FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Credit sales (for year) $965,000
Credit sales returns and allowances (for year) 82,000
Allowance for doubtful debts (30 June 2020) 1,200 CR
Balance
% estimated uncollectable
Accounts not yet due $ 96,450 1%
Accounts overdue:
10-30 days $ 31,230 5%
31-60 days $ 22,760 10%
61-120 days $ 16,540 30%
121 days and over $ 9,372 60%
Total $ 176,352
Using the data in the tables above, present the general
(i) Percentage of net credit sales approach assuming bad debts are provided for as 2% of net credit sales.
(ii) Ageing of accounts receivable method using the data above.
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- Nonearrow_forwardWalmart Inc (WMT) has the following excerpts from their financial statements January 31, 2022 January 31, 2021 Net Receivables * (in $ Millions) 8,280 6,516 *Net Receivable = Gross receivable minus Allowance Walmart’s fiscal year “FY22” is defined as the period between February 1, 2021 – January 31, 2022 Gross (Accounts) Receivables, January 31, 2022: $9,265 Million Gross Receivables, January 31, 2021: $7,421 Million Accounts Written-off in FY 22 $221 Million 2% of credit sales is assumed to be uncollectable CALCULATE The ending balance of Allowance for uncollectable accounts as of January 31, 2022 Bad Debt Expense for the fiscal year ending on January 31, 2022. Collections during FY22arrow_forwardAdjusting Allowance for Doubtful Accounts and Bad Debt Expense Merck & Company reported the following in its financial statements. $ millions Accounts receivable, net Allowance for doubtful accounts 2016 2017 2018 2019 $8,773 $8,591 $8,839 $8,473 244 199 149 108 Adjust the balance sheet and income statement to reflect a 1.97874% of Allowance for doubtful accounts to Gross accounts receivables for each year. Assume a tax rate of 20%. • Round answers to one decimal. • Use a negative sign to indicate if the adjustment decreases an account balance. 2016 2017 2018 2019 Adjusted allowance for doubtful accts. $ $ $ $ Income Statement Adjustments Bad debts expense Income tax expense at 20% Net Income Balance Sheet Adjustments Allowance for doubtful accounts Accounts receivable, net Deferred tax liabilities Retained Earningsarrow_forward
- Dogarrow_forwardAnalysis of Loss Allowance Boulder View Corporation accounts for uncollectible accounts receivable using the allowance method. As of December 31, 2021, the credit balance in Loss Allowance was $130,000. During 2022, credit sales totaled $10,000,000, $90,000 of accounts receivable were written off as uncollectible, and recoveries of accounts previously written off amounted to $15,000. An aging of accounts receivable at December 31, 2022, showed the following Classification of Receivable Current 1-30 days past due 31-60 days past due. Over 60 days past due Accounts Receivable Balance Percentage Estimated As of December 31, 2022 $1,140,000 600,000 400,000 120,000 $2,260,000 Uncollectible 2% 10 23 75 Required: 1. Prepare the journal entry to record expected credit loss for 2022, assuming that the aging of the receivable method is applied. 2. Record journal entries to account for the write-off of $90,000 uncollectible accounts receivable and the collection of $15,000 in receivables that had…arrow_forwardImpairment of zero-interest notes receivable, GAAP vs. IFRS On December 31, 2020, Firth Company borrowed $62,092 from Paris Bank, signing a 5-year, $100,000 zero-interest note. The note was issued to yield 10% interest. Unfortunately, during 2022, Firth began to experience financial difficulty. As a result, at December 31, 2022, Paris Bank determined that it was probable that it would collect only $75,000 at maturity. The market rate of interest on loans of this nature is now 11%. 1,Instructions: On March 31, 2023, Paris learns that Firth will be able to repay the loan under the original terms. Paris Bank uses IFRS. Prepare the journal entry to be recorded on March 31, 2023, if any. Answer within 45mins.it would be really helpful!arrow_forward
- Current Attempt in Progress Presented below are data on three promissory notes. Determine the missing amounts. (Use 360 days for calculation. Do not round intermediate calculations.) Date of Note April 1 July 2 March 7 Save for Later Terms 60 days 30 days 6 months Maturity Date # Principal $720,000 90,000 125,200 Annual Interest Rate 5% $ 9% $ Total Interest Attempts: 0 of 1 used $600 Submit Answerarrow_forwardVikarmbhaiarrow_forwardPast-Due Category 0-30 days 31-90 days Over 90 days Accounts Receivable Total $22,480 36,540 15,330 Percentage Uncollectible 6% 17% 25% Based on the aging schedule above, the total uncollectible estimated bad debt for Growth Markets, LLC is [round your answer to the nearest dollar & include the dollar sign, $, in your answer)arrow_forward
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