e of the company's competitors, which has been in the same industry for e 4% of ending accounts receivable, so Swarthout decides to use that sa r were 20% of the $340,000 (= $68,000). Swarthout's inexperience in the
Q: Pina Colada Corp completed the following merchandising transactions in the month of May. At the…
A: Inventory valuation refers to the process of assigning a monetary value to the inventory of a…
Q: Olongapo Sports Corporation distributes two premium golf balls-Flight Dynamic and Sure Shot Monthly…
A: Lets understand the basics.Contribution margin is a sales less variable cost of the company. It is…
Q: Journalize the following transactions. a. On December 1, a company received $11,700 for a service…
A: As per IFRS 15 Revenue from Contract with customers, the amount of cash received for services to be…
Q: On January 1, Power House Co. prepaid the annual rent of $13,600. Journalize this transaction. If an…
A: Adjustment entry is required to prepared to record correct amount of revenue and expense in the…
Q: Exercise 6-12A (Algo) Determining the true cash balance, starting with the unadjusted book balance…
A: Bank reconciliation: It is a statement drawn up by the business to verify the cash book balance with…
Q: Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 Sales…
A: Forecasting refers to the measure of the possible performance of an asset. It is usually calculated…
Q: Robert has owned a vacan
A: A realized gain results from selling an asset at a price higher than the original purchase…
Q: On August 30, JumpStart paid the following expenses: August's rent, $900 August's utility bill, $273…
A: Journal Entry: Journal entry is the act of keeping records of transactions in an accounting journal.…
Q: At the beginning of September, Helen Rojas started Rojas Wealth Management Consulting, a firm that…
A: Income statement is one of the financial statements that shows the profitability, total revenue and…
Q: Perpetual inventory using FIFO Beginning inventory, purchases, and sales for Item Zeta9 are as…
A: FIFO - As per the FIFO method the inventory which is purchased first will be sold out first hence at…
Q: Chuck Sox makes wooden boxes in which to ship motorcycles. Chuck and his three the 200 boxes. a)…
A: Chuck Sox and his three employees' first productivity precisely measures the rate at which wooden…
Q: Stormrage company has two processing departments. Units begin in the Firing Department and then are…
A: Work in progress means the goods which has started in production line but has not completed at the…
Q: Question 5 Starshine Coffee Equipment sells European style coffee makers and uses a perpetual…
A: Inventory means the detailed list or stock of items, goods, or materials held by a business or…
Q: Based on the following data, would Beth and Roger Simmons receive a refund or owe additional taxes?…
A: Lets understand the basics.As per IRS, taxable income is calculated by deducting standard deduction…
Q: Consider the following cash flows of two mutually exclusive projects for AZ-Motorcars. Assume the…
A: NPV calculates the present value of cash inflows minus the present value of cash outflows. The…
Q: On January 1, 20X5, Seymond Corporation issued $100,000 in 10-year, zero-coupon bonds. The interest…
A: Zero coupon bonds means those bonds which were issued for money or any assets but for which no…
Q: Which of the following was amended in SAS 147 with respect to the inquiry of the predecessor auditor…
A: SAS 147 (Statement on Auditing Standards 147) addresses the auditor's responsibilities when…
Q: Journalize the purchase of a truck on April 4 for $66,660, paying $4,20 If an amount box does not…
A: A journal entry is a basic accounting transaction record that is used to collect and document…
Q: The following cost information is available for July for the Crest Plant at Calvert Company:…
A: FIFO METHOD :— Under this method, equivalent units are calculated by adding equivalent units in…
Q: Warranty Costs Brigham Company sells an electric timer that carries a 60-day unconditional warranty…
A: Warranty is a form of assurance, which is being provided by seller to the buyer that in case product…
Q: e the following information for a capital budgeting proposal with a five-year time horizon: Initial…
A: The Internal Rate of Return (IRR) is a financial statistic that is commonly used in capital planning…
Q: Jacarda Company makes a composting bin that is subject to wide seasonal variations in demand. Unit…
A: Predetermined Overhead Rate :— It is the rate used to allocate manufacturing overhead cost to cost…
Q: E6-5 (Algo) Calculating Contribution Margin and Contribution Margin Ratio; Identifying Break-Even…
A: Since you have posted a question with multiple sub-parts, we will do the first three sub-parts for…
Q: During the past year, the company’s financial results reflected the following: Selling, general,…
A: Gross profit is the difference between net sales and cost of goods sold. Net sales is calculated as…
Q: Exercise 6-11A (Algo) Determining the true cash balance, starting with the unadjusted bank balance…
A: A bank reconciliation statement is a financial document that reconciles the bank statement balance…
Q: Apex Company prepared the statement of cash flows shown below: Apex Company Statement of Cash…
A: Free Cash Flow (FCF) is a financial metric used to assess a company's financial performance and…
Q: lowing expenses: ts related to the restaurant ts related to the bakery $34,750 53,000 y division to…
A: The maximum tax-deductible investigation expenditure deduction is the most that a taxpayer is…
Q: operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable…
A: The income statement is one of the important financial statements of the business. It tells about…
