Gabrielle daily borrows $1,000 at a 6 percent add-on rate for one year.what is the finance charge?answers

Response:

• 1. During this fiscal year, the total amount of bad debts that were written off was:

Allowance for Doubtful Accounts  

$ 147 Credit

$ 94 Credit

$ 58 Debit

$ 183 Credit Balance      

Dr Allowance for Uncollectible Accounts $ 58  

Cr Accounts Receivable Net $ 58  

2. Based on your answer to question (1), determine the cash collected from clients for this financial year.

Accounts Receivable  

$ 11,785    Debit  

$ 61,170    Debit  

$ 58         Credit  

$ 58,825 Credit  

$ 14,072  Debit Balance  

Explanation:

To ascertain the amount of debt written off during the ongoing year, take into account the balance from the previous year and factor in the total recorded for bad debts within the year. The difference between the total for the current year and these figures will indicate the written-off amount.

• In the current year, Hassell noted a bad debt expenditure of $94 with no recoveries reported.  

Dr Bad Debt Expense                                $ 94  

Cr Allowance for Uncollectible Accounts $ 94  

1. What was the total amount of bad debts written off in the current year?  

Allowance for Doubtful Accounts  

$ 147 Credit

$ 94 Credit

$ 58 Debit

$ 183 Credit Balance

Dr Allowance for Uncollectible Accounts $ 58

Cr Accounts Receivable Net                 $ 58

2. Using the answer from requirement (1), calculate the cash obtained from customers this year    

With previously calculated figures, you can calculate the total amount collected throughout the year. You repeat the process used earlier to figure out the amount; using the movements from the current year, deduce the total collected value.

Accounts Receivable  

$ 11,785    Debit  

$ 61,170    Debit  

$ 58         Credit  

$ 58,825 Credit  

$ 14,072   Debit Balance  

Dr Cash                                   $ 58.825

Cr Accounts Receivable Net $ 58.825

Question not complete

Direct Labour Cost is missing

Direct Labor Cost ----- $50,000.00 $270,000.00

Answer:

a.

Overhead Rate (Cutting Department) = $5.5 per machine hour = $5.5 per machine hour

Overhead Rate (Finishing Department) = $12.2 per labour hour

b. Total Manufacturing Cost = $644

c. Yes

Explanation:

a. To determine the predetermined overhead rate appropriate for each department.

Given

Cutting Department

The Cutting Department calculates its rate based on machine-hours

Manufacturing Overhead Costs = $264,000

Machine Hours = 48,000

Finishing Department

For the Finishing Department, the rate is calculated based on direct labor-hours.

Manufacturing Overhead Costs = $366,000

Direct Labour Cost = $270,000

Overhead Rate (Cutting Department) = Manufacturing Overhead Cost/Machine Hours

Overhead Rate (Cutting Department) = $264,000/48,000

Overhead Rate (Cutting Department) = $5.5 per machine hour

Overhead Rate (Finishing Department) = Manufacturing Overhead Cost/Machine Hours

Overhead Rate (Finishing Department) = $366,000/$270,000

Overhead Rate (Finishing Department) = 1.36

Overhead Rate (Finishing Department) = 136% direct labour cost

b.

The Cutting Department's rate is based on machine-hours

Given

Machine hours = 80 machine hours

Overhead Rate = $5.5 per machine hours ------ This was calculated

The Finishing Department's calculations rely on direct labor-hours.

Given

Direct Labour Cost = 150

Overhead Rate = 136% of labor cost ------ This was deduced

Overhead Applied (Cutting Department) = 80 * 5.5

Overhead Applied = 440

Overhead Applied (Finishing Department) = 136% * 150

Overhead Applied = $204

Total Overhead Applied = $440 + $204

Total = $644

c. Yes

If the business utilizes a company-wide overhead rate linked to direct labor cost and if jobs have increased machine hours paired with lower labor costs, they would incur less overhead expenses.