The following data were selected from the records of Sykes Company for the year ended December 31, current year. Balances January 1, current year Accounts receivable (various customers) Allowance for doubtful accounts $118,000 6,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 5/10, n/30 (assume a unit sales price of $700 in all transactions). Transactions during current year: a. Sold merchandise for cash, $238,000. b. Sold merchandise to R. Smith; invoice price, $10,500. c. Sold merchandise to K. Miller; invoice price, $31,000. 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, $27,000. f. R. Smith paid his account in full within the discount period. g. Collected $97,000 cash from customer sales on credit in prior year, all within the discount periods. h. K. Miller paid the invoice in (c) within the discount period. I. Sold merchandise to R. Roy; invoice price, $27,500. 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 $4,000 cash on an account receivable on sales in a prior year. 1. Wrote off a prior year account of $4,000 after deciding that the amount would never be collected. m. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns. P6-1 Part 2 2. Show how the accounts related to the preceding sale and collection activities should be reported on the current year income statement. Note: Round your answers to the nearest whole dollar amount.
The following data were selected from the records of Sykes Company for the year ended December 31, current year. Balances January 1, current year Accounts receivable (various customers) Allowance for doubtful accounts $118,000 6,000 In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 5/10, n/30 (assume a unit sales price of $700 in all transactions). Transactions during current year: a. Sold merchandise for cash, $238,000. b. Sold merchandise to R. Smith; invoice price, $10,500. c. Sold merchandise to K. Miller; invoice price, $31,000. 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, $27,000. f. R. Smith paid his account in full within the discount period. g. Collected $97,000 cash from customer sales on credit in prior year, all within the discount periods. h. K. Miller paid the invoice in (c) within the discount period. I. Sold merchandise to R. Roy; invoice price, $27,500. 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 $4,000 cash on an account receivable on sales in a prior year. 1. Wrote off a prior year account of $4,000 after deciding that the amount would never be collected. m. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns. P6-1 Part 2 2. Show how the accounts related to the preceding sale and collection activities should be reported on the current year income statement. Note: Round your answers to the nearest whole dollar amount.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please Correct answer with Explanation And Do not give solution in image format
Transcribed Image Text:The following data were selected from the records of Sykes Company for the year ended December 31, current year.
Balances January 1, current year
Accounts receivable (various customers)
Allowance for doubtful accounts
$118,000
6,000
In the following order, except for cash sales, the company sold merchandise and made collections on credit terms 5/10,
n/30 (assume a unit sales price of $700 in all transactions).
Transactions during current year:
a. Sold merchandise for cash, $238,000.
b.
Sold merchandise to R. Smith; invoice price, $10,500.
c. Sold merchandise to K. Miller; invoice price, $31,000.
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, $27,000.
f. R. Smith paid his account in full within the discount period.
g. Collected $97,000 cash from customer sales on credit in prior year, all within the discount periods.
h. K. Miller paid the invoice in (c) within the discount period.
1. Sold merchandise to R. Roy; invoice price, $27,500.
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 $4,000 cash on an account receivable on sales in a prior year.
1. Wrote off a prior year account of $4,000 after deciding that the amount would never be collected.
m. The estimated bad debt rate used by the company was 1.0 percent of credit sales net of returns.
P6-1 Part 2
2. Show how the accounts related to the preceding sale and collection activities should be reported on the current year income
statement.
Note: Round your answers to the nearest whole dollar amount.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education