McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of $2,400,000 in 2019. McKinney estimates 2.5% of its sales will be uncollectible At the end of the first quarter of 2020, McKinney & Co. reevaluates its receivables. McKinney's management decides that $7,300 due from Mangold Corporation will not be collectible. This amoun was previously included in the allowance account. On April 23, 2020, McKinney & Co. receives a check from Mangold Corporation for $7,300. Required: Prepare the journal entries for McKinney to record the collection of the account previously written off

McKinney & Co. estimates its uncollectible accounts as a percentage of credit sales. McKinney made credit sales of $2,400,000 in 2019. McKinney estimates 2.5% of its sales will be uncollectible At the end of the first quarter of 2020, McKinney & Co. reevaluates its receivables. McKinney's management decides that $7,300 due from Mangold Corporation will not be collectible. This amoun was previously included in the allowance account. On April 23, 2020, McKinney & Co. receives a check from Mangold Corporation for $7,300. Required: Prepare the journal entries for McKinney to record the collection of the account previously written off

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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Tommy lawyers has decided to apply the allowance method to account for its bad debts. They also apply the percentage of credit sales method set at 6%. At the end of their first month of operations, March 2020, they record the following transaction: 31* March 2020 Debit Bad Debts Expense $7,200 Credit Allowance for Doubtful Debts $7,200 During April 2020, their total write-offs were: Debit Allowance for Doubtful Debts $13,300 Credit Accounts Receivable $13,300 The prediction percentage, used for April's prediction of doubtful debts, should be: Select one: a. less the 6%. O b. greater than 6%. O c. equal to 6% O d. 0%.
The company had sales of $100,000 for the calendrer period 2021. The allowance for doubtful accounts total at the beginning of the year was $1500. $ 1800 of accounts receivable were written off during the year as uncollectible. Assuming the company estimates the allowance for bad debts to be 2% of sales, what is the year end adjusting entry? Would your answer be different if the company utilized the direct write off method? If so, how?
bints) On December 31, 2021, RTQ, Inc. reports an ending balance of $2,435,000 for Accounts Receivable and of $36,500 for the Allowance for Bad Debts. Credit sales for the year were $6,088,000 and the company estimates that 2% of credit sales will be uncollectible. Based on this information, how much will RTQ, Inc. need to credit its Allowance for Bad Debts as part of it adjusting entries? (AC 11) O $12,200 O $85,200 O $48,700 O $121,760
Martin Incorporated uses the percent-of-credit sales method to estimate uncollectibles. Total sales for the current year amount to $6,000,000 (2,800,000 were cash sales), and management estimates 5% of credit sales will be uncollectible. Allowance for Uncollectible Accounts prior to adjustment has a credit balance of $3,400. What is the balance in Allowance for Uncollectible Accounts after the adjustment for uncollectible account expense? O $235,700. O $152,000. $163,400 O $147,700. None of the above.
The following are the selected account balances of ABC Company taken from its trial balance as of December 31, 2020: Accounts Receivable P250,000 Allowance for Doubtful Accounts 25,000 Sales 12,000,000 Sales Returns and Allowances 120,000 Sales Discount 240,000 The bad debt accounts should be 2% of net Accounts Receivable. What is the net realizable value of Accounts Receivable? Select the correct response: P250,000 P245,000 P230,000 P220,500
Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods?
At the end of 2023, Ayayai Corp. has accounts receivable of $2.90 million and an allowance for expected credit losses of $115,000. On January 16, 2024, Ayayai determined that its $22,400 receivable from Blossom Company will not be collected, and management has authorized its write-off. On January 31, 2024, Ayayai received notification that the company will receive $0.15 for every $1.00 of accounts receivable relating to Sunland Company The company had previously written off 100% of the amount due from Sunland ($60,500). (a) Your answer is partially correct. Prepare the journal entry for Ayayai to write-off the Blossom receivable and any journal entry needed to reflect the notice regarding Sunland. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Blossom Company accounts receivable write-off:…
45.Ping Company finances some of its current operations by factoring its accounts receivable to a finance company. On July 1, 2021, the company factored P2,000,000 of its accounts receivable to Atlas Finance Company. Purchase price was 85% of the receivables factored. Atlas withheld 5% of the purchase price as protection against sales returns and allowances.Sales returns recorded by Ping on the factored accounts receivable totaled P30,000; the balance of the factor’s holdback was settled by the finance company on August 31, 2021.What was the total cash received by Ping Company from this factored accounts after full settlement by the factor?
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Pineapple Company has recorded bad debts expense in the past at a rate of 1.5% of net sales. In 2021, Pineapple decides to increase the estimate to 2%. If the new rate has been used in prior years, cumulative bad debts expense would have been P380,000 instead of P285,000. In 2021, bad debts expense will be P120,000 instead of P90,000. What amount of bad debts should the company report in its statement of comprehensive income as a result of a change in the estimate?a) P120,000b) P64,600c) P-0-d) P95,000 Please explain how you arrived with your answer. Thank you!
Wallace Inc. had a net realizable value of receivables of $700,000 when they prepared an aging of the accounts receivable as of Dec 31,2020. Additional information is available as follows: What would be the uncollectible accounts expense for 2020? $32,000 $28,000 $18,000 $50,000
During 2021, its first year of operations, Pave Construction provides services on account of $156,000. By the end of 2021, cash collections on these accounts total $108,000. Pave estimates that 20% of the uncollected accounts will be uncollectible, In 2022, the company writes off uncollectible accounts of $8,640. 2-a. Record the write-off of accounts receivable in 2022. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.)