Q: In the LMK partnership, Luis's capital is $40,900, Marty's is $51,900, and Karl's is $30,500. They…
A: Journal entry is an art of recording, summarizing and classifying the business transaction into…
Q: TJ. Race Company uses the direct write-off method for recording Bad Debts Expense. At the beginning…
A: There are two methods for recording of bad debt expense(1) Direct write off method : Under this…
Q: Blossom Company asks you to review its December 31, 2025, inventory values and prepare the necessary…
A: A journal entry is an art of recording classifying and summarising the business transaction into…
Q: In 2021, Blossom Company had a break-even point of $331,700 based on a selling price of $5 per unit…
A: The breakeven point is when a business covers all its costs, where total revenue equals total…
Q: Prepare the journal entries to record (1) the purchase of raw materials, (2) the factory labor costs…
A: The journal keeps the record of transactions on regular basis. The direct costs are debited to work…
Q: . What amount can Mr. Holmes deduct for these expenses? O $600 O $250 O $1,425 O so Sherlock Holmes,…
A: Understanding tax deductions is crucial for individuals and businesses alike, as they can lead to…
Q: Required information [The following information applies to the questions displayed below.) Stephanie…
A: A person claimed as Dependent and who is filing his or her own return can claim STANDARD DEDUCTION…
Q: Tony invests $9,300 at 8% annual interest, leaving the money invested without withdrawing any of the…
A: To calculate the future value of an investment with simple interest, you can use the following…
Q: y uses the five activity cost pools listed below: Square feet of lawn Square feet of low-maintenance…
A: Activity Rate is the allocated rate used to allocate overheads . The calculate the rate the indirect…
Q: Houpe Corporation produces and sells a single product. Data concerning that product appear below:…
A: Income statement is one of the financial statements that shows profitability, total revenue and…
Q: The following adjusted trial balance contains the accounts and year-end balances of Cruz Company as…
A: Closing entries are recorded in the books at the end of the period. These are reported for the…
Q: HomeLife Life Insurance Company has two service departments (actuarial and premium rating) and two…
A: Overheads are considered as indirect expenses. Overheads are the expenses incurred for support…
Q: Required information [The following information applies to the questions displayed below.] A company…
A: LIFO stands for last In First out.Using LIFO method, the newer inventory is sold out first.
Q: ! Required information [The following information applies to the questions displayed below.] The…
A: The various methods for inventory valuation are FIFO, LIFO and average method. The net income is…
Q: Masters Training Academy pays weekly salaries of $4,300 on Friday for a 5-day work week ending on…
A: Adjusting entries are those which are reported by the entity at the end of the period in order to…
Q: Sandhill Inc. purchased a patent on January 1, 2023 for $500000. Sandhill did not record…
A: Amortization expense is the non-cash expense charged on the intangible assets. It is reported on the…
Q: Income Statement The revenues and expenses of Paradise Travel Service for the year ended May 31,…
A: Income statements are prepared on order to identify the result of operations of the company for a…
Q: On the 20th June 2023, Proton Motors Ltd sold inventories costing $120,000 to Electron Ltd for…
A: Proton Motors Ltd sold inventories to Electron Ltd at a loss, leading to a reduced tax liability for…
Q: The following accounts are from last year's books at Sharp Manufacturing: Beg Bal (a) Beg Bal (1)…
A: The overhead is applied to the production on the basis of the per-determined overhead rate. The cost…
Q: On January 1, 2025, Abel Company purchased three assets for $400,000. The information below relates…
A: Capital gain refers to the profit earned from the sale of a capital asset, such as stocks, real…
Q: The Inventory records for Radford Company reflected the following: Beginning inventory @ May 1 First…
A: Last in, first out (LIFO) is a method used to account for business inventory that records the most…
Q: A company makes desks in two departments. Budgeted information follows. Assembly 13,800 2,860…
A: The overhead is applied to the production on the basis of the pre-determined overhead rate. The…
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Note:-
- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
- Answer completely.
- You will get up vote for sure.
Step by step
Solved in 3 steps
- At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.Martel Co. has 320,000 in Accounts Receivable on December 31, 20-1, the end of its first year of operations. The business is new, so it has no prior experience with uncollectible accounts. In Martels overall industry, the percentage of uncollectible accounts receivable is about 3%. For companies similar to Martel in size and operations, the percentage is about 5%. Martel decides to use the overall industry experience as the basis for its estimate of uncollectible accounts. Prepare the adjusting entry on December 31, 20-1 for Martel Co.s uncollectible accounts.Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit sales will be uncollectible. Allowance for Doubtful Accounts has a credit balance of 275. Prepare the adjusting entry at year-end for the estimated bad debt expense. (a) Based on an aging of its accounts receivable, Kyles Cyclery estimates that 3,200 of its year-end accounts receivable will be uncollectible. Allowance for Doubtful Accounts has a debit balance of 280 at year-end. Prepare the adjusting entry at year-end for the estimated uncollectible accounts.
