Effect of doubtful accounts on net income During its first year of operations, Mack's Plumbing Supply had sales of $390,000, wrote off $6,000 of accounts as uncollectible using the direct write-off method, and reported net income of $42,900. Assume that during the second year of operations Mack's Plumbing Supply had sales of $468,000, wrote off $7,200 of accounts as uncollectible using the direct write-off method, and reported net income of $46,800. a. Determine what net income would have been in the second year if the allowance method (using 1.25% of sales) had been used in both the first and second years, fill in the blank 1 of 25 b. Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been used in both the first and second years. If required, use the minus sign to indicate a "debit" balance. fill in the blank 2 of 25

Effect of doubtful accounts on net income During its first year of operations, Mack's Plumbing Supply had sales of $390,000, wrote off $6,000 of accounts as uncollectible using the direct write-off method, and reported net income of $42,900. Assume that during the second year of operations Mack's Plumbing Supply had sales of $468,000, wrote off $7,200 of accounts as uncollectible using the direct write-off method, and reported net income of $46,800. a. Determine what net income would have been in the second year if the allowance method (using 1.25% of sales) had been used in both the first and second years, fill in the blank 1 of 25 b. Determine what the balance of the allowance for doubtful accounts would have been at the end of the second year if the allowance method had been used in both the first and second years. If required, use the minus sign to indicate a "debit" balance. fill in the blank 2 of 25

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 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

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Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
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ffect of Doubtful Accounts on Net Income During its first year of operations, Mack’s Plumbing Supply Co. had sales of $450,000, wrote off $7,200 of accounts as uncollectible using the direct write-off method, and reported net income of $49,500. Determine what the net income would have been if the allowance method had been used, and the company estimated that 1 3/4% of sales would be uncollectible.$
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Effect of Doubtful Accounts on Net Income) During its first year of operations, Fisher Plumbing Supply Co. had sales of $590,000, wrote off $9,400 of accounts as uncollectible using the direct write-off method, and reported net income of $64,900. Determine what the net income would have been if the allowance method had been used, and the company estimated that 1 1/4% of sales would be uncollectible. 72,275 X
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