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Requirement 1: Assuming Obermeyer Imports uses debt aging method and estimates that bad debts would be $22,000.

Requirement 1: Assuming Obermeyer Imports uses debt aging method and estimates that bad debts would be $22,000.

FINANCIAL ACCOUNTING
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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Requirement 1: Assuming Obermeyer Imports uses debt aging method and estimates that bad debts would be $22,000. (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (b) Enter the January 1, 2021, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T-accounts), and determine the balances. (c) Prepare the journal entry to record bad debt expense for 2021. (d) Compute the accounts receivable turnover for the year 2021. Requirement 2: Assuming Obermeyer Imports uses percentage of sales method. Past experience indicates that estimated bad debt expense are usually 0.5% on sales. (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (b) Enter the January 1, 2021, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T-accounts) and determine the balances. (c) Prepare the journal entry to record bad debt expense for 2021. (d) Compute the aeeounts reeeivable turnover for the year 2021.
Transcribed Image Text:Requirement 1: Assuming Obermeyer Imports uses debt aging method and estimates that bad debts would be $22,000. (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (b) Enter the January 1, 2021, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T-accounts), and determine the balances. (c) Prepare the journal entry to record bad debt expense for 2021. (d) Compute the accounts receivable turnover for the year 2021. Requirement 2: Assuming Obermeyer Imports uses percentage of sales method. Past experience indicates that estimated bad debt expense are usually 0.5% on sales. (a) Prepare the journal entries to record each of these five transactions. Assume that no cash discounts were taken on the collections of accounts receivable. (b) Enter the January 1, 2021, balances in Accounts Receivable and Allowance for Doubtful Accounts. Post the entries to the two accounts (use T-accounts) and determine the balances. (c) Prepare the journal entry to record bad debt expense for 2021. (d) Compute the aeeounts reeeivable turnover for the year 2021.
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