Collision Corporation Data for Collision Corporation for the year ended December 31, 2012, are presented below. Credit Sales $2,000,000 Sales returns and allowances 40,000 Accounts receivable (December 31, 2012 ) 610,000 Allowance for bad debts (Before adjustment at December 31, 2012 ) 15,000 Estimated amount of uncollected accounts based on aging analysis 55,000 Refer to the information provided
for Collision Corporation. If Collision estimates its bad debts at 2% of net credit sales, what amount will be reported as bad debt expense for 2012?
A) $40,000
B) $39,200
C) $24,200
D) $25,000
B
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There are two ice cream stands at the same intersection. In order to protect their businesses, the two owners agree that they will charge their customers the same prices for an ice cream cone. What type of horizontal restraint is this?
A. This is not a horizontal restraint. B. Price-fixing. C. Boycott. D. Market allocation.
Ellis Retail is considering an investment in a delivery truck. Ellis has found a used truck that he can purchase for $8,000 . He estimates the truck would last six years and increase his store's net cash revenues by $2,000 per year. At the end of six years, the truck would have no salvage value and would be discarded. Ellis will depreciate the truck using the straight-line method. Refer to Ellis
Retail. What is the accounting rate of return on the truck investment (based on average profit and average investment)? a. 25.0% b. 50.0% c. 16.7% d. 8.3%
Palming off is a tort in which one company sells its imitation product by leading buyers to believe it is a different product or the "real thing."
Indicate whether the statement is true or false
Alan Freeman and Bill Freeman, brothers, operated a residential construction firm. There were three divisions of the firm: single-family homes, townhomes, and custom homes. Alan did not enjoy the demands of custom home buyers and Bill did not enjoy the cookie-cutter work of the other divisions. The brothers agreed to split the business with Bill assuming the responsibilities and contracts of the
custom home division and Alan handling the remaining divisions. Alan told Bill he could continue to use the company offices until he was able to find offices of his own. Bill met his clients at the company offices, used the plans of the company and even continued to use the company stationery. Three months later Bill left town, leaving custom homes unfinished and taking the deposits of three customers with him. The customers have sued Alan. Which of the following statements is true? A) Alan is not liable since the relationship had been terminated. B) Alan is liable because of apparent authority. C) Bill is not liable because he was Alan's agent. D) None of the above