Reference no: EM133074384
Question - Information related to Gustavo Company for 2012 is summarized below.
Total credit sales $1,100,000
Accounts receivable at December 31 369,000
Bad debts written off 22,150
Required -
(a) What amount of bad debts expense will Gustavo Company report if it uses the direct write-off method of accounting for bad debts?
(b) Assume that Gustavo Company decides to estimate its bad debts expense to be 2% of credit sales. What amount of bad debts expense will Gustavo record if Allowance for Doubtful Accounts has a credit balance of $3,000?
(c) Assume that Gustavo Company decides to estimate its bad debts expense based on 6% of accounts receivable. What amount of bad debts expense will Gustavo Company record if Allowance for Doubtful Accounts has a credit balance of $4,000?
(d) Assume the same facts as in (c), except that there is a $2,000 debit balance in Allowance for Doubtful Accounts. What amount of bad debts expense will Gustavo record?
(e) What is the weakness of the direct write-off method of reporting bad debts expense?
Find spot-futures prices for variety of equity indexes
: 1. Explain how companies can hedge risks in their operating costs by using each of the following instruments. Hypothetical examples are required.
|
What is the average annual rate of return she earned
: Forty years ago, your mother invested $5,000. Today, that investment is worth $430,065.11. What is the average annual rate of return she earned on investment
|
Form of equal annual end-of-the-year cash flows
: William wishes to save enough money to purchase a retirement lake cabin. He is willing to spend? $200,000 for the cabin and he can save? $20,000 per year and in
|
How much cash will Modern Candy receive when it is paid
: Modem Candy, a wholesaler, sold a crate of candy for $780 on account to a customer with credit terms of 3/20, n/60. How much cash will Modern Candy receive
|
What amount of bad debts expense will Gustavo Company report
: What amount of bad debts expense will Gustavo Company report if it uses the direct write-off method of accounting for bad debts
|
Standard deviation for a three-month period
: You find a particular stock has an annual standard deviation of 36 percent. What is the standard deviation for a three-month period?
|
Calculate the debt-to-assets ratio
: Suppose half of its liabilities are in the form of debt. Calculate the debt-to-assets ratio. Do not round intermediate calculations
|
What is the expected rate of return for stock
: 1. A firm is expected to have earnings next year of $5.36 per share and the firm is expected to pay a dividend of $3.37. Investors' required rate of return is 1
|
Determine the Jones family income
: In addition, during August, the 5-year-old went to overnight camp for 3 weeks at a cost of $400 per week. Determine the Jones' family income
|