Answer:
$0.8
Explanation:
Data provided in the question:
Number of orders each hour = 15
Number of orders processed each hour = 20
Wages = $7.50/hr
Taxes = $4.50/hr
Now,
Total cost per hour = $7.50 + $4.50 = $12
Therefore,
By installing touch screen, Taco Casa can save $12 per hour
but touch screen can accommodate only 15 orders
Thus,
Per order opportunity cost of a touch screen
= Total amount saved ÷ Number of Orders accommodated by touch screen
= $12 ÷ 15
= $0.8
You are considering adding a microbrewery on to one of your firm's existing restaurants. This will entail an increase in inventory of $8,000, an increase in Accounts payable of $2,500, and an increase in property, plant, and equipment of $40,000. All other accounts will remain unchanged. What the change in net working capital resulting from the addition of the microbrewery is?
Answer:
The change in net working capital resulting from the addition of the microbrewery is $5,500 (decrease)
Explanation:
There are 3 key elements of working capital. These are;
InventoryAccounts payableAccounts receivableGiven;
increase in inventory = $8,000
increase in Accounts payable = $2,500
Change in net working capital resulting from the addition of the microbrewery = -$8,000 + $2,500
= -$5,500
An irrigation project costs $1000 to build and will last for 5 years. It will double farmers’ crop yields and increase their sales by $500 a year. The pumps used in the irrigation system use 100 gallons of gasoline a year to operate and require $50 a year to maintain. The domestic price of gasoline is 50 cents a gallon, but it is heavily subsidized and costs the government $2 a gallon to import. Assume that for political reasons the government cannot charge farmers for the water. a. If the government’s discount rate is 10%, what is the present value of this project? Should the government build it? Show and explain all your calculations. b. If the discount rate is 5%, what is the present value? Should the government build it? Now suppose a private firm can charge $400 per year for the water and can borrow at 10% to finance the project. Is it profitable for the private firm to build it?
Answer:
a. * The government should not invest because it yields a lower than 0 NPV which is -$52.30 . Please see calculations in the explanation part.
b. * If the discount rate is 5%, the government should invest because it yields a higher than 0 NPV which is $82.37. Please see calculations in the explanation part.
* The private firm should take the project because the profitability or the NPV is $137.24
Explanation:
Because the government is responsible for the increase in common goods of the society while the private firm is not; when calculating NPV for the Government, increase in farmers' sales of corp should be included while it is excluded when doing so for private firm.
Gasoline price should be used domestic price for private firm while for Government, the actual price paid ( import price) is used.
a.
We have the cash flow for the project as followed:
Y0: -1,000; Y1-Y5: Increase in corp sales - Increase in gasoline consumption with price per gallon is calculated at import price - Maintenance cost = 500 - 2 x 100 - 50 = $250
=> NPV = -1,000 + 250/10% x ( 1-1.1^(-5)) = -$52.30
=> Project should not be taken.
b.
* Discount rate for the government is 5%; cash flow in part (a) is remained the same for this scenario:
=> NPV = -1,000 + 250/5% x ( 1-1.05^(-5)) = $82.37
=> Project should be taken.
* The private firm's cash flow is as below:
Y0: -1,000; Y1-Y5: Water charge - Increase in gasoline consumption with price per gallon is calculated at domestic price - Maintenance cost = 400 - 0.5 x 100 - 50 = $300.
=> NPV = -1,000 + 300/10% x ( 1-1.1^(-5)) = $137.24
=> Project should be taken.
What if Jennifer were to invest $2.750 today, compounded semiannually, with an annual interest rate of 5.25%. What amount of interest will Jennifer earn in one year? a. $2,896.27 b. $84.27 c. $525.27 d. $146.27
Answer:
d. $146.27
Explanation:
For computing the interest earned, first we have to calculate the future value which is shown below:
Future value = Present value × (1 + rate)^number of years
where,
Present value = $2,750
Rate = 5.25% ÷ 2 = 2.625%
Number of years = 1 year × 2 = 2 years
So, the future value
= $2,750 × (1 + 2.625%)^2
= $2,750 × 1.0531890625
= $2,896.27
Now the interest earned would be
= $2,896.27 - $2,750
= $146.27
Pepper Department store allocates its service department expenses to its various operating (sales) departments. The following data is available for its service departments: Expense Basis for allocation Amount Rent Square feet of floor space $39,000 Advertising Amount of dollar sales $60,000 Administrative Number of employees $90,000 The following information is available for its three operating (sales) departments: Department Square Feet Dollar Sales Number of employees A 4,500 $325,000 21 B 4,900 $345,000 23 C 5,100 $480,000 25 Totals 14,500 $1,150,000 69 What is the total advertising expense allocated to Department C?
