During the current year, Giatras 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 Prepare journal entries for each of the following transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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. Show less A No Transaction General Journal Debit Credit a. Allowance for doubtful accounts 2,800 O Accounts receivable 2,800 O b. Bad debt expense 2,800 & Allowance for doubtful accounts 2,800 Which of the following transactions results in a decrease in the return on assets ratio? Multiple Choice Purchasing land by signing a long-term note payable. Collecting cash from an account receivable. Increasing the sales price of the products sold. An increase in the net profit margin ratio. Explanation Return on assets is net income divided by average total assets. Total assets increase by land purchased and the return on assets ratio therefore decreases.
During the current year, Giatras 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 Prepare journal entries for each of the following transactions. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 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. Show less A No Transaction General Journal Debit Credit a. Allowance for doubtful accounts 2,800 O Accounts receivable 2,800 O b. Bad debt expense 2,800 & Allowance for doubtful accounts 2,800 Which of the following transactions results in a decrease in the return on assets ratio? Multiple Choice Purchasing land by signing a long-term note payable. Collecting cash from an account receivable. Increasing the sales price of the products sold. An increase in the net profit margin ratio. Explanation Return on assets is net income divided by average total assets. Total assets increase by land purchased and the return on assets ratio therefore decreases.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:During the current year, Giatras 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
Prepare journal entries for each of the following transactions. (If no entry is required for a transaction/event, select
"No journal entry required" in the first account field.)
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.
Show less A
No
Transaction
General Journal
Debit
Credit
a.
Allowance for doubtful accounts
2,800 O
Accounts receivable
2,800 O
b.
Bad debt expense
2,800 &
Allowance for doubtful accounts
2,800
Transcribed Image Text:Which of the following transactions results in a decrease in the return on assets ratio?
Multiple Choice
Purchasing land by signing a long-term note payable.
Collecting cash from an account receivable.
Increasing the sales price of the products sold.
An increase in the net profit margin ratio.
Explanation
Return on assets is net income divided by average total assets. Total assets increase by land purchased and the return on assets ratio therefore
decreases.
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