Need help False Value Hardware began in 2011 with a credit balance of$32,000 in the allowance for sales returns account. Sales andcash collections from customers during the year were $650,000and $610,000, respectively. False Value estimates that 6% ofall sales will be returned. In 2011, customers returnedmerchandise for a credit of $28,000 to their accounts.False Value's 2011 income statement would report net sales of:a. $611,000b. $607,000c. $646,000d. $622,000

Step 1: Define Net SalesTotal income minus the sales returns, allowances, and discounts is known as…

Answered: False Value Hardware began in 2011 with…

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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Santa Maria Widget reviewed the following information from its accounting records for the year ended December 31, 2011, before adjustment:Sales during 2011$800,000Credit Sales are 80% of salesCollections from customers in 2011590,000Accounts Receivable 165,000Allowance for Uncollectible Accounts (before adjustment)2,050 credit Santa Maria Widget uses the percent-of-sales method, at 1.5%, to estimate uncollectible accounts for 2011. The president of the company wants to change to the aged accounts receivable method and estimates $7,500 as the uncollectible amount for 2011. For each method of determining the estimate amount, you are to provide: 1. the adjusting Journal entry. 2. the ending balance in the Allowance account. 3. the net realizable value of accounts receivable. my answer was: 1) Bad Debt Expense $9,600 Allowance for uncollectible accounts $9,600 2) Ending balance in allowance account $11,650 3)Net…
Watin Inc's 2015 income statement reported net sales of $5,000,000. Watin's average accounts receivable during 2015 amounted to $450,000. Using 360 days to a year, Watin's: A. Accounts receivable turnover rate is approximately 13.8 times. B. Accounts receivable turnover rate is approximately 1.25 times. C. Average number of days to collect an account receivable is 32 days. D. Accounts receivable turnover rate is approximately 2 times.
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