Brief Exercise 5-47 Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018's credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000. Required: Use the percentage of credit sales method to calculate the bad debt expense.

Brief Exercise 5-47 Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018's credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000. Required: Use the percentage of credit sales method to calculate the bad debt expense.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 47BE: Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored...

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Brief Exercise 5-47 Percentage of Credit Sales Method Ruby Red manufactures, markets, and distributes citrus flavored soft drinks across the globe. Ruby Red hired a collection agency in 2018 to increase collection rates from customers. As a result, Ruby estimates that only 2% of its 2019 credit sales will be written off, compared to the 4% of 2018's credit sales that were estimated to be uncollectible. At December 31, 2019, Ruby Red has a $12,800 credit balance in its allowance for doubtful accounts and credit sales of $1,570,000. Required: Use the percentage of credit sales method to calculate the bad debt expense. $4
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Exercise D5-21 In the coming year, Swifty, Inc. will be introducing its first product, a wrist brace that protects serious video gamers from repetitive-motion injuries. The brace will be sold for $19 to retailers throughout the country. All sales will be made on account. An expected 73% of sales will be collected within the quarter of the sale, and another 22 % in the quarter following the sale. The remaining 5% of credit sales are expected to be uncollectible. The sales budget for the coming year is as follows: Budgeted sales units. Prepare Swifty, Inc.'s, cash Budgeted units sold Budgeted sales price Budgeted sales revenue 1st quarter sales 2nd quarter sales 3rd quarter sales 4th quarter sales Totals $ 1st Quarter 2nd Quarter 3rd Quarter 25,600 44,700 52,000 receipts budget for the coming year. (Enter answers in necessary fields only. Leave other fields blank. Do not enter 0.) Sales Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter $ Net Accounts Receivable $ $ $ $ $ Cash…
11:/13 Problem 2-2U S) William Company operates a customer loyalty program. T entity grants loyalty points for goods purchased. The loyalty points can be used by the customers in exchane for goods of the entity. The pointa have no expiry date. During 2020, the entity issued 100,000 award credits and expects that 80% of these award credits shall be redeemed The total stand-alone selling price of the award credita granted is reliably measured at P2,000,000. In 2020, the entity sold goods to customers for a total consideration of P8,000,000 based on stand-alone selling price. The award credits redeemed and the total award credits expected to be redeemed each year are as follows: Redeemed Expected to be redeemed 2020 2021 30,000 15,000 80% 90% 1. What is the revenue from points for 2020? 1,600,000 b. a. 1.500,000 600,000 d. 480,000 2. What is the revenue from points for 2021? a. 240,000 b. 200,000 120,000 04.29
QUESTION 11 The credit policy of Home Living Stores is 2/10 net 30. At present 25% of customers take advantage of the discount, 55% pay within the net period, and the remainder pay within 42 days of invoice. What will the effect on receivables be if all customers take the discount? cannot be determined lower than the present level higher than the present level no change from the present level
Exercise 7-8 (Algo) Sales Halifax Manufacturing allows its customers to return merchandise for any reason up to 90 days after delivery and receive a credit to their accounts. All of Halifax's sales are for credit (no cash is collected at the time of sale). The company began 2024 with a refund liability of $390,000. During 2024, Halifax sold merchandise on account for $13,300,000. Halifax's merchandise costs are 65% of merchandise selling price. Also during the year, customers returned $386,000 in sales for credit, with $213,000 of those being returns of merchandise sold prior to 2024, and the rest being merchandise sold during 2024. Sales returns, estimated to be 3% of sales, are recorded as an adjusting entry at the end of the year. Required: 1. Prepare entries to (a) record actual returns in 2024 of merchandise that was sold prior to 2024; (b) record actual returns in 2024 of merchandise that was sold during 2024; and (c) adjust the refund liability to its appropriate balance at year…
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