Problem 11-24 Changes in costs and weighted average cost of capital [LO11-1] Brook’s Window Shields Inc. is trying to calculate its cost of capital for use in a capital budgeting decision. Mr. Glass, the vice-president of finance, has given you the following information and has asked you to compute the weighted average cost of capital. The company currently has outstanding a bond with a 6.2 percent coupon rate and another bond with a 3.2 percent coupon rate. The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield 7.2 percent. The common stock has a price of $62 and an expected dividend (D1) of $3.30 per share. The firm's historical growth rate of earnings and dividends per share has been 11.5 percent, but security analysts on Wall Street expect this growth to slow to 9 percent in future years. The preferred stock is selling at $58 per share and carries a dividend of $9.75 per share. The corporate tax rate is 30 percent. The flotation cost is 1.9 percent of the selling price for preferred stock. The optimal capital structure is 50 percent debt, 5 percent preferred stock, and 45 percent common equity in the form of retained earnings. a. Compute the cost of capital for the individual components in the capital structure. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.) b. Calculate the weighted cost of each source of capital and the weighted average cost of capital. (Do not round intermediate calculations. Input your answers as a percent rounded to 2 decimal places.)
Answers
The weighted average cost of capital for Brook’s Window Shields Inc is 10.56%.
Brook’s Window Shields Inc. is trying to calculate its cost of capital for use in a capital budgeting decision. The company currently has outstanding a bond with a 6.2 percent coupon rate and another bond with a 3.2 percent coupon rate.
The firm has been informed by its investment banker that bonds of equal risk and credit rating are now selling to yield 7.2 percent. The common stock has a price of $62 and an expected dividend (D1) of $3.30 per share.
The firm’s historical growth rate of earnings and dividends per share has been 11.5 percent, but security analysts on Wall Street expect this growth to slow to 9 percent in future years. The preferred stock is selling at $58 per share and carries a dividend of $9.75 per share. The corporate tax rate is 30 percent.
The flotation cost is 1.9 percent of the selling price for preferred stock. The optimal capital structure is 50 percent debt, 5 percent preferred stock, and 45 percent common equity in the form of retained earnings.
a) To compute the cost of capital for the individual components in the capital structure:
Cost of debt (Kd) = Yield (1 – T) = 6.2% * (1 - 0.3) = 4.34%
Cost of preferred stock (Kp) = Dp / (Pp – F) = $9.75 / ($58 - ($58 * 0.019)) = 17.29%
Cost of common equity (Ke) = D1 / P0 + g = ($3.30 / $62) + 9% = 14.35%
b) To calculate the weighted cost of each source of capital and the weighted average cost of capital:
WACC = WdKd + WpKp + WsKe
Wd = 50%, Wp = 5%, Ws = 45%.
WACC = (0.50 * 4.34%) + (0.05 * 17.29%) + (0.45 * 14.35%) = 10.56%
The weighted average cost of capital for Brook’s Window Shields Inc is 10.56%.
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Related Questions
Executives at Mutual of Omaha would consider which of the following a "Value for Success"?
A) focus on profits
B) focus on hierarchy
C) focus on order
D) focus on customers
E) focus on sales
Answers
Based on Mutual of Omaha's values and mission statement, executives at the company would consider "focus on customers" a "Value for Success."
Mutual of Omaha is a mutual insurance company that provides a range of insurance and financial products to its customers. The company's mission statement emphasizes its commitment to "helping customers protect what they care about and achieve their financial goals," and its values include integrity, excellence, accountability, and respect for customers.
By focusing on customers, Mutual of Omaha aims to build strong relationships with its policyholders and provide them with high-quality, personalized service. This includes listening to their needs, understanding their concerns, and providing them with the information and support they need to make informed decisions about their insurance and financial planning.
In addition to benefiting customers, a focus on customers can also benefit the company itself by promoting customer loyalty, driving repeat business, and enhancing the company's reputation for excellence and integrity.
While profits, hierarchy, order, and sales are all important considerations for a successful business, Mutual of Omaha's values and mission statement prioritize the needs and interests of its customers above all else.
