Nenn Co.'s allowance for uncollectible accounts was $190,000 at the end of 2017 and $180,000 at the end of 2016. For the year ended December 31, 2017, Nenn reported bad debt expense of $31,000 in its income statement. What amount did Nenn debit to the appropriate account in 2017 to write off actual bad debts?

$21,000

$10,000

$41,000

$31,000

$ 21,000

Explanation:

To determine the answer we need to preoare a movemnet of the account for uncollectible account.

Opening balance - Allowance for uncollectible accounts           $ 180,000

Add: Bad debt expense for the year                                             $   21,000  

Available balance of Allowance for uncollectible accounts        $  201,000

Less: Closing balance - Allowance for uncollectible accounts    $  190,000

Actual bad debts written off                                                          $ 21,000

The bad debts expense for the year is credited to the Allowance for uncollectible accounts and any actual bad debts are debited to this account.

Explanation:

South Tel Communications is considering the purchase of a new software management system. The system is called B-image, and it is expected to drastically reduce the amount of time that company technicians spend installing new software. South Tel's technicians currently spend 6,000 hours per year on installation which cost South Tel $25 per hour. The owners of the B-image system claim that their software can reduce time on task by at least 25%. The system requires an initial investment of $55,000 and an additional investment of$10,000 for technician training on the new system. Annual upgrades will cost the firm $15,000 per year. Because the investment is comprised of software, it can be fully expensed in the year of the expenditure (no depreciation). South Tel faces a 30% tax rate and uses a 9% cost of capital to evaluate projects of this type.

A. Assuming that South Tel has sufficient taxable income from other projects so that it can immediately expense the cost of the software, what are the free cash flows for the project for years zero through five?

Total (65,000)

Cash flow year 1 - 5

Saving on installations per year 450,000

Less: Annual upgrades ( 15,000)

Total 435,000

Less: Tax (30%) (130,500);

Total project free cash flow 304,500.answer