The following data were selected from the records of Sykes Company for the year ended December 31, 2014. Balances January 1, 2014 Accounts receivable (various customers) Allowance for doubtful accounts $ Show Transcribed Text 119,000 9,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 4/10, n/30 (assume a unit sales price of $700 in all transactions and use the gross method to record sales revenue). Transactions during 2014 a. Sold merchandise for cash, $266,000. S c b. Sold merchandise to R. Smith; invoice price, $11,500. c. Sold merchandise to K. Miller, invoice price, $26,000. d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit. e. Sold merchandise to B. Sears; invoice price, $25,000. f. R. Smith paid his account in full within the discount period. Collected $88,000 cash from customer sales on credit in prior year, all within the discount periods. 9. h. K. Miller paid the invoice in (c) within the discount period. i. Sold merchandise to R. Roy; invoice price, $23,500. j. Three days after paying the account in full, K. Miller returned seven defective units and received a cash refund. k. After the discount period, collected $7,000 cash on an account receivable on sales in a prior year. 1. Wrote off a 2013 account of $3,000 after deciding that the amount would never be collected. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns. m.
The following data were selected from the records of Sykes Company for the year ended December 31, 2014. Balances January 1, 2014 Accounts receivable (various customers) Allowance for doubtful accounts $ Show Transcribed Text 119,000 9,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 4/10, n/30 (assume a unit sales price of $700 in all transactions and use the gross method to record sales revenue). Transactions during 2014 a. Sold merchandise for cash, $266,000. S c b. Sold merchandise to R. Smith; invoice price, $11,500. c. Sold merchandise to K. Miller, invoice price, $26,000. d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and received account credit. e. Sold merchandise to B. Sears; invoice price, $25,000. f. R. Smith paid his account in full within the discount period. Collected $88,000 cash from customer sales on credit in prior year, all within the discount periods. 9. h. K. Miller paid the invoice in (c) within the discount period. i. Sold merchandise to R. Roy; invoice price, $23,500. j. Three days after paying the account in full, K. Miller returned seven defective units and received a cash refund. k. After the discount period, collected $7,000 cash on an account receivable on sales in a prior year. 1. Wrote off a 2013 account of $3,000 after deciding that the amount would never be collected. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns. m.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Question
Please Do not Give Image Format
![Required information
[The following information applies to the questions displayed below.]
The following data were selected from the records of Sykes Company for the year
ended December 31, 2014.
Balances January 1, 2014
Accounts receivable (various
customers)
Allowance for doubtful accounts
$
Show Transcribed Text
119,000
9,000
In the following order, except for cash sales, the company sold merchandise and made
collections on credit terms 4/10, n/30 (assume a unit sales price of $700 in all
transactions and use the gross method to record sales revenue).
Transactions during 2014
a. Sold merchandise for cash, $266,000.
3
c
b. Sold merchandise to R. Smith; invoice price, $11,500.
c. Sold merchandise to K. Miller; invoice price, $26,000.
d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and
received account credit.
e. Sold merchandise to B. Sears; invoice price, $25,000.
f. R. Smith paid his account in full within the discount period.
Collected $88,000 cash from customer sales on credit in prior year, all within the
discount periods.
g.
h. K. Miller paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Roy; invoice price, $23,500.
j. Three days after paying the account in full, K. Miller returned seven defective units
and received a cash refund.
k.
After the discount period, collected $7,000 cash on an account receivable on sales in
a prior year.
I.
Wrote off a 2013 account of $3,000 after deciding that the amount would never be
collected.
The estimated bad debt rate used by the company was 1.0 percent of credit sales net
of returns.
m.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e9c3dfb-2396-480a-9636-f992e16788d7%2Ffa9cd040-30c6-4af2-ad4f-cbb2176b95b4%2Fwkkmtf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
The following data were selected from the records of Sykes Company for the year
ended December 31, 2014.
Balances January 1, 2014
Accounts receivable (various
customers)
Allowance for doubtful accounts
$
Show Transcribed Text
119,000
9,000
In the following order, except for cash sales, the company sold merchandise and made
collections on credit terms 4/10, n/30 (assume a unit sales price of $700 in all
transactions and use the gross method to record sales revenue).
Transactions during 2014
a. Sold merchandise for cash, $266,000.
3
c
b. Sold merchandise to R. Smith; invoice price, $11,500.
c. Sold merchandise to K. Miller; invoice price, $26,000.
d. Two days after purchase date, R. Smith returned one of the units purchased in (b) and
received account credit.
e. Sold merchandise to B. Sears; invoice price, $25,000.
f. R. Smith paid his account in full within the discount period.
Collected $88,000 cash from customer sales on credit in prior year, all within the
discount periods.
g.
h. K. Miller paid the invoice in (c) within the discount period.
i. Sold merchandise to R. Roy; invoice price, $23,500.
j. Three days after paying the account in full, K. Miller returned seven defective units
and received a cash refund.
k.
After the discount period, collected $7,000 cash on an account receivable on sales in
a prior year.
I.
Wrote off a 2013 account of $3,000 after deciding that the amount would never be
collected.
The estimated bad debt rate used by the company was 1.0 percent of credit sales net
of returns.
m.
Transcribed Image Text:Required:
1. Using the following categories, indicate the effect of each listed transaction, including
the write-off of the uncollectible account and the adjusting entry for estimated bad
debts (ignore cost of goods sold). The first transaction is used as an example. (Round
your answers to the nearest whole dollar amount. Amounts to be deducted should
be indicated by a minus sign.)
Show Transcribed Text
Transaction
a.
b.
C.
d.
e.
f.
9.
h.
i.
j.
k
1.
m.
Total
Sales
Revenue
$ 266,000
$ 266,000 $
Show Transcribed Text
Sales
Discounts
(taken)
Sales
Returns and
Allowances
Net sales revenue
Operating expenses
0 $
SYKES COMPANY
Income Statement (partial)
For the Year Ended December 31, 2014
Bad Debt
Expense
0 S
2. Show how the accounts related to the preceding sale and collection activities should
be reported on the 2014 income statement. (Treat sales discounts as a contra-
revenue.)
0
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