Answer:
$25,043
Explanation:
For Department C:
Advertising
Total dollar sales = $1,150,000
Amount of dollar allocated to Department C = $480,000
Advertising expense = $60,000
Total advertising expense allocated to Department C:
= (Advertising expense ÷ Total dollar sales) × Amount of dollar allocated to Department C
= ($60,000 ÷ $1,150,000) × $480,000
= $0.0522 × $480,000
= $25,043
American expansionism after the 1890s:
Select one:
a. was largely driven by the desire for expanded overseas trade.
b. was hampered by the continued U.S. observance of the Monroe Doctrine.
c. had little to do with American consumer demand for foreign products.
d. severely depressed the nation's agricultural and industrial production.
e. was not affected by the development of the railroad.
Answer:
American expansionism after the 1890s: a. was largely driven by the desire for expanded overseas trade.
Explanation:
The 1890 was the age when America faced a number of factors which converged together to give the State its desire to pursue imperial policy. Years that followed the Civil War helped the economy of the United States to expand. The conflict between the nations helped the Industrialization.
The mechanization and mass production helped the industries to find a potential market place for the consumer goods, and this on the other hand helped the growth of the business and the rise of a new modern America. The transportation in this picture was nothing less than a boon which allowed the moving of the finished products with ease.
American expansionism after the 1890s was primarily driven by the desire for expanded overseas trade, during an era known as the Age of Imperialism. This was motivated by increased consumer demand and the opportunities for American businesses in new markets overseas.
Explanation:The correct answer to your question about American expansionism after the 1890s is that it a. was largely driven by the desire for expanded overseas trade. This period of American history, often referred to as the Age of Imperialism, saw the US expand its interests abroad, largely as a result of increased consumer demand at home and the opportunities that new markets overseas offered to American businesses. The desire to expand trade and access resources played a significant role in driving American foreign policy and contributed to the country’s involvement in several conflicts, including the Spanish-American War.
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Dana has a portfolio of 8 securities, each with a market value of $5,000. The current beta of the portfolio is 1.28 and the beta of the riskiest security is 1.75. Dana wishes to reduce her portfolio beta to 1.15 by selling the riskiest security and replacing it with another security with a lower beta. What must be the beta of the replacement security? a. 1.21 b. 0.91 c. 0.73 d. 1.62
Answer:
Option c. 0.73
Explanation:
Data provided in the question:
Market value of securities = $5,000
Current beta of the portfolio = 1.28
Beta of the riskiest security = 1.75
Required beta = 1.15
Now,
let the beta of the other security be 'x'
Portfolio beta = weighted average of individual betas in the portfolio
or
1.28 × 8 × $5000 = [ x × (8 - 1) × $5000 ] + [ 1.75 × $5000 ]
or
$51,200 = $35,000x + $8750
or
$35,000x = $42,450
or
x = 1.21
Thus,
If she wishes to reduce the beta to 1.15, by replacing the riskiest security,
let the beta of the replacement security be 'y'
Therefore,
1.15 × 8 × $5000 = [ 1.21 × (8 - 1 ) × $5000 ] + [ y × $5000 ]
or
$46,000 = $42,350 + $5,000y
or
$5,000y = $3,650
or
y = 0.73
Hence,
Option c. 0.73
Marigold Corp. has 493000 shares of $10 par value common stock outstanding. During the year Marigold declared a 14% stock dividend when the market price of the stock was $36 per share. Three months later Marigold declared a $0.60 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
Answer: $2,821,932
Explanation:
No. of shares outstanding before stock dividend = 493,000
Price per share = $36
Stock dividend issued (shares issued) = 493,000 x 14% = 69,020
Value of stocks issued as stock dividend = 69,020 x $36 = $2,484,720
No. of shares outstanding after stock dividend = 493,000 +69,020 = 562,020
Cash dividend = 562,020 x 0.60 = 337,212
Total reduction in retained earnings = total value of dividend issued
= $2,484,720+$337,212
= $2,821,932
Using the data below, we are now going to use our supply/demand framework for US $ to model the movement in the euro per $ exchange rate between December 2007 (the very beginning of the Great Recession) and November 2008 (pretty much the height of the global financial crisis). Note that the data is given in $ per euro and then converted into euro per dollar. For example, $ 1.2 per euro is converted by 1/1.2 = .833 meaning that $1 = .83 euro (this is the vertical axis on your graph, i.e., euro per $).
