The following is a portion of the current assets section of the balance sheets of The Sweet Cafe at December 31, 2023 and 2022: Accounts receivable, less allowance for bad debts of $14,400 (for 2023) and $10,200 (for 2022). 12/31/23 $487,200 a. Accounts written off b1. Write off on the current ratio b2. Write off on net income and ROE c. Sweet Cafe's sales in 2023 12/31/22 $431,600 Required: a. If bad debts expense for 2023 totaled $32,800, what was the amount of accounts receivable written off during the yeam b. The December 31, 2023, Allowance account balance includes $6,800 for a past due account that is not likely to be collected. This account has not been written off. If it had been written off, what would have been the effect of the write off on: 1. The current ratio at December 31, 2023? 2. Net income and ROE for the year ended December 31, 2023? c. What do you suppose was the level of The Sweet Cafe's sales in 2023, compared to 2022?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following is a portion of the current assets section of the balance sheets of The Sweet Cafe at December 31, 2023 and
2022:
Accounts receivable, less allowance for bad debts of $14,400 (for
2023) and $10,200 (for 2022).
12/31/23 12/31/22
$487,200 $431,600
Required:
a. If bad debts expense for 2023 totaled $32,800, what was the amount of accounts receivable written off during the year?
b. The December 31, 2023, Allowance account balance includes $6,800 for a past due account that is not likely to be
collected. This account has not been written off. If it had been written off, what would have been the effect of the write
off on:
1. The current ratio at December 31, 2023?
2. Net income and ROE for the year ended December 31, 2023?
c. What do you suppose was the level of The Sweet Cafe's sales in 2023, compared to 2022?
a. Accounts written off
b1. Write off on the current ratio
b2. Write off on net income and ROE
c. Sweet Cafe's sales in 2023
Transcribed Image Text:The following is a portion of the current assets section of the balance sheets of The Sweet Cafe at December 31, 2023 and 2022: Accounts receivable, less allowance for bad debts of $14,400 (for 2023) and $10,200 (for 2022). 12/31/23 12/31/22 $487,200 $431,600 Required: a. If bad debts expense for 2023 totaled $32,800, what was the amount of accounts receivable written off during the year? b. The December 31, 2023, Allowance account balance includes $6,800 for a past due account that is not likely to be collected. This account has not been written off. If it had been written off, what would have been the effect of the write off on: 1. The current ratio at December 31, 2023? 2. Net income and ROE for the year ended December 31, 2023? c. What do you suppose was the level of The Sweet Cafe's sales in 2023, compared to 2022? a. Accounts written off b1. Write off on the current ratio b2. Write off on net income and ROE c. Sweet Cafe's sales in 2023
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