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CHECK FIGURE: d. Accounts receivable (net) = $232,700 Selected unadjusted account balances at December 31, 2023, are shown below for Demron Servicing. Accounts receivable... Allowance for doubtful accounts.... Account Debit $70,000 Credit $ 1,100 480,000 Sales (all on credit). Sales discounts.. Required 8,000 a. Demron estimates that 1.5% of net credit sales will prove to be uncollectible. Prepare the adjusting entry required on December 31, 2023, to estimate uncollectible receivables. b. During 2024, credit sales were $620,000 (cost of sales $406,500); sales discounts of $12,000 were taken when accounts receivable of $440,000 were collected; and accounts written off during the year totaled $10,000. Prepare the entries for these transactions. c. Record the adjusting entry required on December 31, 2024 to estimate uncollectible receivables, assuming it is based on 1.5% of net credit sales. d. Show how accounts receivable would appear on the December 31, 2024, balance sheet. Analysis Component: Comment on the advantages and disadvantages of using the income statement approach for estimating uncollectibles.

CHECK FIGURE: d. Accounts receivable (net) = $232,700 Selected unadjusted account balances at December 31, 2023, are shown below for Demron Servicing. Accounts receivable... Allowance for doubtful accounts.... Account Debit $70,000 Credit $ 1,100 480,000 Sales (all on credit). Sales discounts.. Required 8,000 a. Demron estimates that 1.5% of net credit sales will prove to be uncollectible. Prepare the adjusting entry required on December 31, 2023, to estimate uncollectible receivables. b. During 2024, credit sales were $620,000 (cost of sales $406,500); sales discounts of $12,000 were taken when accounts receivable of $440,000 were collected; and accounts written off during the year totaled $10,000. Prepare the entries for these transactions. c. Record the adjusting entry required on December 31, 2024 to estimate uncollectible receivables, assuming it is based on 1.5% of net credit sales. d. Show how accounts receivable would appear on the December 31, 2024, balance sheet. Analysis Component: Comment on the advantages and disadvantages of using the income statement approach for estimating uncollectibles.

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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CHECK FIGURE: d. Accounts receivable (net) = $232,700 Selected unadjusted account balances at December 31, 2023, are shown below for Demron Servicing. Accounts receivable... Allowance for doubtful accounts.... Account Debit $70,000 Credit $ 1,100 480,000 Sales (all on credit). Sales discounts.. Required 8,000 a. Demron estimates that 1.5% of net credit sales will prove to be uncollectible. Prepare the adjusting entry required on December 31, 2023, to estimate uncollectible receivables. b. During 2024, credit sales were $620,000 (cost of sales $406,500); sales discounts of $12,000 were taken when accounts receivable of $440,000 were collected; and accounts written off during the year totaled $10,000. Prepare the entries for these transactions. c. Record the adjusting entry required on December 31, 2024 to estimate uncollectible receivables, assuming it is based on 1.5% of net credit sales. d. Show how accounts receivable would appear on the December 31, 2024, balance sheet. Analysis Component: Comment on the advantages and disadvantages of using the income statement approach for estimating uncollectibles.
Transcribed Image Text:CHECK FIGURE: d. Accounts receivable (net) = $232,700 Selected unadjusted account balances at December 31, 2023, are shown below for Demron Servicing. Accounts receivable... Allowance for doubtful accounts.... Account Debit $70,000 Credit $ 1,100 480,000 Sales (all on credit). Sales discounts.. Required 8,000 a. Demron estimates that 1.5% of net credit sales will prove to be uncollectible. Prepare the adjusting entry required on December 31, 2023, to estimate uncollectible receivables. b. During 2024, credit sales were $620,000 (cost of sales $406,500); sales discounts of $12,000 were taken when accounts receivable of $440,000 were collected; and accounts written off during the year totaled $10,000. Prepare the entries for these transactions. c. Record the adjusting entry required on December 31, 2024 to estimate uncollectible receivables, assuming it is based on 1.5% of net credit sales. d. Show how accounts receivable would appear on the December 31, 2024, balance sheet. Analysis Component: Comment on the advantages and disadvantages of using the income statement approach for estimating uncollectibles.
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