Assume the following errors made by the Sri Lanka Company on 12/31/24: . Collected $4 in advance for services to be performed next month; debited Depreciation Expense and credited Sales Revenue Borrowed $13 on a noncurrent Note Payable and debited Sales Discount and credited Interest Expense Recorded the $11 payment of a dividend previously declared by debiting Bad Debt Expense and crediting Allowance for Doubtful Accounts 12/31/24 Working Capital is in error by: Select one: O a $6 Ob. $11 Oc. $13 Od $28 Oe. $24

Assume the following errors made by the Sri Lanka Company on 12/31/24: . Collected $4 in advance for services to be performed next month; debited Depreciation Expense and credited Sales Revenue Borrowed $13 on a noncurrent Note Payable and debited Sales Discount and credited Interest Expense Recorded the $11 payment of a dividend previously declared by debiting Bad Debt Expense and crediting Allowance for Doubtful Accounts 12/31/24 Working Capital is in error by: Select one: O a $6 Ob. $11 Oc. $13 Od $28 Oe. $24

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 65E: Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared...

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Under the direct write-off method of accounting for uncollectible accounts O A. the allowance account is increased for the actual amount of bad debt at the time of write-off. O B. balance sheet relationships are emphasized. O C. bad debts expense is always recorded in the period in which the revenue was recorded. O D. a specific account receivable is decreased for the actual amount of bad debt at the time of write-off.
Assume Simple Company had credit sales of $258,000 and cost of goods sold of $158,000 for the period. Simple uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $330. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment? Bad Debt Expense
You are appointed as the accountant of LALA-BTS Company. You noted that the Company estimated that 3% of its credit sales will not be collectible. Further documents showed the following balances before adjustments: •Credit Sales P2,500,000 •Accounts Receivable P300,000 •Allowance for doubtful accounts - 10,000 debit Determine the net realizable value of the accounts receivable.
An aging of a company's accounts receivable indicates that the estimate of uncollectible accounts totals $3,871. If Allowance for Doubtful Accounts has a $990 debit balance, the adjustment to record the bad debt expense for the period will require a: a.credit to Allowance for Doubtful for $3,871. b.debit to Allowance for Doubtful Accounts for $4,861. c.debit to Bad Debt Expense for $4,861. d.debit to Allowance for Doubtful Accounts for $3,871.
On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets? Mutiple Choice Decrease in net income; no effect on total assets. No effect on net income; no effect on total assets. Decrease in net income; decrease in total assets. Increase in net income; no effect on total assets. No effect on net income; decrease in total assets
Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period. Simple uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $250. What amount of Bad Debt Expense would the company record as an end-of-period adjustment? Bad Debt Expense Rectangular Snip
Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% 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 debit balance in Allowance for Doubtful Accounts of $20,550; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. 2. Assume that the credit sales for 2019 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of loses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. 3. CONCEPTUAL CONNECTION Do you believe this estimate of bad debt expense is reasonable? 4. CONCEPTUAL CONNECTION How would you estimate 2019 bad debt expense if losses from uncollectible accounts for 2018 were What other action would management consider?
Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 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 $13,888; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
An aging of a company's accounts receivable indicates an estimate of uncollectible accounts of $5,353. If Allowance for Doubtful Accounts has a $1,093 debit balance, the adjustment to journalize the bad debt expense for the period will require a a. debit to Bad Debt Expense for $6,446 b. debit to Bad Debt Expense for $5,353 c. credit to Allowance for Doubtful Accounts for $1,093 d. debit to Bad Debt Expense for $4,260
Assume Simple Co. had credit sales of $254,000 and cost of goods sold of $154,000 for the period. Simple uses the percentage of credit sales method and estimates that 1 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $290. What amount of Bad Debt Expense would the company record as an end-of-period adjustment?