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The application of marketing strategies and practices not for profit but rather to change or create behaviors that have a beneficial impact on targeted individuals or society as a whole is known as
A. product marketing.
B. commercial marketing.
C. online marketing.
D. social marketing.
Answers
Answer:
I'm pretty sure it's b sorry if I'm wrong
Double entry Received commission by Cheque
Answers
Answer:
congratulations sirr
Explanation:
ask any question or queries not other things
sorry if this was hurtful to you
Region Jet has a $51 million liability at December 31, 2021, of which $13 million is payable in 2022. In its December 31, 2021 balance sheet, the company reports the $51 million debt as a: At the beginning of 2021, Angel Corporation began offering a 1-year warranty on its products. The warranty program was expected to cost Angel 3% of net sales. Net sales made under warranty in 2021 were $280 million. Five percent of the units sold were returned in 2021 and repaired or replaced at a cost of $7.0 million. The amount of warranty expense in Angel's 2021 income statement is: In December 2020, Quebecor Printing received magazine subscriptions for 2021 from customers, who paid $440 in cash. What would be the appropriate journal entry for this event in December 2020? United Supply has a $45 million liability at December 31, 2021, of which $9 million is payable in each of the next five years.
Answers
Region Jet's $51M liability is long-term; Angel's 2021 warranty expense is $8.4M; Quebecor Printing's journal entry for subscription receipts is Cash $440, Unearned Revenue is $440; United Supply's $45M liability is long-term.
For the first question, Region Jet reports the $51 million liability as a long-term liability in its December 31, 2021 balance sheet. This is because only $13 million of the liability is payable in 2022, while the remaining $38 million is not due until after 2022.
For the second question, the amount of warranty expense in Angel's 2021 income statement is $8.4 million. This is calculated as 3% of net sales ($8.4 million) minus the cost of repairs or replacements ($7.0 million).
For the third question, the appropriate journal entry for Quebecor Printing's receipt of magazine subscriptions in December 2020 would be:
Cash $440
Unearned Revenue $440
This is because Quebecor Printing has received cash for subscriptions that have not yet been fulfilled, so the cash is recorded as unearned revenue until the magazines are delivered.
For the fourth question, United Supply reports the $45 million liability as a long-term liability in its December 31, 2021 balance sheet. This is because only $9 million of the liability is payable in each of the next five years, while the remaining $6 million is not due until after that time.
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Supply-side policies have proven that smaller government makes the economy more efficient. Select one: True False
Answers
Answer:
The given statement is "False".
Explanation:
Supply-side policies include those strategies that increase the economic ability of an enterprise as well as the ability to manufacture. To increase supply-side efficiency, there are also many specific steps that somehow an authority may undertake. Any strategy that increases the economic capacity of a nation's infrastructure and therefore its ability to transfer should be under the supply-side legal framework.If there’s a demand for watches or electronics, it’s easier for a manufacturing plant to add another shift, flip a switch and and add more," said Tim Woods, an agriculture and business professor at the University of Kentucky. "They can add more almost immediately. What does this mean with regards to the elasticity of supply- is it elastic, inelastic or unit elastic. Please explain your answer.
2. You can’t go to a farmer and tell him, 'We need your cows to start having more babies.' It takes time. What does this imply about the elasticity of supply with regards to beef.
3. Usually higher potato prices provide incentives for farmers to plant more. Not this time, because of how high the costs are…" Has the high cost of potatoes made the supply curve for potato chips more elastic or more inelastic? Briefly explain your answer.
4. analysts say that the combination of low inventories and spare capacity have historically been resolved by sharp price rallies …The difference these days is shale. Last decade’s fracking boom proved there are huge domestic reserves [of oil] that can be tapped quickly by a swarm of producers if the price is right." What does this statement imply about how the "fracking boom" has affected the price elasticity of supply for crude oil?
Answers
The high cost of potatoes makes the supply curve for potato chips more inelastic. Despite the incentive of higher prices, farmers are unable to respond by planting more potatoes due to the high costs involved.
The elasticity of supply measures the responsiveness of quantity supplied to changes in price. In the case of watches and electronics, the statement suggests that the supply is elastic. The manufacturing plant can easily add another shift or increase production to meet the increased demand, indicating that the supply can adjust quickly and substantially in response to price changes.
The statement regarding farmers and cows implies that the supply of beef is relatively inelastic. Breeding and raising more cows to increase the supply of beef is a time-consuming process, indicating that the supply cannot be easily adjusted in the short term. Therefore, the supply of beef is less responsive to changes in price, resulting in a relatively inelastic supply curve.
The high cost of potatoes mentioned in the statement has made the supply curve for potato chips more inelastic. Despite the incentive of higher prices, farmers are unable to respond by planting more potatoes due to the high costs involved, such as labor, equipment, and inputs. This indicates that the supply of potato chips is less responsive to price changes, leading to a more inelastic supply curve.
