Financial Accounting
4th Edition
ISBN: 9781259307959
Author: J. David Spiceland, Wayne M Thomas, Don Herrmann
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 5, Problem 5.19E
Compare the percentage of receivables method and the percentage-of-credit-sales method (LO5–9)
Suzuki Supply reports the following amounts at the end of 2018 (before adjustment).
Credit Sales for 2018 | $260,000 |
Accounts Receivable. December 31,2018 | 55,000 |
Allowance for Uncollectible Accounts. December 31,2018 | 1,100 (credit) |
Required:
1. Record the adjustment for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 12% of receivables will not be collected.
2. Record the adjustment for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 3% of credit sales will not be collected.
3. Calculate the effect on net income (before taxes) and total assets in 2018 for each method.
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Suzuki Supply reports the following amounts at the end of 2024 (before adjustment).
$248,000
43,000
1,000 (Credit)
Credit Sales for 2024
Accounts Receivable, December 31, 2024
Allowance for Uncollectible Accounts, December 31, 2024
Required:
1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 10% of
receivables will not be collected.
2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 2% of credit
sales will not be collected.
3. Calculate the effect on net income (before taxes) and total assets in 2024 for each method.
Suzuki Supply reports the following amounts at the end of 2024 (before adjustment).
Credit Sales for 2024
Accounts Receivable, December 31, 2024
Allowance for Uncollectible Accounts, December 31, 2024
$244,000
39,000
1,100 (Credit)
Required:
1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 12% of
receivables will not be collected.
2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 3% of credit
sales will not be collected.
3. Calculate the effect on net income (before taxes) and total assets in 2024 for each method.
Suzuki Supply reports the following amounts at the end of 2024 (before adjustment).
Credit Sales for 2024
Accounts Receivable, December 31, 2024
Allowance for Uncollectible Accounts, December 31, 2024
$248,000
43,000
1,000 (debit)
Required:
1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 10% of
receivables will not be collected.
2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. Suzuki estimates 2% of credit
sales will not be collected.
3. Calculate the effect on net income (before taxes) and total assets in 2024 for each method.
Chapter 5 Solutions
Financial Accounting
Ch. 5 - When recording a credit sale, what account do we...Ch. 5 - Prob. 2RQCh. 5 - Prob. 3RQCh. 5 - Briefly explain the accounting treatment for sales...Ch. 5 - Prob. 5RQCh. 5 - Prob. 6RQCh. 5 - 7.What two purposes do firms achieve by estimating...Ch. 5 - Prob. 8RQCh. 5 - 9.What are the financial statement effects of...Ch. 5 - Prob. 10RQ
Ch. 5 - Prob. 11RQCh. 5 - Prob. 12RQCh. 5 - Prob. 13RQCh. 5 - Prob. 14RQCh. 5 - Prob. 15RQCh. 5 - Discuss the differences between the allowance...Ch. 5 - 17.Notes receivable differ from accounts...Ch. 5 - With respect to notes receivable, explain what...Ch. 5 - Prob. 19RQCh. 5 - Interest on a note receivable typically is due...Ch. 5 - Prob. 21RQCh. 5 - Prob. 22RQCh. 5 - Prob. 23RQCh. 5 - Prob. 24RQCh. 5 - Prob. 25RQCh. 5 - Prob. 5.1BECh. 5 - Calculate net sales (LO52) Kellys Jewelry has the...Ch. 5 - At the end of the first war of operations,...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.5BECh. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.7BECh. 5 - Prob. 5.8BECh. 5 - Prob. 5.9BECh. 5 - Record the write-off of uncollectible accounts...Ch. 5 - Prob. 5.11BECh. 5 - Prob. 5.12BECh. 5 - Sanders Inc. is a small brick manufacturer that...Ch. 5 - Prob. 5.14BECh. 5 - Prob. 5.15BECh. 5 - Prob. 5.16BECh. 5 - Prob. 5.17BECh. 5 - Refer to the information in BE517, but now assume...Ch. 5 - Match each of the following terms with its...Ch. 5 - Prob. 5.1ECh. 5 - Prob. 5.2ECh. 5 - Record credit sale and cash collection with a...Ch. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - On April 25, Foreman Electric installs wiring in a...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Physicians Hospital has the following balances on...Ch. 5 - Record the adjustment for uncollectible accounts...Ch. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Consider the following transactions associated...Ch. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Record notes receivable an interest revenue (LO57)...Ch. 5 - Prob. 5.18ECh. 5 - Compare the percentage of receivables method and...Ch. 5 - Compare the percentage-of-receivables method and...Ch. 5 - Compare the accounting cycle using receivable...Ch. 5 - Prob. 5.1APCh. 5 - Prob. 5.2APCh. 5 - Record transactions related to accounts receivable...Ch. 5 - Record transactions related to uncollectible...Ch. 5 - Compare the direct write-off method to the...Ch. 5 - Prob. 5.6APCh. 5 - Overestimating future uncollectible accounts...Ch. 5 - Prob. 5.8APCh. 5 - Assume selected financial data for Walmart and...Ch. 5 - Calculate the amount of revenue to recognize...Ch. 5 - Prob. 5.2BPCh. 5 - Record transactions related to accounts receivable...Ch. 5 - Record transactions related to uncollectible...Ch. 5 - Compare the direct write-off method to the...Ch. 5 - Prob. 5.6BPCh. 5 - Underestimating future uncollectible accounts...Ch. 5 - Prob. 5.8BPCh. 5 - Assume selected financial data for Sun Health...Ch. 5 - Prob. 5.1APCPCh. 5 - American Eagle Outfitters, Inc. Financial...Ch. 5 - Prob. 5.3APFACh. 5 - Prob. 5.4APCACh. 5 - Prob. 5.5APECh. 5 - Prob. 5.6APIRCh. 5 - Written Communication You have been hired as a...Ch. 5 - Earnings Management Ernie Upshaw is the...
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