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3,400 is sold on terms 3/10, n s net sales?

3,400 is sold on terms 3/10, n s net sales?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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How to calculate net sales and some journal entries.

Merchandise invoiced at $8,400 is sold on terms 3/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales? Net sales
Transcribed Image Text:Merchandise invoiced at $8,400 is sold on terms 3/10, n/30. If the buyer pays within the discount period, what amount will be reported on the income statement as net sales? Net sales
E6-21 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method LO6-2. During the current year, Robby's Camera Shop had sales revenue of $160,000, of which $57,000 was on credit. At the start of the current year, Accounts Receivable showed a $20,000 debit balance and the Allowance for Doubtful Accounts showed a $1,100 credit balance. Collections of accounts receivable during the current year amounted to $55,000. Data during the current year follow: a. On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year. Required: 1. Prepare the required journal entries for the two items on December 31, the end of the accounting period. 2. Show how the amounts related to Accounts receivable and Bad debt expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Prepare the required journal entries for the two items on December 31, the end of the accounting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Journal entry worksheet Date Dec. 31 Req 2B 2 On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. Note: Enter debits before credits. Record entry General Journal Clear entry < Req 1 Debit Credit View general journal Req 2A > >
Transcribed Image Text:E6-21 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method LO6-2. During the current year, Robby's Camera Shop had sales revenue of $160,000, of which $57,000 was on credit. At the start of the current year, Accounts Receivable showed a $20,000 debit balance and the Allowance for Doubtful Accounts showed a $1,100 credit balance. Collections of accounts receivable during the current year amounted to $55,000. Data during the current year follow: a. On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year. Required: 1. Prepare the required journal entries for the two items on December 31, the end of the accounting period. 2. Show how the amounts related to Accounts receivable and Bad debt expense would be reported on the income statement and balance sheet for the current year. Disregard income tax considerations. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Prepare the required journal entries for the two items on December 31, the end of the accounting period. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list 1 Journal entry worksheet Date Dec. 31 Req 2B 2 On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. Note: Enter debits before credits. Record entry General Journal Clear entry < Req 1 Debit Credit View general journal Req 2A > >
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