- By the end of its first year of operations, Previts Corporation has credit sales of $690,000 and accounts receivable of $290,000. Given it’s the first year of operations, Previts’ management is unsure how much allowance for uncollectible accounts it should establish. One of the company’s competitors, which has been in the same industry for an extended period, estimates uncollectible accounts to be 2% of ending accounts receivable, so Previts decides to use that same amount. However, actual write-offs in the following year were 25% of the $290,000 (= $72,500). Previts’ inexperience in the industry led to making sales to high credit risk customers. 3. Should Previts prepare new financial statements for the first year of operations to show the correct amount of uncollectible accounts? Yes NoBy the end of its first year of operations, Previts Corporation has credit sales of $690,000 and accounts receivable of $290,000. Given it’s the first year of operations, Previts’ management is unsure how much allowance for uncollectible accounts it should establish. One of the company’s competitors, which has been in the same industry for an extended period, estimates uncollectible accounts to be 2% of ending accounts receivable, so Previts decides to use that same amount. However, actual write-offs in the following year were 25% of the $290,000 (= $72,500). Previts’ inexperience in the industry led to making sales to high credit risk customers. 2. By the end of the second year, Previts has the benefit of hindsight to know that estimates of uncollectible accounts in the first year were too low. By how much did Previts underestimate uncollectible accounts in the first year? How did this underestimation affect the reported amounts of total assets and expenses at the end of the…By the end of its first year of operations, Previts Corporation has credit sales of $690,000 and accounts receivable of $290,000. Given it’s the first year of operations, Previts’ management is unsure how much allowance for uncollectible accounts it should establish. One of the company’s competitors, which has been in the same industry for an extended period, estimates uncollectible accounts to be 2% of ending accounts receivable, so Previts decides to use that same amount. However, actual write-offs in the following year were 25% of the $290,000 (= $72,500). Previts’ inexperience in the industry led to making sales to high credit risk customers. Required: 1. Record the adjustment for uncollectible accounts at the end of the first year of operations using the 2% estimate of accounts receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the adjusting…
- By the end of its first year of operations, Previts Corporation has credit sales of $750,000 and accounts receivable of $350,000. Given it’s the first year of operations, Previts’ management is unsure how much allowance for uncollectible accounts it should establish. One of the company’s competitors, which has been in the same industry for an extended period, estimates uncollectible accounts to be 2% of ending accounts receivable, so Previts decides to use that same amount. However, actual write-offs in the following year were 25% of the $350,000 (= $87,500). Previts’ inexperience in the industry led to making sales to high credit risk customers.Required:1. Record the adjustment for uncollectible accounts at the end of the first year of operations using the 2% estimate of accounts receivable.2. By the end of the second year, Previts has the benefit of hindsight to know that estimates of uncollectible accounts in the first year were too low. By how much did Previts underestimate…During its first year of operations, Cullumber Company had credit sales of $3,701,300; $657,200 remained uncollected at year-end. The credit manager estimates that $40,500 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit Prepare the current assets section of the balance sheet for Cullumber Company. Assume that in addition to the receivables it has cash of $92,900, inventory of $131,400, and prepaid insurance of $8,500. (List Current Assets in order of liquidity.) CULLUMBER COMPANYBalance Sheet (Partial) Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant…During Burns Company's first year of operations, credit sales totaled $180,000 and collections on credit sales totaled $125,000. Burns estimates that bad debt losses will be 1.0% of credit sales. By year-end, Burns had written off $500 of specific accounts as uncollectible. Required: Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. Show the year-end balance sheet presentation for accounts receivable.
- During its first year of operations, Crane Company had credit sales of $3,064,300; $655,000 remained uncollected at year-end. The credit manager estimates that $36,900 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit List of Accounts Prepare the current assets section of the balance sheet for Crane Company. Assume that in addition to the receivables it has cash of $94,400, inventory of $135,200, and prepaid insurance of $8,500. (List Current Assets in order of liquidity.) CRANE COMPANY Balance Sheet (Partial) 24 %24 %24During its first year of operations, Sheridan Company had credit sales of $3,596,600; $660,700 remained uncollected at year-end. The credit manager estimates that $43,200 of these receivables will become uncollectible. Prepare the journal entry to record the estimated uncollectibles. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit List of Accounts Prepare the current assets section of the balance sheet for Sheridan Company. Assume that in addition to the receivables it has cash of $92,200, inventory of $134,100, and prepaid insurance of $8,100. (List Current Assets in order of liquidity.) SHERIDAN COMPANYBalance Sheet (Partial) $ $…During Burns Company's first year of operations, credit sales totaled $180,000 and collections on credit sales totaled $125,000. Burns estimates that bad debt losses will be 1.0% of credit sales. By year-end, Burns had written off $500 of specific accounts as uncollectible. Required: 1. Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. 2. Show the year-end balance sheet presentation for accounts receivable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 re all appropriate journal entries relative to uncollectible accounts and bad debt expense. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 Record the entry to write-off specific accounts. Note: Enter debits before credits. Transaction 1 Record entry General Journal Clear entry Debit Credit View general journal