11th Edition

ISBN: 9780133856781

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

Concept explainers

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 t…

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 ari…

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Textbook Question

Chapter 9, Problem P9.27APGA

Accounting for uncollectible accounts using the allowance

(perccnt-of-sales) and direct write-off methods and reporting receivables on the balance sheet

On August 31,2016. Lily Floral Supply had a SI45.000 debit balance in Accounts Receivable and a $5,800 credit balance in Allowance for Bad Debts. During September, Lily made

Sales on account, $540,000. Ignore Cost of Goods Sold.
Collections on account, $581,000.
Write-offs of uncollectible receivables, $5,000.

Requirements

Journalize all September entries using the allowance method. Bad debts expense was estimated at 1% of credit sales. Show all September activity in Accounts Receivable. Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts).
Using the same facts, assume that Lily used the direct writc-olf method to account for uncollectible receivables. Journalize all September entries using the direct wwe-o^fmethod. Post to Accounts Receivable and Bad Debts Expense, and show their balances at September 30, 2016.
What amount of Bad Debts Expense would Lily report on its September income statement under each of the two methods? Which amount better matches e n ¦ with revenue? Give your reason.
What amount of net accounts receivable would Lily report on its Septeml '0, 3016, balance sheer under each of the two methods? Which amount is nunc realistic? Give your reason.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 9, Problem E9.26E

Chapter 9, Problem P9.28APGA

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Accounting for uncollectible accounts using the allowance (percent-of-sales) and direct write-off methods and reporting receivables on the balance sheet On August 31, 2018, Bouquet Floral Supply had a $140,000 debit balance in Accounts Receivable and a 55,600 credit balance in Allowance for Bad Debts. During September, Bouquet made: Sales on account, $550,000. Ignore Cost of Goods Sold. Collections on account, $584,000. Write-offs of uncollectible receivables, $4,000. Requirements Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Using the same facts, assume that Bouquet used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad Debts Expense, and show their balances on…

Accounting for uncollectible accounts using the allowance (percent of-sales) and direct write-off methods and reporting receivables on the balance sheet On August 31, 2018, Forget-Me-Not Floral Supply had a $140,000 debit balance in Accounts Receivable and a $5,600 credit balance in Allowance for Bad Debts. During September, Forget-Me-Not made the following transactions: Sales on account, $530,000. Ignore Cost of Goods Sold. Collections on account, $573,000. Write-offs of uncollectible receivables, 56,000. Requirements Journalize all September entries using the allowance method. Bad debts expense was estimated at 2% of credit sales. Show all September activity in Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense (post to these T-accounts). Using the same facts, assume that Forget-Me-Not used the direct write-off method to account for uncollectible receivables. Journalize all September entries using the direct write-off method. Post to Accounts Receivable and Bad…

The Accounts Receivable balance and Allowance for Bad Debts for Signature Lamp Company at December 31, 2017, was $10,800 and $2,000 (credit balance), respectively. During 2018, Signature Lamp Company completed the following transactions:a. Sales revenue on account, $273,400 (ignore Cost of Goods Sold).b. Collections on account, $223,000.c. Write-offs of uncollectibles, $5,900. Post the transactions to the Accounts Receivable, Allowance for Bad Debts, and Bad Debts Expense T-accounts, and determine the ending balance of each account. Journalize Signature Lamp’s adjustment to record bad debts expense assuming Hilltop estimates bad debts as 10% of accounts receivable. Post the adjustment to the appropriate T-accounts.

Chapter 9 Solutions

Horngren's Accounting (11th Edition)

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