During Burns Company's first year of operations, credit sales totaled $178,000 and collections on credit sales totaled $124,000. Burns estimates that bad debt losses will be 2.0% of credit sales. By year-end, Burns had written off $490 of specific accounts as uncollectible. Required: 1. Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. 2. Show the year-end balance sheet presentation for accounts receivable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Show the year-end balance sheet presentation for accounts receivable. Partial Balance Sheet $ < Required 1 0 Required 2 >

During Burns Company's first year of operations, credit sales totaled $178,000 and collections on credit sales totaled $124,000. Burns estimates that bad debt losses will be 2.0% of credit sales. By year-end, Burns had written off $490 of specific accounts as uncollectible. Required: 1. Prepare all appropriate journal entries relative to uncollectible accounts and bad debt expense. 2. Show the year-end balance sheet presentation for accounts receivable. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Show the year-end balance sheet presentation for accounts receivable. Partial Balance Sheet $ < Required 1 0 Required 2 >

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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Required information. [The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales. Credit sales $ 400,000 $1,000,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable. $ 900,000 debit Allowance for doubtful accounts $ 7,200 debit 2. Bad debts are estimated to be 4% of credit sales. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet. Current assets: $ 0
Innovative Tech Inc. (ITI) has been using the percentage of credit sales method to estimate bad debts. During November, ITI sold services on account for $130,000 and estimated that 3/4 of 1 percent of those sales would be uncollectible. Required: 1. Prepare the November adjusting entry for bad debts. 2. Starting in December, ITI switched to using the aging method. At its December 31 year-end, total Accounts Receivable is $89,900, aged as follows: (1) 1–30 days old, $74,000; (2) 31–90 days old, $12,000; and (3) more than 90 days old, $3,900. The average rate of uncollectibility for each age group is estimated to be (1) 12 percent, (2) 24 percent, and (3) 48 percent, respectively. Prepare a schedule to estimate an appropriate year-end balance for the Allowance for Doubtful Accounts. 3. Before the end-of-year adjusting entry is made, the Allowance for Doubtful Accounts has a $1,550 credit balance at December 31. Prepare the December 31 adjusting entry. 4. Show how the various accounts…
The following information applies to the questions displayed below.] At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 320,000 Credit sales $ 800,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 432,000 debit Allowance for doubtful accounts $ 4,300 debit 3. An aging analysis estimates that 5% of year-end accounts receivable are uncollectible. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31 balance sheet.
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Present the journal entry necessary to record each of the following items; assuming King Company uses the Allowance method of accounting for Uncollectible Accounts (Bad Debts). 1. Uncollectible Accounts Expense for the year is estimated to be 6% of Net Sales. Net Sales for the year are $100,000 and the Allowance account has a $600 credit balance 2. A $20,000 note is received from a customer on account. 3. The $800 balance in an individual customer's account is written off as uncollectible. 4. The company received $200 from a customer whose account had been previously written off as uncollectible. 5
Help During the current year, Glatras Electronics recorded credit sales of $710,000. Based on prior experience, it estimates a 4.5 percent bad debt rate on credit sales. Required: 1. Prepare journal entries for each of the following transactions. a. On October 28 of the current year, an account receivable for $2,800 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. 2. Complete the following table, indicating the amount and effect for each transaction. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the following table, indicating the amount and effect for each transaction. (Indicate decreases witha minus sign.) Income from Transaction Net Sales Gross Profit Operations a. b. < Required 1
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Churos Inc. began the current year with the following: Accounts receivable 2,000,000 Allowance for bad debts 100,000 During the current year, the following events transpired: Accounts written off 100,000 Cash sales 500,000 Sales on account 3,000,000 Bad debt expense recognized 200,000 At the end of the current year, the entity showed a balance in accounts receivable of P3,400,000 before the allowance for bad debts. Under cash basis, what amount should be reported as sales for the current year?A. 5,200,000B. 5,400,000C. 7,000,000D. 7,400,000
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