Question: 1) Compute profit margin ratio given the following information:
Cost of Goods Sold $28,000
Net Income 21,400
Gross Profit 400,000
A) 5%
B) 7%
C) 1.65%
D) 6.64%
E) 76.42%
2) Vine Company began operations on January 1, 2010. During its first year, the company completed a number of transactions involving sales on credit, accounts receivable collections, and bad debts. These transactions are summarized as follows:
a) Sold $1,348,300 of merchandise (that had cost $983,600) on credit, terms n/30
b) Wrote off $19,400 of uncollectible accounts receivable
c) Received $666,100 cash in payment of accounts receivable
d) In adjusting the accounts on December 31, the company estimated that 2.90% of accounts receivable will be uncollectible
What is the amount required for the adjusting journal entry to record bad debt expense?
A) $18,644.90
B) $39,100.70
C) $19,783.80
D) $19,221.20
E) $19,400.20