Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2020 92,000 Allowance for uncollectible accounts at December 31, 2020 1,850 Debit Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: Prepare the adjusting entry to record uncollectible account expense on December 31, 2020. Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared. Show how the receivables would be reported on the December 31, 2020 balance sheet for Seed Enterprise.
Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments: Net credit sales for the year Php 680,000 Accounts receivable at December 31, 2020 92,000 Allowance for uncollectible accounts at December 31, 2020 1,850 Debit Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales. REQUIRED: Prepare the adjusting entry to record uncollectible account expense on December 31, 2020. Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared. Show how the receivables would be reported on the December 31, 2020 balance sheet for Seed Enterprise.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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PROBLEM 3 (MODIFIED) Seed Enterprise gathered the following information from its accounting records for the year ended December 31, 2020, prior to adjustments:
|
Net credit sales for the year |
Php 680,000 |
|
|
|
92,000 |
|
|
Allowance for uncollectible accounts at December 31, 2020 |
1,850 |
Debit |
Seed uses the allowance method of accounting for uncollectible accounts and estimates uncollectible account expense at 2% of net credit sales.
REQUIRED:
- Prepare the
adjusting entry to record uncollectible account expense on December 31, 2020. - Determine the balance in allowance for uncollectible accounts after the adjusting entry is prepared.
- Show how the receivables would be reported on the December 31, 2020
balance sheet for Seed Enterprise.
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