The December 31, 2009 balance sheet of Sauder Company had Accounts Receivable of $500,000 and a creditbalance in Allowance for Doubtful Accounts of $33,000. During 2010, the following transactions occurred: sales onaccount $1,400,000; sales returns and allowances, $50,000; collections from customers, $1,150,000; accountswritten off $35,000; previously written off accounts of $5,000 were collected. Instructions (a) Journalize the 2010transactions. (b) If the company uses the percentage sales basis to estimate bad debts expense and anticipates 2%of net sales to be uncollectible, what is the adjusting entry at December 31, 2010 ? (c) If the company uses thepercentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts areexpected to be 4% of accounts receivable, what is the adjusting entry at December 31, 2010? (d) Which basis wouldproduce a higher net income for 2010 and by how much?JC39. The December 31, 2009 balance sheet of Sauder Company had Accounts Receivable of $500,000 and acredit balance in Allowance for Doubtful Accounts of $33,000. During 2010, the following transactionsoccurred: sales on account $1,400,000; sales returns and allowances, $50,000; collections fromcustomers, $1,150,000; accounts written off $35,000; previously written off accounts of $5,000 werecollected.Instructions(a) Journalize the 2010 transactions.(b) If the company uses the percentage of sales basis to estimate bad debts expense and anticipates2% of net sales to be uncollectible, what is the adjusting entry at December 31, 2010?(c) If the company uses the percentage of receivables basis to estimate bad debts expense anddetermines that uncollectible accounts are expected to be 4% of accounts receivable, what is theadjusting entry at December 31, 2010?(d) Which basis would produce a higher net income for 2010 and by how much?

Journal entry : Journal entry is a method of recording financial transactions in the book of…

39. The December 31, 2009 balance sheet of Sauder Company had Accounts Receivable of $500,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2010, the following transactions occurred: sales on account $1,400,000; sales returns and allowances, $50,000; collections from customers, $1,150,000; accounts written off $35,000; previously written off accounts of $5,000 were collected. Instructions (a) Journalize the 2010 transactions. (b) If the company uses the percentage of sales basis to estimate bad debts expense and anticipates 2% of net sales to be uncollectible, what is the adjusting entry at December 31, 2010? (c) If the company uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of accounts receivable, what is the adjusting entry at December 31, 2010? (d) Which basis would produce a higher net income for 2010 and by how much?

39. The December 31, 2009 balance sheet of Sauder Company had Accounts Receivable of $500,000 and a credit balance in Allowance for Doubtful Accounts of $33,000. During 2010, the following transactions occurred: sales on account $1,400,000; sales returns and allowances, $50,000; collections from customers, $1,150,000; accounts written off $35,000; previously written off accounts of $5,000 were collected. Instructions (a) Journalize the 2010 transactions. (b) If the company uses the percentage of sales basis to estimate bad debts expense and anticipates 2% of net sales to be uncollectible, what is the adjusting entry at December 31, 2010? (c) If the company uses the percentage of receivables basis to estimate bad debts expense and determines that uncollectible accounts are expected to be 4% of accounts receivable, what is the adjusting entry at December 31, 2010? (d) Which basis would produce a higher net income for 2010 and by how much?

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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