1. Ground's estimated bad debts expense for 2016 based on net credit sales is:A. 12,000B. 44,300C. 45,000D. 56,250 2. What is the net realizable value of Ground's accounts receivable on December 31,2016?A. 1,377,700B. 1,397,700C. 1,435,000D. 1,435,700 Ground Corporation applies the allowance method to value its accounts receivable. The company estimates itsbad debts based on past experience, which indicates that 1.875% of net credit sales will be uncollectible. Itstotal sales for the year ended December 31, 2016 amounted to P1,000,000, including cash sales of P400,000.After a thorough evaluation of the accounts receivable from Fire Company amounting to P20,000, Ground hasdecided to write-off this account before year-end adjustments are made. Shown below are Ground's accountbalances on December 31, 2016, before any adjustments and the P20,000 write-off:4,000,0001,500,000250,00033,000SalesAccounts receivableSales discountsAllowance for bad debtsSales returns and allowances350,000Bad debts expenseGround has decided to value its accounts reccivable using the statement of financial position approach assuggested by its external auditors. Presented below is the aging of the accounts receivable subsidiary ledgeraccounts on December 31, 2016:Balance100,000256,000654,00050,000420,0001,480,00060 davs 61-90 days 91-120 days > 120 days100,000180,000500,000AccountAnt Co.Bird Corp.76,000154,000Cat Inc.Dog Corp.Elephant Co.50,000420,000420,00085%Total780,00099%230,00095%50,00060%% collectible

Credit sale=4000000-400000 =3600000

1. Ground's estimated bad debts expense for 2016 based on net credit sales is: A. 12,000 B. 44,300 C. 45,000 D. 56,250 2. What is the net realizable value of Ground's accounts receivable on December 31,2016? A. 1,377,700 B. 1,397,700 C. 1,435,000 D. 1,435,700

1. Ground's estimated bad debts expense for 2016 based on net credit sales is: A. 12,000 B. 44,300 C. 45,000 D. 56,250 2. What is the net realizable value of Ground's accounts receivable on December 31,2016? A. 1,377,700 B. 1,397,700 C. 1,435,000 D. 1,435,700

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Create a ledger of Account Receivable and ledger of AFDD to find the bad debt by using this information; Alpha Company's accounts receivable and allowance for doubtful accounts balances were RM100000 and RM14000 (credit) respectively, at the beginning of 2012. During 2012, a customer defaults on a RM12000 balance related to goods purchased during 2011. By the end of the year, the company had mad credit sales of RM2400000 and collected RM2200000 on account. Estimates 1 percent of its credit sales will default.
PA6. 9.2 Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% for the balance sheet method. Record the year-end adjusting entry for 2018 bad debt using the income statement method. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $13,888; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
V. Information related to Izmir A.Ş. for 2017 is summarized below. Total credit sales +920,000 369,000 23,400 Accounts receivable at December 31 Bad debts written off Instructions (a) What amount of bad debt expense will Izmir report if it uses the direct write-off method of accounting for bad debts? (b) Assume that Izmir decides to estimate its bad debt expense to be 3% of credit sales. What amount of bad debt expense will Izmir record if Allowance for Doubtful Accounts has a credit balance of t3,000? (c) Assume that Izmir decides to estimate its bad debt expense based on 7% of accounts receivable. What amount of bad debt expense will Izmir record if Allowance for Doubt- ful Accounts has a credit balance of t4,000? (d) Assume the same facts as in (c), except that there is a t2,000 debit balance in Allow- ance for Doubtful Accounts. What amount of bad debt expense will Izmir record?
Accounts Receivable $67,000 Allowance for Doubtful Accounts 1,300 (credit) During 2016, sales on credit amounted to $582,000, $552,800 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton’s estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton’s December 31, 2016, balance sheet. 3. Compute Shelton’s receivables turnover. (Round to one decimal place.) 4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
Po1
The company estimates 1% of sales revenue should be used to estimate for bad debt expense. what is the amount and what accounts
Estimating and reporting bad debts LO P2, P3 [The following information applies to the questions displayed below.] At December 31, 2017, Hawke Company reports the following results for its calendar year. Cash sales Credit sales $1,738,920 2,812,000 In addition, its unadjusted trial balance includes the following items. $852,036 debit 10,250 debit Accounts receivable Allowance for doubtful accountS Problem 9-2A Part 2 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part la. Current assets:
Adjusting 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 Earnings
Record the write off for bad debts based on the this information: Alpha Company's accounts receivable and allowance for doubtful accounts balances were RM100000 and RM14000 (credit) respectively, at the beginning of 2012. During 2012, a customer defaults on a RM12000 balance related to goods purchased during 2011. By the end of the year, the company had mad credit sales of RM2400000 and collected RM2200000 on account. Estimates 1 percent of its credit sales will default.
vi.3
Estimating Bad Debts from Receivables Balances Instructionss Chart of Accounts General Journal Balance Sheet Analysis IFRS Instructions The following information is extracted from Shelton Corporation's accounting records at the beginning of 2016: Accounts Receivable $67,000 Allowance for Doubtful Accounts 1,300 (credit) During 2016, sales on credit amounted to $582,000, $552,800 was collected on outstanding receivables and $2,600 of receivables were written off as uncollectible. On December 31, 2016, Shelton estimates its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Shelton's estimate of bad debt expense for 2016. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2016, balance sheet. 3. Compute Shelton's receivables turnover. (Round to one decimal place.) 4. If Sheldon uses IFRS, what might be the heading for the accounts receivable section Requirement 2?
Percentage of Credit Sales Method At December 31, 2018, Garneau has a $10,000 credit balance in its allowance for doubtful accounts. Garneau estimates that 3% of its 2018 credit sales will eventually default. During 2018, Garneau had credit sales of $1,324,400. Required: Estimate the bad debt expense under the percentage of credit sales method.$