The "fracking boom" has increased the price elasticity of supply for crude oil. The availability of huge domestic reserves and the technology of fracking have made it easier and quicker for oil producers to tap into these reserves when the price is favorable. This means that the supply of crude oil has become more elastic, as a larger number of producers can enter the market and increase production rapidly in response to price increases, thereby moderating the impact on price.
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if there are few true monopolies, what can we learn from studying that market structure?
Answers
Studying markets with few true monopolies can provide valuable insights into the functioning of competitive market structures.
What insights can we gain from studying markets with limited monopolies?
While true monopolies may be rare, studying markets with few monopolistic entities can offer important lessons regarding the dynamics and efficiency of competitive market structures. By examining such markets, we can gain insights into the impact of market competition, the role of innovation, the behavior of firms, and the effects of government regulations.
In markets with limited monopolies, where a small number of dominant firms exist, competition may still exist, albeit to a lesser degree than in perfectly competitive markets. Analyzing these markets allows us to understand how firms in such positions behave, how they interact with competitors and customers, and how their market power influences prices, quantity supplied, and overall market outcomes.
Furthermore, studying these markets sheds light on the importance of innovation and technological advancements. Firms facing limited competition often strive to differentiate their products or services through innovation, quality improvements, or cost reductions, aiming to attract customers and maintain a competitive edge. This competition-driven innovation can spur economic growth and benefit consumers through better products and lower prices.
Additionally, studying markets with limited monopolies helps policymakers evaluate the effectiveness of regulations designed to promote competition and prevent anti-competitive behavior. By understanding the behavior of firms in such markets, policymakers can develop informed policies to safeguard competition, promote fair market practices, and protect the interests of consumers.
In conclusion, although true monopolies may be uncommon, studying markets with few monopolistic entities provides valuable insights into the functioning of competitive market structures. It helps us understand the impact of competition, the role of innovation, the behavior of firms, and the effectiveness of regulations. These insights can inform policymakers, guide business strategies, and contribute to the overall understanding of market dynamics and efficiency.
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PLEASE HELPPPPP due by tomorrow pleaseeee
write a one-page report that details the individual’s job position, education, and career training, current job responsibilities, and what the person enjoys the most about the job position.
Answers
The job description contains sufficient information to describe major responsibilities and essential functions as they exist today. They provide the information necessary to classify the position, not the person; thus they are “incumbent neutral” and not based on any specific quality of an incumbent (such as knowledge, skills, abilities, performance, dedication, loyalty, years of service, or degree). The document should not include every detail of how and what work is performed so that it remains useful even when minor changes occur. Job descriptions can be written as a joint effort between supervisor and employee, but the supervisor must approve.
The _____ summarizes the financial results of a firm's operations over a given period of time.
Answers
The financial statement that summarizes the financial results of a firm's operations over a given period of time is called the income statement.
1. Revenue: This represents the total amount of money earned by the company from its sales . 2. Cost of Goods Sold (COGS): This includes the direct costs associated with producing . 3. Gross Profit: It represents the profit generated solely from the company's core operations before considering other expenses. 4. Operating Expenses: These are the costs incurred to run the day-to-day operations of the company.
5. Operating Income: It represents the profit generated from the company's core operations after considering all operating expenses. 6. Other Income and Expenses: This section includes any additional sources of income. 7. Net Income: This is calculated by subtracting the other income.
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Implicit costs are:A) regarded as costs by accountants but not by economistsB) payments that a firm makes to other firms or individuals who supply resources to itC) nonexpenditure costsD) costs that proportionately with output
Answers
Implicit costs are:
option C). non expenditure costs.
How Do Implicit Costs Work?
Any cost that has already occurred but isn't necessarily displayed or reported as a distinct item is known as an implicit cost. It stands for an opportunity cost that develops when a business devotes internal resources to a task without receiving any direct payment for the usage of such resources. This implies that there is never a financial transaction when a corporation allocates its resources since it always forfeits the chance to profit from the usage of those resources elsewhere. Simply put, there is an implicit cost associated with using an object as opposed to renting or purchasing it.
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suppose you deposit $2,500 today in a savings account at 3.5% interest compounded annually. assuming no withdrawal, how much would you have at the end of 10 years?
Answers
By assuming no withdrawal we get $3526.50 after 10 years.
