BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
1 views

Marmol Corporation uses the allowance method for bad debts. During 2019, Marmol charged $50,000 to bad debt expense and wrote off $45,200 of uncollectible accounts receivable. These transactions resulted in a decrease in working capital of:

  1. a. $0
  2. b. $4,800
  3. c. $45,200
  4. d. $50,000

To determine

Identify the amount of decrease in working capital.

Explanation

Working capital: The measure which evaluates the ability of a company to pay off the short-term debt obligations, by computing the excess of current assets over current liabilities is referred to as working capital.

Justification for the incorrect option of a, b and c:

$0, $4,800 and $45,200 are not the amounts of the decrease in working capital. Therefore, these are incorrect options...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

RETURN ON EQUITY Midwest Packagings ROH last year was only 3%; but its management has developed a new operating...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

What is the main purpose of internal controls over cash payments?

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)