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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USE TGHE FOLLOWING TO SOLVE FOR QUESTION7 ONLY Tooele Company’s controller estimated bad debt expense using the percentage of accountsreceivable method. Total sales for the year were $500,000 of which 250,000 are on account.The ending balance in accounts receivable was $100,000. An examination of the outstandingaccounts at the end of the year indicates that approximately 12 percent of these accounts willultimately prove to be uncollectible. Before any adjusting entries, the balance in theAllowance for Doubtful Accounts is $700 (CREDIT). Which is part of the correct adjustingentry to record bad debt expense for the year?(The Allowance for Doubtful Accounts is also known as the Allowance for Bad Debts or theAllowance for Uncollectible Accounts.)a. CREDIT Allowance for Bad Debts for $11,300b. DEBIT Allowance for Bad Debts for $11,300c. CREDIT Allowance for Bad Debts for $12,000d. CREDIT Allowance for Bad Debts for $12,700e. DEBIT Allowance for Bad Debts for $14,700 5. Use the…
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