Analyzing and Reporting Receivable Transactions and Uncollectible Accounts Using Percentage- of-Sales Method to Estimate Bad Debt Expense

At the beginning of the year, Penman Company had the following account balances.

Accounts receivable...................... $356,000

Allowance for uncollectible accounts......... 21,400

During the year, Penman’s credit sales were $2,008,000, and collections on accounts receivable were $1,963,000. The following additional transactions occurred during the year.

Feb. 17 Wrote off Bava’s account, $8,200.

May 28 Wrote off Reed’s account, $4,800.

Dec. 15 Wrote off Fischer’s account, $2,300.

Dec. 31 Recorded the bad debts expense assuming Penman’s policy is to record bad debts expense as 0.9% of credit sales. (Hint: The allowance account is increased by 0.9% of credit sales

regardless of write-offs.)

Compute the ending balances in accounts receivable and the allowance for uncollectible accounts. Show how Penman’s December 31 balance sheet reports the two accounts

1. Where is nitrogen found in living organisms?
2. How do living organisms uptake nitrogen?
3. What percentage of the atmosphere is nitrogen?
4. Describe the nitrogen fixation process. Be sure to include nitrate, nitrogen gas, nitrite, and ammonium.
5. What is assimilation?

Express monetary answers to the nearest whole dollar. Express percentage answers to the nearest hundredth

22.Tiffanywould like to buy a delivery vehicle for hersmall business. Shecan afford to make a down payment of $7,500 and pay monthly (end-of-month) payments of $1,350. If the term is 48months and the loan rate is 5.24 percent(APR), then what is the maximum that Tiffanycan pay for the delivery vehicle?

23Geraldpurchases a house for $250,000 by getting a mortgage for $225,000 and paying a down payment of $25,000. It is a 20-year mortgage with a 4.92 percent interest rate and Geraldmakes a payment at the end of each month. Suppose the house appreciates at a 2.25 percent rate per year. If equity is the value of the house minus how much is owed on the house, then how much equity does Geraldhave at the end of ten years?

Today, you sold 1 share of Litchfield Design stock. The percentage return over the past quarter (from 3 months ago to today) for these shares was 9.86 percent. You purchased the shares 3 months ago at a price of 111.98 dollars per share. You just received 6.36 dollars in dividends. What was the price of the stock when you sold it?

1,Ceteris paribus, which countries would you expect to rely MORE on foreign trade as a percentage of their economic activity?

A larger countries, like the US.

B smaller countries, like Sweden

2. An economy’s net exports always equals (choose one or both)

A the difference between its saving and its investment

B its trade balance

3. An economy’s trade balance always equals (choose one or both)

A net capital outflow

B net foreign investment

Question 3: The Bank of Canada once again reduced its key rate by 0.5 percentage point on March 24, aligning with the United States. What are the elements of aggregate demand that the Bank of Canada hopes to stimulate through this monetary policy?

The consumer price index increases from 129.7 to 136.4. By how much percentage wise should your employer increase your wage if he wants to keep your purchasing power constant? Round to two decimal places and do not enter a % sign.

If the Federal Reserve were to purchase government bonds in the open market, we would expect interest rates in the economy to (increase/decrease)_______ and therefore spending in the future is likely to (increase/decrease)_______.

Determining Cost Relationships

Midstate Containers Inc. manufactures cans for the canned food industry. The operations manager of a can manufacturing operation wants to conduct a cost study investigating the relationship of tin content in the material (can stock) to the energy cost for enameling the cans. The enameling was necessary to prepare the cans for labeling. A higher percentage of tin content in the stock increases the cost of material. The operations manager believed that a higher tin content in the can stock would reduce the amount of energy used in enameling. During the analysis period, the amount of tin content in the stell can stock was increased for every month, from April to September. The following operating reports were available from the controller:

Differences in materials unit costs were entirely related to the amount of tin content. In addition, inventory changes are negligible and are ignored in the analysis.

A) Calculate the Total cost per unit for each month. Round your answers to the nearest cent

B) Interpret your results

The calculations reveal that the tin content and energy costs are _________ related. That is, as the materials cost increased due to higher tin content, the energy costs ________ by more. Thus, the recommendation should be to __________ raw can stock with the tin content at the $0.33-per-unit level (September level). This is the material that __________ the total production cost for this set of data. Additional data could be used to determine the optimal tin content or the point where energy cost savings fail to overcome additional material costs.

For each of the problems below, provide detailed working.

Part I A business investor is considering a new food venture on an isolated construction site. He has been given permission to operate on the site for a period of 15 years. He has compiled the following information about the new proposed business venture: Startup equipment: $450,000 Working capital required for new kitchen: $105,000 Expected annual cash inflow from food sales: $375,000 Expected annual cash expenses associated with the new business: $250,000 Restaurant upgrade required after 5 years: $55,000 At the end of the 15-year period, the equipment would be sold for its salvage value of $125,000. The company is required to pay taxes at the rate of 30%. It will calculate depreciation using the straight-line method, but it will not use the salvage value when computing depreciation for tax purposes.

Required:

a) Assuming a 15% after-tax cost of capital, compute net present value (NPV) of the new venture. – 20 marks

b) On the basis of your computations should this business be opened or not. – 10 marks You must show all working