We have:
N = 10
PV = 2500
R = 3.50%
We can use the following formula to compute FV:
FV = PV x (1+r)^n
= 2,500 x (1+0.035)^10
= 2,500 x 1.410598761
= $3526.50
A withdrawal includes getting rid of the budget from a financial institution account, monetary financial savings plan, pension, or consideration. In a few instances, situations need to be met to withdraw the budget without penalty, and a penalty for early withdrawal typically arises whilst a clause in a funding agreement is broken.
To withdraw cash from your account, you want to fill in a “Withdrawal slip”. Like a Deposit slip, a Withdrawal slip additionally asks for similar information – your call, account variety, the amount that your choice to withdraw, date, and so forth.
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In MS Word, which items are you able to format?
(What types of things do/can we format?)
A: Text
B: Table
C: Menu
D: Both A & B
Answers
Answer:
Explanation:
both A & B
When fire alarm sounds. Why should you evacuate children immediately even if you do not see flames?
Answers
Answer: because even if there is no fire there could be an explosion, fire and gasoline WILL make an explosion. So Basically it can start with fire but soon turn into an explosion. If it's a fire DRILL then it's for practice if that actually does happen.
Why is it virtually important to understand the fees your bank may charge on your checking account
Answers
Answer:
Explanation:
When a bank lends you money, it charges interest on the loan. When you open a deposit account, such as a checking or savings account, there are fees for that as well. It's important to know all the fees your bank charges, as well as how to reduce or eliminate as many of them as possible.
1. Clark is the kind of manager that values input from his team and likes to involve them in the decision-making process. He prefers to avoid micromanagement and works hard to make
sure that his employees are well taken care of and empowered to make decisions. Based on this, what kind of manager is Clark?
reductive manager
exploitative manager
о
confrontational manager
democratic manager
Answers
Answer:
democratic manager
Explanation:
A democratic manager invites participation from members in the decision-making process. In this leadership style, every member is encouraged to contribute their ideas and opinions. Members' involvement leads to increased feelings of recognition and satisfaction.
Democratic leadership is also referred to as participative leadership. It contrasts with autocratic leadership, where the leader makes all the decisions without consultation.
Soft skills 2 sentences that will help
Answers
Answer:
Include the terms most closely related to the job in your resume, especially in the description of your work history. Highlight Skills in Your Cover Letter: You can incorporate soft skills into your cover letter. Include one or two of the skills mentioned here, and give specific examples of instances when you demonstrated these traits at work
Explanation:
What is reality???????????????????????????????
Answers
Answer:
Reality is a state of consciousness and awareness whereby one can feel and comprehend his himself and his mind and his soul to live in.WARNING: if this is your exam question, please you might not pass with this answer. lolHope this helps
Good luck ALWAYS ✅.
Which of the following statements about a strong-culture company is false?
A) Decisive leadership on the part of top
executives, an industry-leading market share, and strict enforcement of long-standing company policies are all important traits of a strong culture company.
B) In strong culture companies, senior managers make a point of reiterating key principles and core values to organization members; more importantly, they make a conscious effort to display these principles and values in their own actions and behavior—they walk the talk.
C) Continuity of leadership, small group size, stable group membership, geographic concentration, and considerable organizational success all contribute to the emergence and sustainability of a strong culture.
D) In a strong-culture company, culturally-approved behaviors and ways of doing things are nurtured while culturally-disapproved behaviors and work practices get squashed.
E) Senior managers insist that company values and business principles be reflected in the decisions and actions taken by all company personnel; moreover, individuals encounter strong peer pressures from
co-workers to observe culturally-approved norms and behaviors.
Answers
Answer:
A. Decisive leadership on the part of top executives, an industry-leading market share, and strict enforcement of long-standing company policies are all important traits of a strong culture
Explanation:
Option A is the correct answer to this question.
The company's culture are the beliefs that it holds which influences every area of a business. When starting a business or running an existing one, you company's culture that is essential to the overall success and growth of your company. Strong company cultures are result oriented
A video game system is on sale for 25% off its original price. If the original price is $200, how much money will be saved?
Answers
Answer:
$50
Explanation:
25% = 1/4
200 / 4 = 50
50*3=150, which is 25% off.
What is the most difficult part of being a leader?
Answers
Answer:
Guiding everyone else to success
Explanation:
The hardest part about being leader is to lead people with different personalities to work together for the achievement of the objective.
What are the difficulties of being a leader?A good leader is only good as long as he can unite people and motivate them to work together for one purpose.
