The turnover in a company was $3 million and its debtors were 5% of turnover. The company wishes to have a provision for doubtful debts of 4% of debtors, which would make the provision 33% higher than the current provision. What figure would appear in the profit and loss account?

The turnover in a company was $3 million and its debtors were 5% of turnover. The company wishes to have a provision for doubtful debts of 4% of debtors, which would make the provision 33% higher than the current provision. What figure would appear in the profit and loss account?

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: Denver, Incorporated, has sales of $24 million, total assets of $21.6 million, and total debt of…

A: Solution:- Net income means the net profit earned by a firm on its sales. So, net income = Sales x…

Q: If for the most recent year, a firm's RNOA is 17.5%, its sales were $2,000,000, its asset turnover…

A: Return on operating assets is the return earned over operating assets.

Q: In 2021, Miralku Power Corp had sales of P200 million, and have 5.O inventory turnover ratio. The…

A: Sales = P200 million Inventory turnover ratio = 5.0 Inventory = Sales/Inventory turnover ratio…

Q: How much is the current ratio?

A: Current ratio: The financial ratio which evaluates the ability of a company to pay off the debt…

Q: what is the amount of its sales?

A: We know that Asset Turnover = Sales/Total assets Total debt to Total assets ratio = Debt / Total…

Q: Vigo Vacations has $300 million in total assets, $7 million in notes payable, and $35 million in…

A: Debt ratio: The debt ratio measures the proportion of the asset paid for with debt. It is calculated…

Q: What are the annual sales for a firm with $116,044 in total liabilities, a total debt ratio of 0.48,…

A: Solution: Sales refer to the amount earned by an entity from its operations.

Q: The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The…

A: The objective of the question is to calculate the Times Interest Earned (TIE) ratio for the company.…

Q: In the past year, TVG had revenues of $3.03 million, cost of goods sold of $2.53 million, and…

A: TIME INTEREST EARNED RATIO Times Interest Earned Ratio is the Ratio Between Earning Before…

Q: ABC Company has sales of $500,000, COGS of $250,000, operating expenses of $200,000, net income of…

A: Formula: Times interest ratio = Operating income / interest expense

Q: A company has current liabilities of $500 Million, and its current ratio is 2.0. What is the total…

A: Current Assets is that which shows the assets of the company. It includes the Cash, Cash…

Q: Denver, Incorporated, has sales of $14.2 million, total assets of $11.3 million, and total debt of…

A: Shareholder equity helps investors and other companies in analyzing the growth or financial position…

Q: Waldale Pools has total equity of $289,100 and net income of $64,500. The debt-equity ratio is 0.4…

A: DuPont equation is used to calculate return on equity from profit margin, asset turnover ratio and…

Q: Company A has a debt to equity ratio of 0.55. The company is considering a new plant that will cost…

A: The question is releted to calculation of weighted Average flotation cost. The details are given.

Q: A company recently reported $2100 of sales, $1, 100 of operating costs other than depreciation, and…

A: 1. **Sales Revenue**: $21002. **Operating Costs (Excluding Depreciation)**: $11003.…

Q: A debt-free firm has profit for the year of $210 000, taxes of $55 822.78 and depreciation of $42…

A: Operating cash flow refers to the amount that is generated from day-to-day business operations.…

Q: For the year ended December 31, 2019, Settles Inc. earned an ROI of 9.6%. Sales for the year were…

Q: BSO, Inc., has assets of $600,000 and liabilities of $450,000, resulting in a debt-to-assets ratioof…

A: Debt-to-assets ratio = Total liabilities / Total assets

Q: PAGGYTY Industries has current assets equal to $4 million. The company's current ratio is 2.0, and…

A: Formula: Current ratio = Current Assets / Current liabilities

Q: The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The…

A: The objective of the question is to calculate the Times Interest Earned (TIE) ratio for the company.…

Q: Wims, Inc., has sales of $18.3 million, total assets of $13.3 million and total debt of $4.1…

A: Solution:- Net income means the amount the company is earning its profits ie. Revenues – total…

Q: Gardial & Son has an ROA of 9%, a 4% profit margin, and a return on equity equal to 20%. What is the…

A: Total Asset Turnover - It is ratio that measures how efficiently company uses its assets to generate…

Q: consider a company with ROE of 14.5% and a profit margin of 6.5%. if the total asset turnover is 1.8…

A: Debt equity ratio is a leverage ratio. It gives relative measure of debt to equity. Here Dupont…

Q: A company has a current ratio of 5:1 if the company has ₱200,000 current assets, how much is the…

A: The current ratio is calculated as current assets divided by current liabilities.

Q: Using WACC, ignoring taxes, compute the cost of capital of a company with debt ratio of 0.75:1 and…

A: Debt ratio = 0.75 Equity ratio = 1-0.75 = 0.25 Debt cost = 4% Equity cost = 5%

Q: The Lawrence Company has a ratio of long-term debt to long-term debt plus equity of .34 and a…

A: Profit Margin = Net Profit/Sales So Net Profit = Sales * Profit Margin ROE = Net Profit/Equity So…

Q: Henderson's Hardware has an ROA of 14%, a 6% profit margin, and an ROE of 19%. What is its total…

A: The objective of the question is to calculate the total assets turnover and the equity multiplier…

Q: Last year Vaughn Corp. had sales of $315,000 and a net income of $17,832, and its year-end assets…

A: Du-Pont: A Du-pont analysis is the equation which calculates the return on equity by multiplying net…

Q: Comment on the liquidity of the two companies. Which company has more risk of not satisfying its…

