Allowance method: Under allowance method, an allowance for bad debts is created with estimation before the bad debts actually become uncollectible. At the time of write-off of bad debts, the allowance for bad debt is debited and accounts receivable is credited. Allowance method aims at accounting for the bad debts during same period in which the sale occurred. To determine : 1. Journalize the January 31 entry to record and establish the allowance using the percent-of-sales method for January sales revenue. 2. Prepare journal entry to write-off the customer’s bad debt.

Question

According to P&G's 2020 financial statements and the accompanying notes. What balance sheet format did P&G adopt? Identify the various techniques of disclosure P&G might have used to disclose additional pertinent financial information. Which technique does it use in its financials? In what classifications are P&G's investments reported? What valuation basis does P&G use to report its investments? How much working capital did P&G have on June 30, 2020? On June 30, 2019? What were P&G's cash flows from its operating activities, investing, and financing activities for 2020? What were its trends in net cash provided by operating activities over the period 2018–2020? Explain why the change in accounts payable and in accrued and other liabilities is added to net income to arrive at net cash provided by operating activities. Compute P&G's (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow for 2017. What do these ratios indicate…

Answer 1

Question

Chapter 9, Problem P9.41CP

To determine

Allowance method:

Under allowance method, an allowance for bad debts is created with estimation before the bad debts actually become uncollectible. At the time of write-off of bad debts, the allowance for bad debt is debited and accounts receivable is credited. Allowance method aims at accounting for the bad debts during same period in which the sale occurred.

To determine:

1. Journalize the January 31 entry to record and establish the allowance using the percent-of-sales method for January sales revenue.

2. Prepare journal entry to write-off the customer’s bad debt.

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According to P&G's 2020 financial statements and the accompanying notes. What balance sheet format did P&G adopt? Identify the various techniques of disclosure P&G might have used to disclose additional pertinent financial information. Which technique does it use in its financials? In what classifications are P&G's investments reported? What valuation basis does P&G use to report its investments? How much working capital did P&G have on June 30, 2020? On June 30, 2019? What were P&G's cash flows from its operating activities, investing, and financing activities for 2020? What were its trends in net cash provided by operating activities over the period 2018–2020? Explain why the change in accounts payable and in accrued and other liabilities is added to net income to arrive at net cash provided by operating activities. Compute P&G's (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow for 2017. What do these ratios indicate…

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