Owens Company uses the direct write-off method of accounting for uncollectible accounts receivable. On December 6, Year 1, Owens sold $6,300 of merchandise to the Valley Company. On August 8, Year 2, after numerous attempts to collect the account, Owens determined that the account of the Valley Company was uncollectible. a. Prepare the journal entry required to record the transactions on August 8.b. Assuming that the $6,300 is material, explain how the direct write-off method violates the expense recognition principle in this case.
What will be an ideal response?
a.
| Aug. 8 | Bad Debts Expense..................................... | 6,300 | ? |
| ? | Accounts Receivable - Valley Company | ? | 6,300 |
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A) economic infrastructure B) competitive intelligence C) demographic D) perfect competition E) business cycle
Lex Company produces products that it sells for $10 each. Variable costs per unit are $4, and annual fixed costs are $120,000.Required:Use the equation method to determine the break-even point in units and dollars.
What will be an ideal response?
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