A: Operating Cycle is summation of Inventory Period and Account Receivable Period. That is, the period…

Q: DTO, Inc., has sales of ₱15 000 000, total assets of ₱12.6 million, and total debt of ₱ 5.6 million.…

A: Sales = 15000000 Total assets = 1260000 Total debt = 560000 Equity = Assets - debts = 1260000 -…

Q: Windham Corporation has current assets of $440,000 and current liabilities of $550,000. Windham…

A: The ability of a company to repay short-term loans or those that are due within a year is assessed…

Q: A company borrows 100,000$ and must repay it in a month. What is the effect of this borrowing on the…

A: Net working capital = Current Assets - Current Liabilities

Q: Las year Justine Corp. had sales of P315,000 and a net income of P17,382, and its year-end assets…

A: First we will figure the obligation according to underneath: Obligation to add up to resource…

Q: In a business with an asset turnover rate of 2, the return on assets rate is 30% and the net profit…

A: Net sales refer to the amount of goods sold and services provided by the business less discounts…

Q: enver, Incorporated, has sales of $13 million, total assets of $11 million, and total debt of $6.4…

A: The following equations need to be used to calculate net income,Return on Assets(ROA) and Return on…

Q: Current Ratio of a Company is 2.4: 1 and its Current Liabilities are 2,00,000. Subsequently, it sold…

A: CURRENT RATIOCurrent Ratio is the ratio between current assets & current liabilities. Current…

Q: The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The…

A: The objective of the question is to calculate the Times Interest Earned (TIE) ratio for the company.…

Q: Gardial & Son has an ROA of 11%, a 4% profit margin, and a return on equity equal to 20%. What is…

A: In the given case, we have provided the ROA, Profit margin and the ROE.And, the company's total…

Q: Vigo Vacations has $200 million in total assets, $5 million in notes payable, and $21 million in…

A: The objective of the question is to calculate the debt ratio for Vigo Vacations. The debt ratio is a…

Q: What is the cost of debt if a company has $100,000 of debt with an annual interest rate of 5% and an…

A: Solution:- Calculation of debt as follows under:- Introduction:- Company has debt of $100,000 Annual…

Q: 40. Joel Embi, Inc. has an ROA (return on assets) of 15.2 percent, total assets of $4,500,000 and a…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: Provide Answer

A: To calculate the net income of Recreational Supplies Co., we can use the DuPont formula, which…

Q: Vigo Vacations has S200 million in total assets, $5 million in notes payable, and $25 million in…

A: Financial management consists of directing, planning, organizing and controlling of financial…

Question

The turnover in a company was $3 million and its debtors were 5% of turnover. The
company wishes to have a provision for doubtful debts of 4% of debtors, which would
make the provision 33% higher than the current provision. What figure would appear in
the profit and loss account?
Debit /Credit
$

Expert Solution

This question has been solved!

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

SEE SOLUTION Check out a sample Q&A here

Step 1 Accounting for provision for doubtful debts

VIEW

Step 2 Amount Transferred to profit and loss Account

VIEW

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

The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The company's sales amount to R4 290 000, the tax rate is 40%, and the net profit margin is 3,5%. What is the company's times interest earned ratio? 1. 1, 13 times 2. 4,70 times 3. 5,72 times 4. 7,93 times
An enterprise has total assets turnover of 3.5 times and a total debt to total assets ratio of 70%. If the firm has a total debt of $1,000,000, what is the amount of its sales?
Hydra Corporation has current assets of $1,600,000 and current liabilities of $850,000. If they pay $350,000 of their accounts payable what will their new current ratio be?
Wims, Inc., has sales of $19.9 million, total assets of $14.9 million and total debt of $5.7 million. The profit margin is 12 percent. a. What is the company's net income? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the company's ROA? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) C. What is the company's ROE? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.) Net income a. b. ROA C. ROE % %
Recreational Supplies Co. has net sales of $9,359,409, an ROE of 15.60 percent, and a total asset turnover of 3.48 times. If the firm has a debt-to-equity ratio of 1.23, what is the company's net income?
Oliver Incorporated has a current ratio sales and its current liabilities are $2 million. What is the company's inventory turnover ratio? = 2.6, and a quick ratio equal to 2.2. The company has $4 million in
The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The company's sales amount to R4 290 000, the tax rate is 40%, and the net profit margin is 3,5%. What is the company's times interest earned ratio? 1. 1, 13 times 2. 4 , 70 times 3. 5,72 times 4. 7, 93 times
The Jordan Company has net income of $73, 500, with sales of $3, 159, 155. Total assets are $560,000, total receivable are $84,000, and the debt - equity ratio is 0.65. What is Jordan's ROE
King, Inc. has sales of $6189, total assets of $2805, and a debt to equity (D/E) ratio of 1.6. If the company’s ROE is 13%, what is its net income?
The Digital Warehouse has an outstanding debt of R580 000 with an interest rate of 9, 15%. The company's sales amount to R4 290 000, the tax rate is 40%, and the net profit margin is 3,5%. What is the company's times interest earned ratio? 1. 1, 13 times 2. 4,70 times 3. 5, 72 times 4. 7,93 times
GHIST Co. reported a net income of P2,100,000 for 2020. It incurred operating expenses other than interest expense, at 40% of cost of sales but only 20% of sales. Interest expense is 5% of sales. Purchases is 120% of the cost of sales and ending inventory is twice the beginning inventory. If the company is subject to 30% income tax, how much is the company's sales for the year? *a. P10,000,000b. P12,000,000c. P15,000,000d. P18,000,000e. answer not given