our financial records have been destroyed. But your accountant has maintained some statistical data as follows • Cost of goods sold was $2,000,000. • Administrative expenses were 20% of the cost of sales but only 10% of sales. • Selling expenses were 150% of administrative expenses. • Bonds payable were $1,000,000, with an average interest rate of 11%. • The tax rate was 48%. • 50,000 shares of common stock were outstanding for the entire year. What is the amount of sales realized? $2,000,000 $400,000 $4,000,000 Cannot be determined with the information provided.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Your financial records have been destroyed. But your accountant has maintained some statistical data as follows
• Cost of goods sold was $2,000,000.
• Administrative expenses were 20% of the cost of sales but only 10% of sales.
• Selling expenses were 150% of administrative expenses.
• Bonds payable were $1,000,000, with an average interest rate of 11%.
• The tax rate was 48%.
• 50,000 shares of common stock were outstanding for the entire year.
What is the amount of sales realized?$2,000,000$400,000$4,000,000Cannot be determined with the information provided.
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