At the beginning of 2017, Brady, Inc has the following account balances
Accounts Receivable $43,000 (Debit)
Allowance for Bad Debts $8,000 (Credit)
Bad Debts Expense $0
During the year, credit sales amounted to $840,000. Cash collected on credit sales amounted to $790,000, and $17,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 2.5%. The amount of bad debts expense for 2017 is ________.
A) $21,000
B) $41,825
C) $17,000
D) $12,000
A
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Park, Inc purchased merchandise from Jay Zee Music Company on June 5, 2016 . The goods were shipped the same day. The merchandise's selling price was $15,000 . The credit terms were 1/10, n/30 . The shipping terms were FOB shipping point. Park received the merchandise on June 10, 2016 . Park paid the amount due on June 13, 2016. Park uses the periodic inventory system. What effect does recording
the purchase of merchandise on June 5, 2016 have on Park's accounting equation? a. Liabilities and stockholders' equity decrease. b. Liabilities increase and stockholders' equity decreases. c. Assets and liabilities increase. d. Assets and stockholders' equity increase.
Which of the following variations of the retail inventory method would generally result in the lowest cost-to-retail ratio in a period of declining prices?
A) FIFO B) LIFO C) average cost D) lower of average cost or market