Draw a supply and demand diagram like we did numerous times in the lectures labeling the vertical axis as euro per $, the horizontal axis with Quantity of dollars, the initial supply and demand curves labeled with 12/07, Label this initial intersection point as point A. Now explain what happened to each curve and WHY between 12/07 and 11/08. Label as point B with your supply and demand curves labeled accordingly (Hint: the two obvious facts during this period is that the 1) US was in a deep recession and 2) we were at the height of the (global) financial crisis (in 11/08). Assume all else is constant.
Data:
12/1/2007 the dollar per euro exchange rate is $1.45, so the euro per dollar exchange rate is 1/1.45 = .69 euros per dollar.
11/1/2008 the dollar per euro exchange rate is $1.27, so the euro per dollar exchange rate is 1/1.27=.79 euros per dollar.
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
How can you make sure you use the appropriate etiquette while being aware of : the organizational structure, values within, methods of communication, diversity of the workforce
Explanation:
Organizational culture is characterized as a set of values that is shared by all employees at all organizational levels.
Therefore, culture is a determining factor for the elaboration and compliance with organizational rules and norms.
For an organizational label to be correctly incorporated, it is necessary to take into account essentially the organizational culture, the way relationships develop within the organization, how hierarchization occurs, the interaction between teams, what are the core values of the organization. company and other variables that compose it.
Ideally, organizational identity should be taken into account, all values respected and ethical principles maintained so that the organizational flow occurs properly.
Which category of the money supply would you be contributing to if you deposited money into your savings account? Group of answer choices M2 M1 traveler's check time deposits
The correct answer is A; M2
Further Explanation:
There are two types of measuring money M1 and M2. When someone is making a deposit into their savings they are contributing to the M2 money supply. The difference between M1 and M2 is the the liquidity of the money. M1 is when you have more liquid assets. M2 has all of the features of M1 but includes savings deposits and also time deposits and aren't as liquid as M1.
M1 contains all of the currency such as coins and paper money that is in the circulation of the public. The money for M1 can be gotten on demand such as when a person uses their debit card.
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You invent a new pet care product – a rubber mat that keeps dogs from flying off the center console when their owner hits the brakes. You successfully file for a patent and bring the product to market. You can get as many of the units produced as you’d like at a cost of $8 each. In other words, the cost function is given by ????(????) = ????????. You pay for a market research firm to estimate the market demand for your product. The econometricians there estimate that the demand for your product is given by ???? = ????, ???????????? − ????????. Your partner says that demand seems really high, and suggests that you charge $75 per unit. You aced managerial economics but your partner didn’t – you are skeptical that she is guessing at a price and not maximizing profits.
Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Following are the transactions of a new company called Pose-for-Pics.Aug. 1 Madison Harris, the owner, invested $6,500 cash and $33,500 of photography equipment in the company in exchange for common stock.2 The company paid $2,100 cash for an insurance policy covering the next 24 months.5 The company purchased office supplies for $880 cash.20 The company received $3,331 cash in photography fees earned.31 The company paid $675 cash for August utilities.Prepare an August 31 trial balance for Pose-for-Pics.a. Debit Creditb. Cashc. Officesd. Prepaid insurancee. Photography equipmentf. Common stockg. Photography fees earnedh. Utilities expensei. Totals
Answer and Explanation:
Journal Entries:
Cash 6500
Photography equipment 33500
Capital 40000
Prepaid Insurance 2100
Cash 2100
Office Supplies 880
Cash 880
Cash 3331
Revenue 3331
Utilities Expense 675
Cash 675
Cash account = 6500 - 2100 - 880 + 3331 - 675 = 6176
POSE-FOR-PIC
Trial Balance
Debit Credit
Cash 6176
Prepaid Insurance 2100
Supplies 880
Revenue 3331
Utilities Expense 675
Capital 40000
Photography Equipment 33500
Total 43331 43331
A trial balance for Pose-for-Pics for August 31 is created by listing every account and calculating the debit or credit balances after considering all transactions for the month. After calculating all balances, the company's debit and credit totals should be equal, in this case, $42,731.
