Aerospace Electronics reports $568,000 in credit sales for 2018 and $634,500 in 2019. They have a $501,000 accounts receivable balance at the end of 2018, and $602,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 5% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 7% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. $1 C. How does the new total bad debt expense affect net income and net accounts receivable? a. Bad debt expense is lower, net income is higher, and net receivables are higher. b. Bad debt expense is lower, net income is higher, and net receivables are lower. Bad debt expense is higher, net income is lower, and net receivables are higher. C. d. Bad debt expense is higher, net income is lower, and net receivables are lower.

Aerospace Electronics reports $568,000 in credit sales for 2018 and $634,500 in 2019. They have a $501,000 accounts receivable balance at the end of 2018, and $602,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 5% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 7% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. $1 C. How does the new total bad debt expense affect net income and net accounts receivable? a. Bad debt expense is lower, net income is higher, and net receivables are higher. b. Bad debt expense is lower, net income is higher, and net receivables are lower. Bad debt expense is higher, net income is lower, and net receivables are higher. C. d. Bad debt expense is higher, net income is lower, and net receivables are lower.

Name: Aerospace Electronics reports $568,000 in credit sales for 2018 and $
Uploaded: 2022-11-23T13:49:29.000Z
Channel: Bartleby
Description: Aerospace Electronics reports $568,000 in credit sales for 2018 and $634,500 in 2019. They have a $501,000 accounts receivable balance at the end of 2018, and$602,000 at the end of 2019. Aerospace uses the income statement method to record bad debt

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Provide Correct
Angelo’s Outlet used to report bad debt using the balance sheet method and is now switching to the income statement method. The percentage uncollectible will remain constant at 5%. Credit sales figures for 2019 were $866,000, and accounts receivable was $732,000. How much will Angelo’s Outlet report for 2019 bad debt estimation under the income statement method?
Carson's Bakery operates its business on a calendar year-end and uses 3% of Accounts Receivable to estimate bad debt expense. The company presents the following information at December 31, 2020 before any adjusting entries have been made. Account DR CR Accounts receivable 978,000 Allowance for doubtful accounts 23,750 667,500 Net credit sales What will the company record for bad debt expense? Debit choose your answer... type your answer... Credit choose your answer... type your answer...
Concord, Inc. had net sales in 2025 of $1,428,800. At December 31, 2025, before adjusting entries, the balances in selected accounts were Accounts Receivable $392,000 debit, and Allowance for Doubtful Accounts $4,240 credit. If Concord estimates that 9% of its receivables will prove to be uncollectible. Prepare the December 31, 2025, journal entry to record bad debt expense. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List debit entry before credit entry.)
a) Prepare all journal entries to record the activity for the items above for 2020 b) Prepare any journal entries required at December 31, 2020 to record bad debt expense for the year
Funnel Direct recorded $1,341,780 in credit sales for the year and $699,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,588; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. If an amount box does not require an entry, leave it blank. Round your answers to two decimal places. A. Dec. 31 - Select - - Select - - Select - - Select - To record bad debt, income statement method B. Dec. 31 - Select - - Select - - Select - - Select - To record bad debt, balance sheet method C. Dec. 31 - Select - - Select -…
Hi, Please with question, thank you.
Carson's Bakery operates its business on a calendar year-end and uses 1% of Credit Sales to estimate bad debt expense. The company presents the following information at December 31, 2020 before any adjusting entries have been made. Account DR CR Accounts receivable 978,000 Allowance for doubtful accounts 23,750 667,500 Net credit sales What will the company record for bad debt expense? Debit choose your answer.. type your answer... Credit choose your answer... type your answer...
Edsel Inc. has the following unadjusted year end trial balance information available for 2018: Credit sales Ending accounts receivable balance. Ending allowance for uncollectibles Estimated uncollectibles Multiple Choice If Edsel uses the gross accounts receivable approach for estimating the bad debt provision, the allowance for uncollectibles account, afte accounts are recorded, should show a balance of. O $2,600 O $3,600 $600,000 $180,000 $1,500 O $5,600 2%
Gray Corporation controls its cash by depositing receipts on a daily basis and making all disbursements by cheque. After all the posting for the month of August 2020 was completed, the cash balance in the general ledger account at the end of the month was $10,475. The bank statement for the month end received from the First National Bank showed the balance to be $18,000. The following data are available for the purpose of reconciling these balances: a. Cash receipts collected on August 31 amounting to $3,000 have been placed in the night depository and do not appear on the bank statement. b. Bank memos previously not available to the company are included with the bank statement. A memo for an NSF cheque, originally received as payment for an account receivable of $3,000, is included. A memo for bank charges of $75 for the NSF cheque is also included. Another memo advises the company that $2,000 Note Receivable has been collected by the bank, ($1,950 deposit and a bank charge of $50).…
Sagar
On the year end of July 31, 2020, Rainbow Appliances had the following account balances before adjustments for bad debt was made. Net Credit Sales for the period $1,028,000 CR Accounts Receivable $656,000 DR AFDA $1,900 DR Do not enter dollar signs or commas in the input boxes. a) Use the year-end balances reported on the balance sheet and the aging schedule shown below to calculate the allowance for doubtful accounts. Aging Category Bad Debt % Balance Estimated Bad Debt Less than 30 days 2% $422,000 31-60 days 4% $105,000 61-90 days 11% $75,000 91-120 days 28% $37,000 Over 120 days 52% $17,000 Total $656,000 Prepare the journal entry to record bad debt expense for the year: Date Account Title and Explanation Debit Credit Jul 31 To record bad debt expense b) Assume instead that Rainbow Appliances used the income statement approach for estimating bad debt. If historical data indicates that approximately 2% of net credit sales are uncollectible, what amount is expected to be…