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In: Accounting

For each transaction below, write the net effect on Current Assets (CA), Current Liabilities (CL), Gross...

For each transaction below, write the net effect on Current Assets (CA), Current Liabilities (CL), Gross Profit (GP), Net Income Before Taxes (NIBT), and Cash flows from operating activities (CFO). Write 0 for no effect and use negative numbers to indicate reductions in accounts or cash outflows. Assume warranty expenses are recognized in COGS and bad debt expenses are recognized in SG&A.

Transaction

CA

CL

GP

NI (pretax)

CFO

Recognize bad debt expense of $85

Write off $22 of Accounts Receivable

Recognize warranty expense of $35

Pay $15 to satisfy warranties previously accrued

Pay $200 for the next 4 months’ rent (not this month)

Recognize $50 of rent expense (previously paid)

Purchase $99 of inventory on account

Collect $72 of Accounts receivable

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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