The following data were selected from the records of Tunga Company for the year ended December 31, current year:Balances at January 1, current yearAccounts receivable (various customers)Allowance for doubtful accountsThe company sells merchandise for cash and on open account with credit terms 2/10, n/30, without a right of return.The following transactions occurred during the current year:a. Sold merchandise for cash, $234,000.b. Collected $98,000 cash from customers for credit sales made during the prior year, all within the discount periods.c. Sold merchandise to R. Agostino on open account for $11,500.d. old merchandise to K. Black on open account for $25,000.e. R. Agostino paid his account in full within the discount period.f. Sold merchandise to B. Assaf on open account for $26,000.g. K. Black paid the invoice in (c) within the discount period.h. Sold merchandise to R. Fong on open account for $17,500.i. Collected $6,000 cash on an accounts receivable for sales made in November of the prior year. The amount was received after thediscount period.j. Wrote off an old account of $3,000 after deciding that the amount would never be collected.k. The company estimates that 4 percent of the balance of accounts receivable at December 31 of the current year will beuncollectible in the future.$107,0004,000The company records sales revenue net of the sales discount. If a customer pays after the discount period, the sales discount that isforfeited is recorded in a separate account (sales discounts forfeited) and closed to sales revenue at the end of the accounting period.Required:Determine the balances of the accounts: sales revenue, accounts receivable, and allowance for doubtful accounts that will be reportedin the financial statements for the current year. Assume that the amounts due from both B. Assaf and R. Fong have been outstandingfor more than 10 days. (Hint: Use T-accounts to keep track of the effect of the above transactions on the three accounts.)Sales revenueAccounts receivableAllowance for doubtful accounts$ 313,27043,500$9,740 X

Introduction:The allowance for uncollectible accounts is a contra-asset account that represents the…

The following data were selected from the records of Tunga Company for the year ended December 31, current year: Balances at January 1, current year Accounts receivable (various customers) Allowance for doubtful accounts $107,000 4,000 The company sells merchandise for cash and on open account with credit terms 2/10, n/30, without a right of return. The following transactions occurred during the current year: a. Sold merchandise for cash, $234,000. b. Collected $98,000 cash from customers for credit sales made during the prior year, all within the discount periods. c. Sold merchandise to R. Agostino on open account for $11,500. d. Sold merchandise to K. Black on open account for $25,000. e. R. Agostino paid his account in full within the discount period. f. Sold merchandise to B. Assaf on open account for $26,000. g. K. Black paid the invoice in (c) within the discount period. h. Sold merchandise to R. Fong on open account for $17,500. i. Collected $6,000 cash on an accounts receivable for sales made in November of the prior year. The amount was received after the discount period.

The following data were selected from the records of Tunga Company for the year ended December 31, current year: Balances at January 1, current year Accounts receivable (various customers) Allowance for doubtful accounts $107,000 4,000 The company sells merchandise for cash and on open account with credit terms 2/10, n/30, without a right of return. The following transactions occurred during the current year: a. Sold merchandise for cash, $234,000. b. Collected $98,000 cash from customers for credit sales made during the prior year, all within the discount periods. c. Sold merchandise to R. Agostino on open account for $11,500. d. Sold merchandise to K. Black on open account for $25,000. e. R. Agostino paid his account in full within the discount period. f. Sold merchandise to B. Assaf on open account for $26,000. g. K. Black paid the invoice in (c) within the discount period. h. Sold merchandise to R. Fong on open account for $17,500. i. Collected $6,000 cash on an accounts receivable for sales made in November of the prior year. The amount was received after the discount period.

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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