Reliable Enterprises sells distressed merchandise on extended credit terms. Collections on these sales are not reasonably assured, and bad debt losses cannot bereasonably predicted. It is unlikely that repossessed merchandise is in condition to be re-sold. Therefore, Reliable uses the cost recovery method. Merchandise costing$30,750 was sold for $58,500 in 2017. Collections on this sale were $21,800 in 2017, $15,600 in 2018, and $21,100 in 2019.In its 2018 year-end balance sheet, Reliable would report installment receivables (net) of:Multiple Choice$21,100.$0.$4,000.$15,600.

Here in this question, we are required determine how much installment receivable should report. Cost…

Answered: Reliable Enterprises sells distressed…

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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Create a ledger of Account Receivable and ledger of AFDD to find the bad debt by using this information; Alpha Company's accounts receivable and allowance for doubtful accounts balances were RM100000 and RM14000 (credit) respectively, at the beginning of 2012. During 2012, a customer defaults on a RM12000 balance related to goods purchased during 2011. By the end of the year, the company had mad credit sales of RM2400000 and collected RM2200000 on account. Estimates 1 percent of its credit sales will default.
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A series of unrelated situations follow for several companies that use ASPE: (a) Larkspur Inc.’s unadjusted trial balance at December 31, 2020, included the following accounts: Debit Credit Allowance for doubtful accounts $8,000 Sales revenue $2,065,000 Sales returns and allowances 61,300 Sales discounts 3,900 Larkspur estimates its bad debt expense to be 1.5% of net sales. Determine its bad debt expense for 2020. (Round answer to 0 decimal places, e.g. 58,971.) Bad debt expense $Enter your answer in accordance to the question statement Save for Later Last saved 23 hours ago. Saved work will be auto-submitted on the due date. Attempts: 0 of 1 used Submit Answer (b) The parts of this question must be completed in order. This part will be available when you complete the part above. (c) The parts of this question must be completed in order. This part will be available when…
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Planet Music buys all of its inventory on credit. During 2015, Planet Music's inventory account increased by $10,000. Which of the following statements must be true for Planet Music during 2015? It made payments of less than $10,000 to suppliers. It made cash payments of $10,000 to suppliers. It made more cash payments to its suppliers than it recorded as cost of goods sold. It paid less cash to suppliers than it recorded as cost of goods sold.
Use Newell Brands, Inc.'s financial statement information to answer the following questions. Provide the following account balances for Newell Brands : December 31, 2020 December 31, 2019 Accounts Receivable (gross) Allowance for Doubtful Accounts Accounts Receivable, net Which of the above numbers represents the total amount Newell Brands is owed by customers as of December 31, 2020? Which of the above numbers represents the amount that Newell Brands believes it will not collect from its customers as of December 31, 2020? Which of the above numbers represents the amount that Newell Brands believes it will collect from its customers as of December 31, 2020? Provide the journal entry (both accounts and amounts) that Newell Brands must have made to record its estimate of Bad Debt Expense in 2020. Provide the journal entry (both accounts and amounts) that Newell Brands must…
Angelo’s Outlet used to report bad debt using the balance sheet method and is now switching to the income statement method. The percentage uncollectible will remain constant at 5%. Credit sales figures for 2019 were $866,000, and accounts receivable was $732,000. How much will Angelo’s Outlet report for 2019 bad debt estimation under the income statement method?
Record the write off for bad debts based on the this information: Alpha Company's accounts receivable and allowance for doubtful accounts balances were RM100000 and RM14000 (credit) respectively, at the beginning of 2012. During 2012, a customer defaults on a RM12000 balance related to goods purchased during 2011. By the end of the year, the company had mad credit sales of RM2400000 and collected RM2200000 on account. Estimates 1 percent of its credit sales will default.
Peru Industries began operations on January 1, 2020. During the next two years, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts (assume a perpetual inventory system). These transactions are summarized as follows: 2020 Sold merchandise on credit for $2,280,000, terms n/30 (COGS = $1,258,000). Wrote off uncollectible accounts receivable in the amount of $34,600. Received cash of $1,354,000 in payment of outstanding accounts receivable. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. 2021 Sold merchandise on credit for $2,982,000, terms n/30 (COGS = $1,619,000). Wrote off uncollectible accounts receivable in the amount of $53,900. Received cash of $2,246,000 in payment of outstanding accounts receivable. In adjusting the accounts on December 31, concluded that 1.5% of the outstanding accounts receivable would become uncollectible. The…
eBook Organics Plus is considering which bad debt estimation method works best for its company. It is deciding between the income statement method, balance sheet method of receivables, and balance sheet aging of receivables method. If it uses the income statement method, bad debt would be estimated at 4 percent of credit sales. If it were to use the balance sheet method, it would estimate bad debt at 12 percent of accounts receivable. If it were to use the balance sheet aging of receivables method, it would split its receivables into three categories: 0-30 days past due at 6 percent, 31-90 days past due at 19 percent, and over 90 days past due at 26 percent. There is currently a zero balance, transferred from the prior year's Allowance for Doubtful Accounts. The following information is available from the year-end income statement and balance sheet. 2018 Year-End Total for Organics Plus Credit Sales $1,880,000 Accounts Receivable 620,000 There is also additional Information regarding…

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