Explanation:To prepare a trial balance for Pose-for-Pics for August 31, start by listing every account that has a balance. Then, calculate their respective balances, as per debits or credits, based on all the transactions of the month. Here is a step-by-step process for the transactions:
August 1: Cash increases (debit) by $6,500 and Photography equipment increases (debit) by $33,500. These increasements are balanced by a credit of $40,000 (= $6,500 + $33,500) in the Common stock account.August 2: Insurance expense decreases (credit) cash by $2,100 and increases (debit) Prepaid insurance by the same amount.August 5: Office supplies expenditure decreases (credit) cash by $880.August 20: Photography fees earned increased (credit) by $3,331, which is balanced by a similar increase (debit) in cash.August 31: Payment of utilities decreases (credit) cash by $675, and increases (debit) utility expense by the same amount.Finally, prepare the balance of each account:
Cash: $6,500 (Aug 1) - $2,100 (Aug 2) - $880 (Aug 5) + $3,331 (Aug 20) - $675 (Aug 31) = $6,176Office supplies: $880Prepaid Insurance: $2,100Photography Equipment: $33,500Common stock: $40,000Photography fees earned: $3,331Utilities expense: $675The trial balance total whether debit or credit should be equal, which in this case is $42,731.
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The Boot Department at the Omaha Department Store is being considered for closure. The following information relates to boot activity: Sales revenue $352,000 Variable costs: Cost of goods sold 282,000 Sales commissions 32,000 Fixed operating costs 92,000 If 80% of the fixed operating costs are avoidable, should the Boot Department be closed?A. Yes, Omaha would be better off by $35,600. B. Yes, Omaha would be better off by $54,000. C. No, Omaha would be worse off by $19,600. D. No, Omaha would be worse off by $38,000 E. None of the answers is correct.
We calculated that the store would be better off by $93,200 if the Boot Department were closed, so E: none of the answers is correct.
Explanation:To determine whether the Omaha Department Store should close the Boot Department, we use a series of equations to calculate the net contribution. First, let's calculate the contribution margin, which is the sales revenue minus the variable costs ($352,000 - $282,000 - $32,000) = $38,000. Next, let's determine the avoidable fixed costs, which are the fixed costs that will not be incurred if the Boot Department is closed. Here, 80% of the fixed operating costs are avoidable ($92,000 * 0.80) = $73,600. The net contribution, then, is our contribution margin plus the avoidable fixed costs. Here, that adds up to $111,600. This amount outweighs the unavoidable fixed costs (20% of $92,000) = $18,400. This would imply that the Omaha Department Store would be better off by $93,200 (net contribution minus unavoidable fixed costs) if the Boot Department were closed. Hence, exception E, none of the answers is correct.
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What annual growth rate is needed for a country to double its output in each of the following cases? Instructions: In parts a-c, enter your answers as whole numbers. In part d, round your answer to 1 decimal place.
a. In 7 years: 10percent
b. In 35 years: 2percent.
c. In 70 years: 1percent
d. In 140 years: 0.5percent.
Answer:
A. 10%
B. 2%
C. 1%
D. 0.5%
Explanation:
Using the rule of 70, which is a method for estimating an investment's doubling time. It is a way to know how quickly something will double when it's growing exponentially. Just divide 70 by the percent increase, and you get the doubling time.
Years to double = 70 ÷ Growth Rate
Therefore, getting the Growth rate; rearrange the equation
Growth Rate = 70 ÷ Years to Double.
A. In 7 years = 70÷7 = 10%
B. In 35 years = 70÷35 = 2%
C. In 70 years = 70 ÷ 70 = 1%
D. In 140 years = 70 ÷ 140 = 0.5%
Final answer:
The Rule of 72 is used to estimate the annual growth rate needed to double a country's output in a specific timeframe. For 7, 35, 70, and 140 years, the rates would be approximately 10%, 2%, 1%, and 0.5%, respectively. Additionally, per capita output growth is calculated by subtracting population growth from output growth.
