Slow Running Shoes uses the Aging of receivables method to account foruncollectible accounts.The balance in the Allowance for uncollectible account as at Jan 1st, 2010 was $10,500(credit)The balance in the Accounts Receivable account as at Jan 1st, 201o was $133,000.The company completed the following transactions during 2010 and 2011:2010June 10thWrote off the balance of $600 from MannyMiller's account as uncollectibleRe-instated the account of Betty Lou andrecorded the collection of $1200 as paymentin full for her account which had been writtenoff earlierRecorded the uncollectible account expensebased on the aging schedule. The scheduleshowed that $14,100 of accounts receivablewas estimated as uncollectibleSeptember 15thDecember 31stDecember 31stMade the closing entry for the uncollectibleexpense account2011Sold inventory to Jack Frost, $1100, onJan 17accountWrote off as uncollectible the accounts ofBarry Semper, $1,500; Maria Jesus $1,400and Rory Paul $200Received 40% of the amount owed by JackAugust 15September 26Frost and wrote off the remainder asuncollectibleReceived 20% of the funds owed from MariaJesus as part payment of her account whichhad been written off earlier as uncollectibleThe Aging schedule showed an estimated$7500 as uncollectibleOctober 16December 314. Assume that the percentage of sales method was used instead by the company and that onDecember 31st, 2010 5% of 2010 's credit sales are estimated to be uncollectible. AssumeSales for 2010 were 520,000 (60% relates to cash sales)You are now required to:a. Determine the amount to be charged to the uncollectible expense account.b. (1) Prepare the Allowance for uncollectible account for 2010, using this method(ii) Prepare the balance sheet extract to show the net realizable value of the AccountsReceivable as at December 31 2010

Accounts receivable: It is a current asset of an organization. It is the amount due from customers…

4. Assume that the percentage of sales method was used instead by the company and that on December 31s, 2010 5% of 2010 's credit sales are estimated to be uncollectible. Assume Sales for 2010 were 520,000 (60% relates to cash sales) You are now required to: a. Determine the amount to be charged to the uncollectible expense account. b. (1) Prepare the Allowance for uncollectible account for 2010, using this method (ii) Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 2010

4. Assume that the percentage of sales method was used instead by the company and that on December 31s, 2010 5% of 2010 's credit sales are estimated to be uncollectible. Assume Sales for 2010 were 520,000 (60% relates to cash sales) You are now required to: a. Determine the amount to be charged to the uncollectible expense account. b. (1) Prepare the Allowance for uncollectible account for 2010, using this method (ii) Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31 2010

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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A company has net credit sales of $499000 for the year and it estimates that uncollectible accounts will be 3% of its Account Receivables balance. If Allowance for Doubtful Accounts has a credit balance of $2000 prior to adjustment, its balance after adjustment will be a credit of $16970. $14970. $12970. $14910.
Costless Corporation produces only one product. The standard material cost for that product is 6 gallons at $11.50 per gallon. During August, the company made 9,400 units of product and used 25,750 gallons. The actual price for materials was $10.50 per gallon. Which of the following is true? The materials quantity variance is $378,225 unfavorable. The materials quantity variance is $352,475 favorable. The materials quantity variance is $25,750 unfavorable. The materials quantity variance is $378,225 favorable.