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 accounts receivable turnover for the year 2021.
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 accounts receivable turnover for the year 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 accounts receivable turnover for the year 2021.
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