Mould Corporation sells to wholesalers on terms of 2/15, n/30. Mould has not cash sales but 50% of Mould's customers take advantage if the discount. Mould uses the gross profit method of recording sales and trade receivables. An analysis of Mould's trade receivables balances at December 31, 2021 revealed the following: Age Amount Collectibility 0 to 15 days 300,000 100% 16 to 30 days 180,000 95% 31 to 60 days 15,000 90% Over 60 days 7,500 P 1,500 TOTAL 502,500 In its December 31, 2021 statement of financial position, what amount should Mould report for allowance for discounts?
Mould Corporation sells to wholesalers on terms of 2/15, n/30. Mould has not cash sales but 50% of Mould's customers take advantage if the discount. Mould uses the gross profit method of recording sales and trade receivables. An analysis of Mould's trade receivables balances at December 31, 2021 revealed the following: Age Amount Collectibility 0 to 15 days 300,000 100% 16 to 30 days 180,000 95% 31 to 60 days 15,000 90% Over 60 days 7,500 P 1,500 TOTAL 502,500 In its December 31, 2021 statement of financial position, what amount should Mould report for allowance for discounts?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Mould Corporation sells to wholesalers on terms of 2/15, n/30. Mould has not cash sales but 50% of Mould's customers take advantage if the discount. Mould uses the gross profit method of recording sales and trade receivables. An analysis of Mould's trade receivables balances at December 31, 2021 revealed the following:
| Age | Amount | Collectibility |
| 0 to 15 days | 300,000 | 100% |
| 16 to 30 days | 180,000 | 95% |
| 31 to 60 days | 15,000 | 90% |
| Over 60 days | 7,500 | P 1,500 |
| TOTAL | 502,500 |
In its December 31, 2021
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education