The hardest things to manage as a leader is to handle the conflict among the employees by avoiding biasness or favoritism.
One of the toughest aspects of leadership is delegating authority as people are very complicated.
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alright, anyone got any chocalate
Answers
Answer:
No, I don't really like chocolate.
Explanation:
Answer:
Yes.
Explanation:
But sadly I can't give them away.
#teamtrees #WAP (Water And Plant)
Manton Manufacturing applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Bear product. Estimates for this order include: Direct materials of $79,000; 680 direct manufacturing labor-hours at $25 per hour; and a 25% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this special-order total ________.
Answers
Answer: $40,800
Explanation:
Given the following :
Indirect cost rate = $60 per direct manufacturing labor-hour
Total direct manufacturing labor-hour of special order = 680
Thus means that the Indirect cost or overhead associated with the manufacture of the special order is :
(Total direct manufacturing labor-hour × Indirect cost per direct manufacturing labor-hour)
= (680 labor-hours × $60)
= $40,800
Therefore, Manufacturing overhead cost estimates for this special-order total is $40,800.
Type the correct answer in the box. Spell all words correctly.
Ideally, what should more than one member of the family contribute to for a better financial position?
A family can have more than one person contributing to the household _______
for a better financial position.
Answers
A family can have more than one person contributing to the household income for a better financial position.
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Step 3: Creating a Balanced Family Budget
a) Search for a "family budget estimator" and calculate the monthly expenses for a family living
in your city.
Insert a screenshot of the calculator you used, as well as all of the information you entered
into it. If you are unable to insert a screenshot, then list the information below. (10 points)
b) State the minimum monthly income and hourly wage per worker needed to cover monthly
expenses for the family you used in part a. Then, explain how to calculate the hourly wage
Show we’re u found your information
Answers
The family budget calculator use is attached accordingly. See relevant definition below.
What is the minimum monthly income and hourly wage per worker required to cover the monthly expenses indicated in the budget?The total budget indicated is $7,304. Hence to cover for the above expenses, one would need to work for at least 8 hours per day, and 5 days a week at the minimum income wage of $50 dollars/Hour.
This translates to:
50 x 8 x 20
= $8,000
What exactly is a family budget?A family budget is a plan for your household's incoming and outgoing funds for a specific time period, such as a month or year.
What is the definition of a Family Budget Calculator?The Family Budget Calculator calculates the amount of money required for a family to maintain a modest but decent level of life.
The budgets project community-specific expenses for ten different family types (one or two adults with zero to four children) across all counties and metro regions in the United States.
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Whom does the government and public administration career clutter serve?
A. Private citizens
B. Army and navy
C. Government employees and the military
D. National security and the foreign service
Answers
Answer:
it is A. Private citizens
Explanation:
edge 2020 :)
Note that common tasks are listed toward the top, and less common tasks are listed toward the bottom. According to O*NET, what are some common tasks performed by Financial Analysts? Check all that apply. drawing charts and graphs to illustrate reports comparing insurance policies to determine the best choice informing investment decisions by analyzing financial information investigating cases of fraud helping families create realistic budgets
Answers
Answer:
A and C
Explanation:
BECAUSE I AM BIG BRAIN
Answer:
create client presentations of plan details
advise clients on aspects of capitalization, such as amounts, sources, or timing
Explanation:
An outward shift of the production possibilities curve demonstrates:
(a) Economic growth
(b) Inflation
(c) Unemployment
(d) Decreased productivity
Answers
An outward shift of the production possibilities curve (PPC) indeed demonstrates economic growth. It signifies an an outward shift of the production possibilities curve is indicative of economic growth, reflecting the economy's ability to produce more goods and services.
The PPC represents the maximum combinations of two goods that an economy can produce given its available resources and technology. When the PPC shifts outward, it means that the economy is capable of producing more of both goods or achieving higher levels of production for at least one good without sacrificing the production of the other.
Several factors can cause an outward shift of the PPC, reflecting economic growth. These factors include:
1. Investment in new technology and capital goods: This leads to a more efficient production process, increasing output and expanding the economy's productive capacity.
2. Development of a highly skilled workforce: Enhancing the skills and knowledge of the workforce increases productivity, allowing for greater output and economic growth.
3. Discovery of new natural resources: Access to previously untapped resources expands the economy's resource base, enabling higher levels of production.
4. Increase in the number of workers or labor force participation rate: A larger labor force contributes to higher output and economic expansion.