Explanation:
The question asked is related to the annual growth rate needed for a country to double its output in various timeframes. The Rule of 72 is a simplified formula that helps to estimate the number of years required to double the invested money at a given annual fixed interest rate. By dividing 72 by the annual rate of interest, one obtains a rough estimate of how many years it will take for the initial investment to double.
Applying the Rule of 72:
In 7 years, the growth rate should be approximately 72 / 7 ≈ 10.3%. Rounding to a whole number, we get 10%.In 35 years, the growth rate should be approximately 72 / 35 ≈ 2.1%. Rounded to a whole number, 2%.In 70 years, the rate should be roughly 72 / 70 ≈ 1.0%, which is 1%.For part d, the growth rate required to double output in 140 years to one decimal place is 72 / 140 ≈ 0.51%, which rounds to 0.5%.Now, if a country's population grows at the rate of 2% per year and its output grows at the rate of 3% per year, the rate of growth of per capita output would be the difference in these rates, which is 3% - 2% = 1%. Conversely, if the population grows at 3% and output grows at 2%, the growth of per capita output would be negative, at 2% - 3% = -1%.
If an investor owns less than 20% of the common stock of another corporation as an investment.
a. it is presumed that the investor has relatively little influence on the investee.
b. no dividends can be expected.
c. it is presumed that the investor has significant influence on the investee.
d. the equity method of accounting for the investment should be employed.
Answer:
The correct answer is letter "A": it is presumed that the investor has relatively little influence on the investee.
Explanation:
According to the United States Generally Accepted Accounting Principles (GAAP) and the International Financial Reporting Standard (IFRS), investments between 20% and 50% of the voting stock of a different company are considered minority. Minority appears as noncurrent assets on the balance sheet.
Then, if an investor has less than 20% of the common stock of another company, it implies that investor has few to no influence on the investee.
Jim and Sue were going to be married and were very much in love. Before the wedding date, they went out for coffee and orally agreed to how the marital assets would be split if they divorced. Four years later they divorced. Jim attempted to enforce their oral prenuptial agreement. What will be the result?
A.It will be enforced as there is consideration.
B. It will not be enforced due to the statute of frauds.
C.It will not be enforced as it violates public policy.
D. It will be enforced as there was a meeting of the minds.
Answer:
B. It will not be enforced due to the statute of frauds.
Explanation:
Jim and Sue ''orally agreed to how the marital assets would be split if they divorced'', but however did not sign any agreement that makes the contract valid. Thus, the contract will not be enforced due to the statute of frauds. A statute of frauds, simply means a contract without sufficient written evidence agreed and signed by parties to the contract.
Jim's attempt to enforce the oral prenuptial agreement with Sue is likely to fail due to the statute of frauds, which requires such agreements to be in written form to be legally enforceable.
The question involves a situation where Jim and Sue had an oral agreement on how marital assets would be divided in the event of a divorce. When analyzing whether this oral prenuptial agreement would be enforced, we must consider the statute of frauds, which requires certain agreements to be in writing to be enforceable. Prenuptial agreements often fall under this requirement due to the significance and complexity of the matters they address. Additionally, whether there was a "meeting of the minds" or consideration is not solely adequate for enforceability where the statute of frauds is implicated.
In general, for an oral premarital agreement to be enforced, it would have to comply with specific state laws that may dictate such agreements be in written form. As these oral agreements are not typically enforceable based on the statute of frauds, which dictates that contracts for marriage must be in writing, the likely outcome is that Jim's attempt to enforce the oral agreement will fail.
Therefore, the correct answer is: B. It will not be enforced due to the statute of frauds.
Waterway Industries signed a three-month, zero-interest-bearing note on November 1, 2020 for the purchase of $499900 of inventory. The face value of the note was $512500. Waterway used a "Discount of Note Payable" account to initially record the note. Assuming that the discount will be amortized equally over the 3-month period and that there was no adjusting entry made for November, the adjusting entry made at December 31, 2020 will include a
a. debit to Discount on Note Payable for $1,300.
b. debit to Interest Expense for $2,600.
c. credit to Discount on Note Payable for $1,300.
d. credit to Interest Expense for $2,600.
