**REI Co-Op Inc. Financial Information Overview for 2022***The following unadjusted year-end trial balance information is available for REI Co-Op Inc. for the year 2022:*| | REI Co-Op ||-----------------------|-----------------------------------------------------------------------|| **Credit Sales** | \$4,800,000 || **Ending accounts receivable balance** | \$700,000 || **Ending allowance for credit losses balance** | \$150,000 || **Estimated uncollectibles** | 2% |**Instructions:**If REI Co-Op uses the sales revenue approach for estimating the allowance for credit losses, please calculate the new ending allowance for credit loss balance after proper adjustments to the accounts are recorded. Round your answer to the nearest whole number.---### **Step-by-Step Calculation:**1. **Determine the estimated uncollectible amount using credit sales:** - Estimated uncollectibles = Credit Sales * Estimated Uncollectibles Percentage - Estimated uncollectibles = \$4,800,000 * 2% - Estimated uncollectibles = \$96,0002. **Adjust the ending allowance for credit losses:** - Given that the unadjusted ending balance for the allowance for credit losses is \$150,000. - The new ending balance should reflect the 2% estimated from sales revenue, which we've calculated to be \$96,000. - However, the \$150,000 should already incorporate any amounts that have been recognized throughout the year.3. **Final Adjustment and Allowance Calculation:** - If the $ \$150,000 $ already represents the required allowance, no further adjustment might be necessary. But, to keep consistency with sales-based estimations, we determine the new allowance directly as the estimated uncollectibles from step 1. - Thus, the ending allowance should be updated to reflect $ \$96,000 $.Please note that in practical applications, the existing balance (\$150,000) and the calculated amount (\$96,000) might necessitate a clarifying journal entry adjust if there's a significant discrepancy.**Final Answer: The new ending allowance for credit loss balance is \$96,000.*****Remember:*** In professional contexts, understand the company's policy on adjustments to ensure precise financial reporting.

The allowance for credit losses is the contra asset for the business. The net account receivables is…

REI Co-Op Inc. has the following unadjusted year end trial balance information available for 2022. 48 49 Credit Sales 50 Ending accounts receivable balance 51 Ending allowance for credit losses balance 52 Estimated uncollectibles 52 REI Co-Op 4,800,000 700,000 150,000 If REI Co-Op. uses the sales revenue approach for estimating the allowance for credit losses. What is the new ending allowance for credit loss balance after the proper adjustments to the accounts are recorded: Please round to the nearest whole number.

REI Co-Op Inc. has the following unadjusted year end trial balance information available for 2022. 48 49 Credit Sales 50 Ending accounts receivable balance 51 Ending allowance for credit losses balance 52 Estimated uncollectibles 52 REI Co-Op 4,800,000 700,000 150,000 If REI Co-Op. uses the sales revenue approach for estimating the allowance for credit losses. What is the new ending allowance for credit loss balance after the proper adjustments to the accounts are recorded: Please round to the nearest whole number.

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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