If a company uses the allowance method to account for doubtful accounts, when will the company's equity decrease?
A) At the date a customer's account is written off
B) At the end of the accounting period when an adjusting entry for bad debts is recorded
C) At the date a customer's account is determined to be uncollected
D) When the accounts receivable amount becomes past due
B
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Blockbuster is a video rental and retail chain. Blockbuster is forecasting its financial statements for Year 7. Selected financial information for Year 6 is provided in the table
What is long term debt (the plug variable) for the forecasted year? To forecast current liabilities payable use the percentage of sales method based on Year 6 figures. Assume that no dividends are paid in Year 7. Selected Financial Information Blockbuster Inc ($ '000) Year 6 Forecast Revenue $5,157,600 $5,673,360 Net Income -240,300 -195,733 TOTAL ASSETS $7,752,400 $7,746,790 LIABILITIES AND STOCKHOLDERS' EQUITY Total Current Liabilities 1,268,800 Long Term Debt 734,900 Shareholders' Equity Common Stock 6,075,800 6,075,800 Retained Earnings -327,100 Total Shareholders' Equity 5,748,700 Total Liabilities & Shareholders' Equity $7,752,400 A) $707,803 B) $743,168 C) $793,168 D) $798,143 E) $798,988