Answer:c. credit to discount on note payable of $1300
Explanation:
The total three months debit on the transaction has been recognized in the month of November of which is to be spread for three months period. As at December the three months debit is still in the account but it's supposed to be two months. The correction is to credit the account for one month installment to reduce the debits to two. This is why thier i is need for a credit of $1300 to discount on note payable account.
Mirrlees Furniture earned $750,000 last year and had a 30% payout ratio. How much did the firm add to its retained earnings?
Answer:
It is $525,000.
Explanation:
If the payout ratio is 30% ,then retention rate will be 70%
Additional Retention = $750,000* 70%
=$525,000
Additional amount retained can be used for future business expansion and can also be used to buy back shares provided there is no available profitable investment project to invest in.
Here, the retention rate is very high which implies that the company has prospective investment to put the money into to generate additional returns.
Investors will therefore settle for capital appreciation resulting from increase in share price as result of additional earnings from profit plouged back into the business.
Final answer:
Mirrlees Furniture paid out $225,000 in dividends from its $750,000 earnings since it has a 30% payout ratio. The remaining $525,000 was added to its retained earnings.
Explanation:
Mirrlees Furniture earned $750,000 last year and had a 30% payout ratio. This means that the firm paid out 30% of its earnings as dividends. To calculate the amount added to retained earnings, we first need to determine the dividend paid and then subtract that from the total earnings.
The calculation for the dividends paid is as follows: $750,000 ×30% = $225,000. Consequently, the amount added to retained earnings is the earnings minus the dividends: $750,000 - $225,000 = $525,000. Therefore, Mirrlees Furniture added $525,000 to its retained earnings.
Diane's Auto World installs tires on automobiles, light trucks, and sport utility vehicles. She is a profit-maximizing business owner whose firm operates in a competitive market. The marginal cost of installing a tire is $20. The marginal productivity of the last worker that Diane hired was 2 tires per hour. What is the maximum hourly wage that Diane was willing to pay the last worker hired?
a. There is insufficient information to answer this question.
b. $20
c. $40
d. $10
Answer:
option (c) $40
Explanation:
Data provided in the question:
The marginal cost of installing a tire = $20
The marginal productivity of the last worker = 2 tires per hour
Now,
The maximum hourly wage that Diane was willing to pay the last worker hired
= marginal cost of installing a tire × marginal productivity of the last worker
= $20 × 2
= $40
Hence,
The answer is option (c) $40
The maximum hourly wage Diane would pay is equal to the marginal revenue product of the worker, which is 2 tires at a marginal cost of $20 each, totaling $40 per hour.
Explanation:The maximum hourly wage that Diane was willing to pay the last worker hired to install tires, given that Diane's Auto World operates in a competitive market and the marginal cost of installing a tire is $20, can be determined by the marginal productivity of that worker. This productivity was 2 tires per hour, which implies that the value generated by this worker for the firm is the sale price of these two tires. As a profit-maximizing business owner, Diane would pay up to, but no more than, the value of the marginal product of the last worker. Knowing that the marginal cost of installing one tire is $20, and considering that each worker installs 2 tires per hour, the marginal revenue product is 2 tires times $20 per tire, equal to $40 per hour. Therefore, the maximum hourly wage Diane would pay is the marginal cost of the output produced by the worker, which in this case would be answer option c. $40.
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Libre, Inc. has experienced bad debt losses of 5% of credit sales in prior periods At the end of the year, the balance of Accounts Receivable is $121,000 and the Allowance for Doubtful Accounts has an unadjusted credit balance of $1,550 Net credit sales during the year were $192,000. Using the percentage of credit sales method, what is the estimated Bad Debt Expense for the year? Multiple Choice $6,050 $9100 $9,600
Answer:
debit Bad debt Expense = $9,600
so correct option is $9,600
Explanation:
given data
bad debt losses = 5%
Accounts Receivable = $121,000
unadjusted credit balance = $1,550
Net credit sales = $192,000
to find out
estimated Bad Debt Expense for the year
solution
first we get here Bad debt expense by percentage of credit sales method that is
Bad debt expense = credit Sales × percentage of bad debt losses
Bad debt expense = $192,000 × 5%
Bad debt expense = $9,600
so here we can say $9,600 will be recorded as
debit Bad debt Expense = $9,600
and credit Allowance for doubtful debts = $9,600
so here revised balance in Allowance for doubtful debts is $9,600 + $1,550 = $11150
so correct option is $9,600