Fan-Tastic Sports Gear Inc. recorded $2,900,000 of sales last year and projects sales to increase by $350,000 in the current year. Last year, 80% of sales were on account, with övel300 customer accounts. Bad debt expense was $26, 187.1. Assume that Fan-Tastic Sports Gear Inc. used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2.240. The companyestimated uncollectible accounts expense using the percent of credit sales method and expected 0.75% of credit sales to be uncollectible. What is the amount of the adjusting entryto provide for doubtful accounts on December 317 Round all computations to the nearest dollar. S2. How much higher (lower) would Fan-Tastic Sports Gear Inc's net income have been under the allowance method assumption previously shown in (1) than under the direct write offmethod? (Enter "o it there is no change.) Higher by SBalance sheet3. Usina the allowance method, the net realizable value of the receivables would appear on which financial statement?

In this question, we have to do adjusting entry in allowance calculation. Under direct method, bad…

B00 customer accounts. Bad debt expense was $26,187. 1. Assume that Fan-Tastic Sports Gear Inc., used the allowance method last year, and estimated uncollectible accounts expense using the percent of credit sales method to provide for doubtful accounts on December 317? Round all computations to the ne 2. How much higher (lower) would Fan-Tastic Sports Gear Inc 's net inoome have bee

B00 customer accounts. Bad debt expense was $26,187. 1. Assume that Fan-Tastic Sports Gear Inc., used the allowance method last year, and estimated uncollectible accounts expense using the percent of credit sales method to provide for doubtful accounts on December 317? Round all computations to the ne 2. How much higher (lower) would Fan-Tastic Sports Gear Inc 's net inoome have bee

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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5. The Adams Company had total credit sales for the year of $1,500,000. As of year end, but before estimating bad debts, the company had a $130,000 debit balance in accounts receivable and a $500 credit balance in the allowance for uncollectible accounts. If the Adams Company estimates bad debts as 4% of ending accounts receivable, the journal entry of the Adams Company will be: a. Bad debt expense Allowance for doubtful accounts b. Bad debt expense Accounts receivable c. Bad debt expense Accounts receivable d. Bad debt expense Allowance for doubtful accounts $4,700 $5,200 $5,200 $5,700 $4,700 $5,200 $5,200 $5,700
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Walgreens provided the following information before any year end adjusments: Net credit sales are $120,000 Historical percentage of credit losses is 2% Allowance for doubtful accounts has a credit balance of $300. Accounts receivables ending balance is $47,000. What is the estimated bad debt expense using the percentage of credit sales method? A. $2,400 B. $2,100 C. $940 D. $2,700
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