If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change? HOTEL Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In2022, HOTEL decides to increase its estimate to 2%. If the new rate had been used in prioryears, cumulative bad debts expense would have been P380,000 instead of #285,000. In 2022,bad debts expense will be P120,000 instead of P90,000.

Name: If HOTEL’s tax rate is 30%, what amount should it report as bad debts
Uploaded: 2022-11-23T13:49:29.000Z
Channel: Bartleby
Description: If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change? HOTEL Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In2022, HOTEL decides to increase i

Solution Introduction When there is change in the accounting estimate the effect of the change shall…

Answered: If HOTEL’s tax rate is 30%, what amount…

Business

Accounting

If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The following information is provided in the 2021 annual report to shareholders of…

A: Lets discuss formula for missing figure.Inventory turnover ratio = Cost of goods sold/Average…

Q: Dwight’s Trophy Shop is considering the following accounting changes:a. Increase the allowance for…

Q: Part B: ANALYSIS OF RECEIVABLES METHOD Assume that River Corporation instead uses the analysis of…

A: Bad Debt Expense: Bad debts are accounts receivable that a company does not expect to collect and…

Q: What is a meaning of decrease in accounts receivable of $16,000 for the year ?

A: Accounts receivable is an amount receivable from debtors.

Q: Use the following information to answer this question. Windswept, Incorporated 2022 Income Statement…

A: Net Income = ni = $567 millionCommon Stock = cs = $2900 millionRetained Earnings = re = $710 million

Q: Use the following information for Taco Swell, Incorporated, (assume the tax rate is 21 percent):…

A: Income and balance sheet statements:

Q: Espana Van Conversions had credit sales of $2,000,000 during Year 1. On 12/31/Year 1, the balance in…

A: Income statement is the one which is prepared by the entity for the purpose of determining the net…

Q: (a) Notes receivable (b) Accounts receivable (c) Retained earnings (d) Sales (e) Operating expenses…

A: Since you have posted a question with multiple sub-parts we will do the first three sub-parts for…

Q: Which of the following is a true statement about a company that uses the allowance method? Multiple…

A: The company makes sales for cash and accounts as well. The company making sales on account faces bad…

Q: Required information [The following information applies to the questions displayed below.] Selected…

A: Income Statement - An income Statement is a financial statement that includes Revenue earned and…

Q: es, such as paying a fee to an investment manager, generally are deductions from adjusted gross…

A: Investment refers to the form of securities or assets a company has bought in order to create an…

Q: a. Prepare an income statement for 20XY. (Input all answers as positive values.) Income Statement…

A: Income statement is one of the main financial statements of a company. Income statement shows the…

Q: One major difference between deferral and accrual adjustments is: Multiple Choice accrual…

A: Correct answer is accounts affected by an accrual adjustment always go in the same direction(i.e.,…

Q: Ludwig Company's prepaid rent was $9,000 at December 31, 2020, and $13,000 at December 31, 2021.…

A: Cash flows from operating activities: It is a section of the Statement of cash flow that explains…

Q: The gearing of a JK plc has reduced from 45% in 2020 to 37% in 2021. Answer TRUE or FALSE to…

A: The concept of gearing refers to the use of debt in the overall capital structure. It is also known…

Q: a. Interest revenue b. Depreciation expense-Equipment c. Loss on sale of equipment d. Accounts…

A: Income from operations is the amount which is calculated by deducting all expenses and losses from…

Q: ''liabilities, current'' and ''account payable'

A: Liabilities, current: Current liabilities represent the obligation of the company that is required…

Q: By what percentage can Hee-Hee Systems, Inc.'s operating profit fall before its operating profit is…

A: interest earned ratio =EBIT/interest 3=EBIT/interest EBIT =3 × interest

Q: What is the NET EFFECT of the errors in PERFECT’s 2020 net income?

A: The solution has been provided for the question which has been sought to be answered which is the…

Q: For the purpose of classifying liabilities as current or noncurrent, the term operatingcycle refers…

A: Operating cycle: The sequence of activities which includes the investment of cash to purchase goods,…

Q: State the effect the following situation would have on the amount of annual net income reported for…

A: Unearned Revenue is money received from customer for which money has received but product/services…

Q: Momentum Products Incorporated just recorded an adjusting journal entry for the current year's…

A: Journal entry for recording the estimated bad debts increases the allowance for doubtful accounts.…

Q: Fill in the missing numbers for the following income statement. (Do not round intermediate…

A: To calculate the Operating Cash Flow (OCF), we use the formula:OCF = EBIT(1 - Tax rate) +…

Q: Sally Goodenough owes ABC Company $100. ABC has decided that Sally is not going to pay them. ABC…

A: The company makes sales on cash as well as sales on account to increase sales by attracting more…

Q: Polis Corp.'s trial balance at December 31, 2020 is properly adjusted except for the income tax…

A: Net income is the difference between total revenue and total expenses of the business.The retained…

Q: As a company, to minimize the present worth of taxes paid to the federal government, use longest…

A: Tax: Tax is a financial charge imposed by the county's government on the income of the person, and…

Question

Practice Pack

OFFON

If HOTEL’s tax rate is 30%, what amount should it report as bad debts expense in the income statement as an effect of change?

HOTEL Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In
2022, HOTEL decides to increase its estimate to 2%. If the new rate had been used in prior
years, cumulative bad debts expense would have been P380,000 instead of #285,000. In 2022,
bad debts expense will be P120,000 instead of P90,000.

Definition Definition Receivable amount that a company is owed, but did not receive, and which may not be receivable in future.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

Includes step-by-step video

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Learn your way

Includes step-by-step video

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Alpha Gym allows services to be on account to loyal customers. The unadjusted Accounts Receivable at the end of the year amounts to ₱120,000 and unadjusted Allowance for doubtful accounts amounts to ₱ 5,000. Service revenue for the year amounted to ₱ 1,250,000. If Alpha Gym estimates 2% of revenue as bad debts, what is the net realizable value of the receivables which should be presented in the statement of financial position?
The company estimates 1% of sales revenue should be used to estimate for bad debt expense. what is the amount and what accounts
For the items listed below, indicate how each should be reported in the financial statements. Use the following letter code for your selections: a. Continuing operations b. Discontinued operations c. Prior period adjustment 1. The percentage of estimated bad debts was increased from 1% to 2%, thus increasing bad debt expense. 2. Obsolete inventory was written off. 3. Investments were sold for less than cost. 4. It was discovered that dividend revenue was inadvertently omitted from last year’s income statement. 5. The company sold one of its warehouses at a loss. 6. Litigation with the federal government related to income taxes of three years ago was settled. The company is continually involved in various adjustments with the federal government related to its taxes. 7. A component of the business was disposed of at a loss. 8. The company neglected to record depreciation expense on some assets in the previous year. 9. All production in the United States was…
In order to generate interim financial reports that contain a reasonable portion of annual expenses, which of the following statements is true? a. an allocation of a portion of an annual bonus would be made as an interim adjustment b. any adjustments for inventory shrinkage would be deferred to year end c. the allowance for uncollectible accounts receivable will be revised at year end d. None of the above are true