The firm is considering a proposal to tighten credit standards. The marketing department estimates that if standards are tightened that annual sales will drop $46,817 from the present level of $750,000. The variable cost ratio is 0.7 and will not change. Variable expenses related to collections and credit administration are projected at 1.45% of sales under the proposed standards. The bad-debt expense rate on both existing and incremental (lost) sales is estimated to be 0%. The DSO of 56 days is not expected to change and can be applied to any sales gained or lost due to a change in credit standards. The company's annual cost of capital is 15%. The value of one day's sales under the existing policy is $300. What is the effect of the decision to tighten standards on the value of 1-day's sales

On january 1, 2018, red flash photography had the following balances: cash, $19,000; supplies, $8,700; land, $67,000; deferred revenue, $5,700; common stock $57,000; and retained earnings, $32,000. during 2018, the company had the following transactions: 1. february 15 issue additional shares of common stock, $27,000. 2. may 20 provide services to customers for cash, $42,000, and on account, $37,000. 3. august 31 pay salaries to employees for work in 2018, $30,000. 4. october 1 purchase rental space for one year, $19,000. 5. november 17 purchase supplies on account, $29,000. 6. december 30 pay dividends, $2,700. the following information is available on december 31, 2018: 1. employees are owed an additional $4,700 in salaries. 2. three months of the rental space has expired. 3. supplies of $5,700 remain on hand. 4. all of the services associated with the beginning deferred revenue have been performed. required: 1. record the transactions that occurred during the year.2. record the adjusting entries at the end of the year.3. prepare an adjusted trial balance.4. prepare an income statement, statement of stockholders’ equity, and classified balance sheet.5. prepare closing entries.

The adjusted trial balance for china tea company at december 31, 2018, is presented below:

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