The following information is available for Quality Book Sales's sales on account and accounts receivable: Accounts Receivable Balance, January 1, 2000 $78,500
Allowance for Doubtful Accounts, January 1, 2000 4,710
Sales on Account, 2000 550,000
Collections of Accounts Receivable, 2018 556,000

After several collection attempts, Quality Book Sales wrote off $2,950 of accounts that could not be collected. Quality Book Sales estimates that 0.75 percent of sales on account will be uncollectible.

Required:
a. Compute the following amounts:
1. Using the allowance method, the amount of uncollectible accounts expense for Year 2. (Round your final answer to nearest whole dollar amount.)
2. Net realizable value of receivables at the end of Year 2. (Round intermediate calculations final answer to nearest whole dollar amount.)

b. Explain why the uncollectible accounts expense amount is different from the amount that was written off as uncollectible.

1. Uncollectible accounts expense is an estimate of current receivables that may eventually be uncollectible.
2. Uncollectible accounts expense is the actual amount that was determined in the current accounting period to be uncollectible

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?