that will make the Present Value of the Cash Flow equal to the Initial Investment.
Assuming the Selling Price and the Maturity amount of $1,000 applies, the yield to maturity will be calculated as follows :
FV = $1,000
PMT = $100
N = 6
PV = $1,000
P/YR = 1
YTM = ?
Using a financial calculator to calculate this value as above, we get 10%
The yield to maturity for the Bond is 10%
. Estimate the balance of the Allowance for Doubtful Accounts using percent of sales method. Assume a $0 existing balance in Allowance for Doubtful Accounts. Hint: Identify the percent of uncollectible for credit sales. 2. Estimate the balance of the Allowance for Doubtful Accounts using percent of receivables method. Assume a $0 existing balance in Allowance for Doubtful Accounts. Hint: Identify the percent of uncollectible for accounts receivable.
Answer:
Note: The question is attached below as picture
1. Bad debt expense under percentage of sales method = Credit sales * Percentage of doubtful account
= $7,150,000 * 1%
= $71,500
2. Balance in Allowance for doubtful account under percentage of receivables method = Accounts receivable balance at end * % of doubtful account
= $1,220,000 * 5%
= $61,000
3. Age Amount % of Un-collectible Estimated Balance of
account uncollectible account
Not due yet 830000 2% 16600
1-30 254000 3% 7620
31-60 86000 7% 6020
61-90 38000 33% 12540
over 90 day 12000 68% 8160
Total $50,940
The estimated balance in allowance for doubtful account at end = $50,940
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Answer:
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Bigbucks Brokerage provided the taxpayer $2,400 in bicycle commuting reimbursement in 2020. How much of that reimbursement, if any, must be included in the taxpayer's income
Answer:
Bigbucks Brokerage
The whole amount of $2,400 must be included in the taxpayer's income.
Explanation:
The Bicycle Commuting Reimbursement in 2020, given under a Bicycle Commuter Tax Benefit program, is taxable as income to the employee. According to the provisions of the Tax Cut and Jobs Act, the restriction placed on the Bicycle Commuter Tax Benefit will expire in 2026. The bicycle commuting reimbursement is a benefit that can only be offered by employers and is regarded as a taxable benefit to the affected employee.
The amount of $0 must be included in the taxpayer's income because it is the standardized by IRS.
The bicycle commuting reimbursement is a benefit offered by employers to his/her employees to ease the burden of transportation expenses.
In essence, the Bigbucks Brokerage are not taxed because of their nature as an allowance and the standardization by the Internal revenue service.
In conclusion, the amount of $0 must be included in the taxpayer's income because it is the standardized by IRS.
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