Asked Oct 2, 2019

 If Gilmore's estimate of bad debts is correct (2.2% of credit sales) and the gross margin is 20%, by how much did Gilmore's income from operations increase assuming $150,000 of the sales would have been lost if credit sales were not offered?


Expert Answer

1 Rating
Step 1

If sales of $150,000 is lost on account of not offering credit, this sale can be assummed to be incremental sales on offering credit. The gross margin needs to be multiplied with this sales, to arrive at the incremental gross income. However there would be an inc...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Amazon invested $128,000 in the Jungle and River partnership for ownership equity of $128,000. Prior...

A: a. Provide journal entry for the revaluation of equipment:


Q: Accounting Question

A: Click to see the answer


Q: How much of the following gifts are included in the adjusted taxable gifts calculation of a decedent...

A: As per the rules, following are applicable in this question:1. Annual gift tax exclusion is $15,000 ...


Q: Number of units produced   2,900 Number of units sold   1,700 Unit sales price $ 790.00 Direct...

A: Absorption income statement is as follows: Results of the formulas used in the above table are as fo...


Q: Everrest Inc.'s stock has a 53% chance of producing a 14.25% return, a 25% chance of producing a 27....

A: Stock: A kind of investment that are made by the investors, in order to get more returns is referred...


Q: Journalize the following adjustments. (Credit account titles are automatically indented when the amo...

A: Definition of Adjustment Entries:Adjustment Journal Entries are those entries which are made at the ...


Q: What is the difference between account receivable and account payable ?

A: Diffecrence between the accounts receivable an accounts payable are as follows:


Q: James Corp. applies overhead on the basis of direct labor hours. For the month of May, the company p...

A: Overhead: Overhead refers to the costs, which are utilized in business activities, however cannot be...


Q: Bava Consulting has the following account balances at December 31, the end of its fiscal year. Servi...

A: When closing entries are prepared, the balances of T-accounts of revenue and expenditure is transfer...