Problemwilliam electronics has decided to extend trade, Ask an Expert

Accounting

Problem:

William electronics has decided to extend trade credit to some customers previously considered poor risks. Sales would increase by $200,000 if credit is extended to these new customers. However, 10% of these new accounts will be uncollectable. The cost of producing and selling the product will be 80 percent of the sales. The firm is in the 40 percent tax bracket.

Required:

Question: What is the incremental income after tax associated with extra sales?

Note: Provide support for rationale.

View complete question

Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91169407

Have any Question?Write your Review or question?

Related Questions in Accounting Basics

Question - for the year ended december 31 2017 transformers

Question - For the year ended December 31, 2017, Transformers Inc. reported the following: Net Income $295120 Preferred dividends paid 52563 Common dividends paid 11449 Unrealized holding loss, net of tax 4297 Retained E ...

Question - abc manufacturing provides the standard cost of

Question - ABC Manufacturing provides the standard cost of making a single product for June: Factory Overhead Fixed 4 hours @ $1.25 per hour $5.00 Variable 4 hours @ $6.25 per hour $25.00 The factory overhead rate was ba ...

Question - background info company a parent purchased 100

Question - Background info: Company A (parent) purchased 100% of the shares in Company B (subsidiary). Company B sold inventory on the 1/3/17 to Company A for $98,000. This inventory had cost Company B $69,000. by 30/6/1 ...

Question evaluating the purchase of an asset with various

Question: Evaluating the Purchase of an Asset with Various Capital Budgeting Methods In this activity, you will be evaluating whether you should purchase a hybrid car or its gasoline-engine counterpart. Select two car mo ...

Question - on october 1 nathan4u inc made a 25000 sale on

Question - On October 1, Nathan4U, Inc. made a $25,000 sale on account with the following terms: 1/15, n/30. If the company method to record sales made on credit, how much should be recorded as revenue on October 1?

Question - how do you find covered payroll on a schedule of

Question - How do you find covered payroll on a schedule of changes in net pension liability and related ratios chart? How do you find "New pension liability as a percentage of covered payroll"? Net change in plan fiduci ...

Question - one december a 101-year-old woman died and left

Question - One December, a 101-year-old woman died and left $25 million to a university. This fortune was accumulated through shrewd and patient investment of a $4000 nest egg over the course of 55 years. In turning $400 ...

Questions -q1 tom is employed by aa ltd in the usa which is

Questions - Q1. Tom is employed by AA Ltd in the USA which is the parent company located in Los Angelos. Tom was transferred on the 30th of December 2017 to the subsidiary company in Brunswick Melbourne Victoria. AA Ltd ...

Question - sunshine company purchased equipment for 100000

Question - Sunshine Company purchased equipment for $100,000 in 2012. The machinery originally had an estimated life of 8 years and a salvage value of $10,000. Sunshine used the straight-line depreciation method. In 2016 ...

Question - the following data are related to copy paste and

Question - The following data are related to Copy, Paste, and Attach (CPA) Corp's Ending Inventory (Inventory is valued as of December 31 of each year provided, which is CPA Corp's year-end): Year Price Index Inventory a ...

4,153,160 Questions Asked
13,132 Experts
2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Recent Questions

Ask Accounting Basics Expert