5. Development or expansion of industries: The emergence of new industries or the growth of existing ones leads to increased production and economic growth.
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Clare fran is buying a new chevy volt for $39,000 with an interest charge of $4800. she sets up a loan, and repays it over 25 equal monthly payments for 25 months. what will be her monthly payment
Answers
Clare Fran's monthly payment for the loan will be $1,752.
Clare Fran is buying a new Chevy Volt for $39,000 with an interest charge of $4,800. To determine her monthly payment, we first need to add the interest charge to the cost of the car:
$39,000 + $4,800 = $43,800
Now, we'll divide the total amount to be repaid ($43,800) by the number of equal monthly payments (25 months):
$43,800 ÷ 25 = $1,752
So, Clare Fran's monthly payment for the loan will be $1,752.
We can also use a loan payment formula, such as the PMT function in Excel, to calculate the monthly payment.
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Do not enter collar signs or commas in the input boxes. a) Use the year-end balances reported on the balance sheet and the aging schedule shown below to calculate the allowance for doubtful accounts. Prepare the journal entry to record bad debt expense for the year: Prepare the journal entry to record bad debt expense for the year: b) Assume instead that Rainbow Appliances used the income statement approach for estimating bad debt. If historical data indicates that approximately 1% of net credit sales are uncollectible, what amount is expected to be uncollectible? Uncollectible amount: Using the information provided at the beginning of the question, what is the balance in the allowance for doubtful accounts after the adjustment using the income statement approach? Allowance for doubtful accounts:
Answers
a. The journal entry to record bad debt expense for the year would be Debit: Bad Debt Expense and Credit: Allowance for Doubtful Accounts.
b. We would need the specific information or adjustments made to the allowance account during the year to determine the balance accurately.
a) To calculate the allowance for doubtful accounts, we need to use the aging schedule and the year-end balances reported on the balance sheet.
Aging Schedule:Current: $400,000
1-30 Days: $50,000
31-60 Days: $20,000
Over 60 Days: $10,000
Total Accounts Receivable: $480,000
Based on the aging schedule, we can estimate the percentage of uncollectible accounts for each category. Let's assume the following percentages:
Current: 1%
1-30 Days: 5%
31-60 Days: 15%
Over 60 Days: 50%
Now we can calculate the allowance for doubtful accounts:
Allowance for Doubtful Accounts = (Current * 1%) + (1-30 Days * 5%) + (31-60 Days * 15%) + (Over 60 Days * 50%)
Once the allowance for doubtful accounts is calculated, the journal entry to record bad debt expense for the year would be:
Debit: Bad Debt Expense
Credit: Allowance for Doubtful Accounts
b) If Rainbow Appliances uses the income statement approach and historical data indicates that approximately 1% of net credit sales are uncollectible, we can estimate the expected uncollectible amount.
Expected Uncollectible Amount = Net Credit Sales * 1%
To calculate the net credit sales, we need additional information. If you provide the net credit sales for the year, we can calculate the expected uncollectible amount.
Regarding the balance in the allowance for doubtful accounts after the adjustment using the income statement approach, we would need the specific information or adjustments made to the allowance account during the year to determine the balance accurately.
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Which of the following is true of eye contact during a sales call?
A) Looking at papers in your briefcase indicates to the customer that you are listening.
B) Nodding constantly indicates sincere interest in a customer.
C) Eye contact is one of the best ways to say "I'm listening."
D) A fleeting glance at notes is insulting to the prospect.
E) A prolonged, direct stare is reassuring.
Answers
C) Eye contact is one of the best ways to say "I'm listening."
Why is eye contact important during a sales call?Eye contact plays a crucial role during a sales call as it conveys active engagement and attentiveness to the customer. Maintaining eye contact demonstrates that you are focused on the conversation and interested in what the customer is saying.
It creates a sense of connection and trust, allowing the customer to feel heard and valued. By making eye contact, you also signal that you are open to receiving information and feedback, fostering effective communication.
However, it is important to strike a balance with other non-verbal cues. Constantly nodding (answer B) may come across as insincere or disingenuous, so it is essential to nod selectively and naturally when appropriate.
Looking at papers in your briefcase (answer A) may indicate that you are distracted or disinterested, rather than actively listening. A fleeting glance at notes (answer D) can be acceptable if done sparingly and respectfully, as it can demonstrate preparedness and a desire for accuracy. On the other hand, a prolonged, direct stare (answer E) may make the customer uncomfortable and should be avoided.
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