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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Flimflam Corp had sales to customers of $475,000 during 2015. The company has consistently experienced a 35% gross profit percentage and estimates that 5% of all sales will be returned. During 2015, customers returned merchandise for credit of $18,000 to their accounts. The balance in the allowance for sales returns account at the beginning of 2015 was $24,000. What is the balance in the allowance for sales returns account at the end of 2015?
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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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Paul & Griffon manufactures and markets many products you use every day. In 2016, sales for the company were $93,000 (all amounts in millions). The annual report did not report the amount of credit sales, so we will assume that all sales were on credit. The average gross profit percentage was 51.2 percent. Account balances for the year follow: ts Beginning Ending Accounts receivable ЕВook $5,300 $5,700 (net) Inventory 6,080 6,100 Hint Required: Print 1. Compute the following turnover ratios. 2. By dividing 365 by your ratios from requirement 1, calculate the average days to collect receivables and the average days to sell inventory. ferences Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the following turnover ratios. (Do not round intermediate calculations. Round your final answers to 1 decimal place.) Receivables Turnover Ratio Inventory Turnover Ratio 00
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During 2018, its first year of operations, Hollis Industries recorded sales of $10,600,000 and experienced returnsof $720,000. Cost of goods sold totaled $6,360,000 (60% of sales). The company estimates that 8% of all saleswill be returned. Prepare the year-end adjusting journal entries to account for anticipated sales returns, assumingthat all sales are made on credit and all accounts receivable are outstanding.
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Knight Roundtable Co. had annual credit sales of $1,080,000 and an average collection period of 32 days in 2018. Assume a 360-day year. What were the company’s average accounts receivable balance? Accounts receivable are equal to the average daily credit sales times the average collection period. Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 49,000 units per year, an ordering cost of $8 per order, and carrying costs of $1.60 per unit.
During the year ended December 31, 2015, Kelly’s Camera Shop had sales revenue of $170,000,of which $85,000 was on credit. At the start of 2015, Accounts Receivable showed a $10,000 debitbalance and the Allowance for Doubtful Accounts showed a $600 credit balance. Collections ofaccounts receivable during 2015 amounted to $68,000.Data during 2015 follow:a. On December 10, a customer balance of $1,500 from a prior year was determined to be uncollectible, so it was written off.b. On December 31, a decision was made to continue the accounting policy of basing estimatedbad debt losses on 2 percent of credit sales for the year.Required:1. Give the required journal entries for the two events in December.2. Show how the amounts related to Accounts Receivable and Bad Debt Expense would bereported on the balance sheet and income statement for 2015.3. On the basis of the data available, does the 2 percent rate appear to be reasonable? Explain.

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