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The following data were selected from the records of Sykes Company for the year ended December 31, current year Balances January 1, current year Accounts recevable (various customers) Allowance tor doubtful accounts S 120, 00e 8,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 510 n/30 (assume a unit sales price of $900 in all transactions). Transactions durtng current year a. Sold merchandise for cash. $244,000. b. Sold merchandise to R. Smith; Involce price. $8,000. c. Sold merchandise to K. Miller, Invoice price, $35.000. d. Two days after purchase date, R. Smith retumed one of the units purchased in (h and received account credit. e. Sold merchandise to B. Sears: Involce price, $26,000. f.R. Smith paid his account in full within the discount period. g. Colected $94,000 cash from customer sales on credit in pror year all within the discount periods h. K. Miller pald the Invoice In () within the discount perlod L Sold merchandise to R. Roy, involce price. $26,500. IThree days after paying the account in full, K. Miller returned seven defective unts and recelved a cash refund. k. After the discount perlod, collected $5,000 cash on an account recelvable on sales in a prior year L Wrote off a prior year account of $3.000 after deciding that the amount would never be collected m. The estimated bad debt rate used by the company was 10 percent of credit sales net of returns equired: Using the following categories, Indicate the effect of each isted transaction, Including the wte-off of the uncollectible account e adjusting entry for estimated bad debts (ignore cost of goods sold. The first transaction is used as an example (Round your nswers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a manus sagn) Sales Revenue Sales Discounts (taken) Sales Returns and Allowances Blad Debt Expense Transaction $ 244,000 8.000 35,000 500 d. 20.000 of 20500 k. Total $ 330.500|tS

The following data were selected from the records of Sykes Company for the year ended December 31, current year Balances January 1, current year Accounts recevable (various customers) Allowance tor doubtful accounts S 120, 00e 8,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 510 n/30 (assume a unit sales price of $900 in all transactions). Transactions durtng current year a. Sold merchandise for cash. $244,000. b. Sold merchandise to R. Smith; Involce price. $8,000. c. Sold merchandise to K. Miller, Invoice price, $35.000. d. Two days after purchase date, R. Smith retumed one of the units purchased in (h and received account credit. e. Sold merchandise to B. Sears: Involce price, $26,000. f.R. Smith paid his account in full within the discount period. g. Colected $94,000 cash from customer sales on credit in pror year all within the discount periods h. K. Miller pald the Invoice In () within the discount perlod L Sold merchandise to R. Roy, involce price. $26,500. IThree days after paying the account in full, K. Miller returned seven defective unts and recelved a cash refund. k. After the discount perlod, collected $5,000 cash on an account recelvable on sales in a prior year L Wrote off a prior year account of $3.000 after deciding that the amount would never be collected m. The estimated bad debt rate used by the company was 10 percent of credit sales net of returns equired: Using the following categories, Indicate the effect of each isted transaction, Including the wte-off of the uncollectible account e adjusting entry for estimated bad debts (ignore cost of goods sold. The first transaction is used as an example (Round your nswers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a manus sagn) Sales Revenue Sales Discounts (taken) Sales Returns and Allowances Blad Debt Expense Transaction $ 244,000 8.000 35,000 500 d. 20.000 of 20500 k. Total $ 330.500|tS

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 56P: The following selected information is taken from the financial statements of Arnn Company for its...
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Required Information The followng information apples to the questions displayed below] The following data were selected from the records of Sykes Company for the year ended December 31, current year. Balances January 1, current year Accounts recelvable (varlous custoners) Allowance for doubtful accounts S120,000 8,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 510, n/30 (assume a unit sales price of $900 in all transactions). Transactions during current year a. Sold merchandise for cash, $244,000. b. Sold merchandise to R. Smith: Involce price. $8.000. c. Sold merchandise to K. Miller. Invoice price, $35.000. d. Two days after purchase date, R. Smith retumed one of the unts purchased in ( and received account credit. e. Sold merchandise to B. Sears; Involce price, $26,000. f. R. Smith pald his account in full within the discount perod. g. Collected $94,000 cash from customer sales on credit in pror year, all within the discount periods. h. K. Miller pald the Invoice In () within the discount period 1. Sold merchandise to R. Roy, involce price. $26,500. Three days after paying the account in full, K. Miller returned seven defective unts and recelved a cash refund. k. After the discount perlod, collected $5,000 cash on an account recelvable on sales ina prior year LWrote off a prior year account of $3.000 after deciding that the amount would never be collected m. The estimated bad debt rate used by the company was 10 percent of credit sales net of returns Required: 1. Using the following categories, Indicate the effect of each isted transaction. Including the wte-off of the uncollectible account and the adjusting entry for estimäted bad debts (ignore cost of goods soldj. The first transaction s used as an example (Round your answers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a mnus sagn) Sales Revenue Sales Discounts (taken) Sales Returns and Allowances Elad Debt Expense Transaction S 244,000 3.000 35.000 500 d. 20,000 of 1. 20.500 k. m. Total $330.500S
Transcribed Image Text:Required Information The followng information apples to the questions displayed below] The following data were selected from the records of Sykes Company for the year ended December 31, current year. Balances January 1, current year Accounts recelvable (varlous custoners) Allowance for doubtful accounts S120,000 8,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 510, n/30 (assume a unit sales price of $900 in all transactions). Transactions during current year a. Sold merchandise for cash, $244,000. b. Sold merchandise to R. Smith: Involce price. $8.000. c. Sold merchandise to K. Miller. Invoice price, $35.000. d. Two days after purchase date, R. Smith retumed one of the unts purchased in ( and received account credit. e. Sold merchandise to B. Sears; Involce price, $26,000. f. R. Smith pald his account in full within the discount perod. g. Collected $94,000 cash from customer sales on credit in pror year, all within the discount periods. h. K. Miller pald the Invoice In () within the discount period 1. Sold merchandise to R. Roy, involce price. $26,500. Three days after paying the account in full, K. Miller returned seven defective unts and recelved a cash refund. k. After the discount perlod, collected $5,000 cash on an account recelvable on sales ina prior year LWrote off a prior year account of $3.000 after deciding that the amount would never be collected m. The estimated bad debt rate used by the company was 10 percent of credit sales net of returns Required: 1. Using the following categories, Indicate the effect of each isted transaction. Including the wte-off of the uncollectible account and the adjusting entry for estimäted bad debts (ignore cost of goods soldj. The first transaction s used as an example (Round your answers to the nearest whole dollar amount. Any decrease in account balances should be indicated by a mnus sagn) Sales Revenue Sales Discounts (taken) Sales Returns and Allowances Elad Debt Expense Transaction S 244,000 3.000 35.000 500 d. 20,000 of 1. 20.500 k. m. Total $330.500S
2. Show hoW the accounts related to the preceding sale and collection activities should be réported on the current year income statement. (Round your answers to the nearest whole dollar amount.) SYKES COMPANY Income Statement (partial) For the Year Ended December 31, Current Year Sales revenue S 330.500 Less: Sales discounts Less Sales returns and allowances Net sales revenue Selling, general, and administrative expenses Bad debt expense
Transcribed Image Text:2. Show hoW the accounts related to the preceding sale and collection activities should be réported on the current year income statement. (Round your answers to the nearest whole dollar amount.) SYKES COMPANY Income Statement (partial) For the Year Ended December 31, Current Year Sales revenue S 330.500 Less: Sales discounts Less Sales returns and allowances Net sales revenue Selling, general, and administrative expenses Bad debt expense
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