Here is information related to Pharoah Company for 2022. Total credit sales $1,590,000 Accounts receivable at December 31 839,000 Uncollectibles written off 34,700 (a) What amount of bad debt expense will Pharoah Company report if it uses the direct write-off method of accounting for uncollectibles? Bad debt Expense $ (b) Assume that Pharoah Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 5% of accounts receivable will become uncollectible. What amount of bad debt expense will the company record if Allowance for Doubtful Accounts has a credit balance of $2,8007 Bad debt Expense $ (c) Assume that Pharoah Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 5% of accounts receivable will become uncollectible. What amount of bad debt expense will the company record if Allowance for Doubtful Accounts has a debit balance of $1,200? Bad debt Expense $

Here is information related to Pharoah Company for 2022. Total credit sales $1,590,000 Accounts receivable at December 31 839,000 Uncollectibles written off 34,700 (a) What amount of bad debt expense will Pharoah Company report if it uses the direct write-off method of accounting for uncollectibles? Bad debt Expense $ (b) Assume that Pharoah Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 5% of accounts receivable will become uncollectible. What amount of bad debt expense will the company record if Allowance for Doubtful Accounts has a credit balance of $2,8007 Bad debt Expense $ (c) Assume that Pharoah Company uses the percentage-of-receivables basis to record bad debt expense and concludes that 5% of accounts receivable will become uncollectible. What amount of bad debt expense will the company record if Allowance for Doubtful Accounts has a debit balance of $1,200? Bad debt Expense $

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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Assume Simple Company had credit sales of $243,000 and cost of goods sold of $143,000 for the period. Simple uses the percentage of credit sales method and estimates that 2 percent of credit sales would result in uncollectible accounts. Before the end-of-period adjustment is made, the Allowance for Doubtful Accounts has a credit balance of $180. Required: What amount of Bad Debt Expense would the company record as an end-of-period adjustment?
Information related to Lady Gangster Ltd. For 2021 is summarized below: Total credit sales L5,000,00 Accounts receivable at December 31 1,750,000 Bad debts written off 66,000 Required: b. Assume that Lady Gangster Ltd. estimates its bad debts expense based on 8% of accounts receivable. What amount of bad debts expense will Lady Gangster record if it has an Allowance for Doubtful Accounts credit balance of L6,000?
Lindsey Herrmann has completed the basic format to be used in preparing the statement of cash flows (indirect method) for Longhorn Consultants. Listed below in random order are line items to be included in the statement of cash flows. Purchase of equipment Increase in inventory Increase in prepaid rent Payment of dividends Depreciation expense Increase in accounts receivable Increase in accounts payable. Loss on sale of land Net income Repayment of notes payable Cash received from the sale of land Issuance of common stock $229,000 28,000 7,500 36,000 14,000 52,000 21,000 13,000 63,000 47,000 4,500 246,000 Required: Prepare the statement of cash flows for Longhorn Consultants using the indirect method. (Am unts to be deducted and negative values should be indicated by a minus sign.) Cash Flows from Operating Activities LONGHORN CONSULTANTS Statement of Cash Flows For the Year Ended December 31, 2024 Adjustments to reconcile net income to net cash flows from operating activities: S
GG Company uses the percentage of sales method for recording bad debts expense. For the year, cash sales are $700,000 and credit sales are $2,500,000. Management estimates that 1% is the sales percentage to use. What adjusting entry will Company make to record the bad debts expense? Select one: a. Bad Debt Expense .25,000 Allowance for Doubtful Accounts 25,000 b. Bad Debt Expense.... .32,000 Accounts Receivable 32,000 C. Bad Debt Expense .32,000 Allowance for Doubtful Accounts 32,000 d. The answer does not exist e. Bad Debt Expense ..... 25,000 Accounts Receivable 25,000 HIBA F1 F2 F3 F4 F5 B/O F6 F7 F8 F9 F10 图 PRTSC SYSRQ F11 F12 # $ 4 & * 3 6 8 9 НOME 7 PGUP E Y ! ق 4 D. F H J K END PGON w. R
Tammany Professional Engineers uses the Percentage of Receivables method to account for bad debt. The following is a summary of Tammany’s Accounts Receivable Aging Report. Cash Sales $42,000 Credit Sales $21,000 Allowance for Uncollectible Accounts December 31, 2020 $4,375 Current > 30 >60 >90 $115,000 $98,000 $75,000 $15,000 Estimated Uncollectible 1% 2% 4% 5% Required: Prepare the total estimate of uncollectible accounts and give the amount of the required adjustment. Do not prepare a journal entry. Please show your work if possible. In addition to submitting your answer here, you should also write it down so you an use it for the next problem.
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The following unadjusted balances of Echo Company are presented at September 30, 2023: Dr. Cr. Accounts receivable $100 000 Sales returns and allowances 40 000 Allowance for doubtful accounts $ 2 500 Credit Sales 750 000 (a) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 6% of gross accounts receivable. (b) Prepare the journal entry for estimated bad debts assuming that doubtful accounts are estimated to be 1% of net sales
Information related to Tesco Company for 2020 is summarized below. Total credit sales $1,200,000 Accounts receivable at December 31 370,000 Bad debts written off 25,150 a) What amount of bad debts expense will Tesco Company report if it uses the direct write-off method of accounting for bad debts?
Moving to another question will save this response. Question 14 Sama company has the following unadjusted account balances at December 31, 2021; Total Sales of $720,000, Accounts Receivable of $205,000 and the allowance was estimated as 3.5% of the total Account Receivable. The Allowance for Doubtful Accounts had a credit balance of $2,400, before the estimate was made. Required: Prepare the adjusting journal entry to record bad debts expense for 2021. Answer in the following format [Note: This is just an example and is not related to the question] Jan 1 Dr. Cash...... 120 Cr. Owner capital.............. 120 10 (Mac) I %0 O
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Explain the differences and implications between the ‘allowance method’ and the ‘direct write-off method’ of accounting for bad debts.