FINANCIAL AND MANAGERIAL ACCOUNTING
9th Edition
ISBN: 2818440048890
Author: Wild
Publisher: MCG CUSTOM
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Chapter 7, Problem 9QS
To determine
Concept Introduction: The percent of sales method is based on the assumption that a percentage of a company’s credit sales is uncollectible. The company generally determines the percentage of uncollectible based on prior experience. The percent of sales method is also called as income statement method.
The
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Current Attempt in Progress
The ledger of Cullumber Company at the end of the current year shows Accounts Receivable $68,000, Credit Sales $810,000, and
Sales Returns and Allowances $38,000. Prepare journal entries for each separate scenario below.
If Cullumber Company uses the direct write-off method to account for uncollectible accounts, journalize the adjusting
entry at December 31, assuming Cullumber Company determines that Matisse's $500 balance is uncollectible.
(a)
If Allowance for Doubtful Accounts has a credit balance of $900 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 8% of accounts receivable.
(b)
If Allowance for Doubtful Accounts has a debit balance of $490 in the trial balance, journalize the adjusting entry at
December 31, assuming bad debts are expected to be 7% of accounts receivable.
(c)
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No. Account Titles…
Percent of Sales Method
At the end of the current year, Accounts Receivable has a balance of $875,000; Allowance for Doubtful Accounts has a debit balance of $8,000; and sales for the year total $3,940,000. Bad debt expense is estimated at 1.25% of sales.
a. Determine the amount of the adjusting entry for uncollectible accounts.$
b. Determine the adjusted balances of Accounts Receivable, Allowance for Doubtful Accounts, and Bad Debt Expense.
Adjusted BalanceDebit (Credit)
Accounts Receivable
$
Allowance for Doubtful Accounts
$
Bad Debt Expense
$
c. Determine the net realizable value of accounts receivable.$
MKE Goods’ year-end unadjusted trial balance shows accounts receivable of $198,000, allowance for doubtful accounts of $1,200 (credit), and sales of $560,000. Uncollectibles are estimated to be 1.5% of accounts receivable.
1. Prepare the December 31 year-end adjusting entry for uncollectibles.2. What amount would have been used in the year-end adjusting entry if the allowance account had a year-end unadjusted debit balance of $600?
Chapter 7 Solutions
FINANCIAL AND MANAGERIAL ACCOUNTING
Ch. 7 - Prob. 1QSCh. 7 - Prob. 2QSCh. 7 - Prob. 3QSCh. 7 - QS 7-4 Distinguishing between allowance method and...Ch. 7 - Prob. 5QSCh. 7 - Prob. 6QSCh. 7 - Prob. 7QSCh. 7 - Prob. 8QSCh. 7 - Prob. 9QSCh. 7 - Prob. 10QS
Ch. 7 - Prob. 11QSCh. 7 - Prob. 12QSCh. 7 - Prob. 13QSCh. 7 - Prob. 14QSCh. 7 - Prob. 15QSCh. 7 - Prob. 16QSCh. 7 - Prob. 17QSCh. 7 - Prob. 18QSCh. 7 - Prob. 19QSCh. 7 - Prob. 20QSCh. 7 - Prob. 21QSCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 1PSACh. 7 - Prob. 2PSACh. 7 - Prob. 3PSACh. 7 - Prob. 4PSACh. 7 - Prob. 5PSACh. 7 - Prob. 1PSBCh. 7 - Prob. 2PSBCh. 7 - Prob. 3PSBCh. 7 - Prob. 4PSBCh. 7 - Prob. 5PSBCh. 7 - Prob. 7SPCh. 7 - Prob. 1.1AACh. 7 - Prob. 1.2AACh. 7 - Prob. 1.3AACh. 7 - Prob. 1.4AACh. 7 - Prob. 2.1AACh. 7 - Prob. 2.2AACh. 7 - Prob. 3.1AACh. 7 - Prob. 3.2AACh. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQCh. 7 - Prob. 4DQCh. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Anton Blair is the manager of a medium-size...Ch. 7 - Prob. 2BTNCh. 7 - Prob. 3BTNCh. 7 - Prob. 4BTNCh. 7 - Prob. 5BTN
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