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Question: Peoples Company uses the percentage of Sales method to determine bad debt expense; based on...
Question: Peoples Company uses the percentage of Sales method to determine bad debt expense; based on company's history, 3% of the Sales balance will be uncollectible. Year Sales Write-offs Accounts Receivable 20x5 $5,000,000 $1,000,000 20x6 $7,000,000 $120,000 $1,200,000 20x7 $9,000,000 $190,000 $1,400.000 20x8 $10,000,000 $200,000 $1,600,000 Based on the information above, determine, the following: A. Bad Debt Expense B.Allowance for Uncollectible Accounts: view the Written Example to see how to calculate, there is a spreadsheet attached. C. Net Realizable Value Please show all steps thanks.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
Sheridan Company uses the percentage of sales method to record bad debt expense. It estimates that...
Sheridan Company uses the percentage of sales method to record
bad debt expense. It estimates that 2% of net credit sales (all
made on account) will become uncollectible. Sheridan Company
reported the following information in its general ledger for the
year ended September 30, 2021:
Sales
Debit
Credit
954,000
Accounts Receivable
Debit
Credit
257,000
Allowance for Doubtful Accounts
Debit
Credit
2,000
1) Prepare the adjusting entry to record bad debt expense at
year end.
2) Calculate the carrying amount of...
Mel's Hardware uses the allowance method to determine their bad debt expense. The allowance for bad...
Mel's Hardware uses the allowance method to determine their bad
debt expense. The allowance for bad debts is based on the balance
in the accounts receivable account. Mel's hardware uses the rate of
0.75% of accounts receivable to determine the appropriate balance
in the allowance for doubtful accounts. The data collected from
Mel's Hardware is as follows.
A/R: $49,477.00
Allowance for doubtful accounts: debit $350.00
Credit sales: $144,554.00
Bad Debt Expense: -0-
Ervin Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is...
Ervin Company uses the allowance method to account for uncollectible accounts receivable. Bad debt expense is established as a percentage of credit sales. For 2021, net credit sales totaled $5,400,000, and the estimated bad debt percentage is 1.50%. No previously written-off accounts receivable were reinstated during 2021. The allowance for uncollectible accounts had a credit balance of $51,000 at the beginning of 2021 and $44,500, after adjusting entries, at the end of 2021. Required: 1. What is bad debt expense for 2021...
A taxpayer uses an allowance method (i.e., aging method) of calculating bad debt expense for purposes...
A taxpayer uses an allowance method (i.e., aging method) of
calculating bad debt expense for purposes of the business'
financial statements. For income tax purposes, she will also use
the allowance method to calculate the bad debt deduction.
True
False
Beth and Bob are married entrepreneurs. Beth has a start −up
sole proprietorship in which she works long hours. This year the
business generated $500,000 of revenues and $800,000 of
deductible business expenses. Bob is a partner in a new...
Using the percentage-of-receivables method for recording bad debt expense, estimated uncollectible accounts are $55,000. If the...
Using the percentage-of-receivables method for recording bad
debt expense, estimated uncollectible accounts are $55,000. If the
balance of Allowance for Doubtful Accounts is $11,000 debit before
adjustment, what is the balance after adjustment?
A) $55,000
B) $11,000
C) $66,000
D) $44,000
Short answer The Company uses the balance sheet approach to estimate bad debt expense. Credit sales...
Short answer
The Company uses the balance sheet approach to estimate bad
debt expense. Credit sales for the period were $10 million. The
beginning balance in the allowance for doubtful accounts was a
credit balance of $44,300. During the year, $41,000 of receivables
were written off. The aging schedule suggests that the ending
balance in the allowance for doubtful accounts is $51,500. What was
bad debt expense for the period? Credit sales were $950,000. Cash
flow from operating activities was...
Jake Company records bad debt expense using the net credit sales method and has estimated that...
Jake Company records bad debt expense using the net credit sales method and has
estimated that 5.5% of its credit sales will prove to be uncollectible. During
2019, Jake Company reported net credit sales of $120,000 and collected $150,000
cash from its credit customers. The $150,000 includes a $6,000 recovery of an
account receivable written off in the previous year. During 2019, Jake Company
wrote-off as uncollectible accounts receivable of $4,000. Jake Company reported
accounts receivable at January 1, 2019...
Jake Company records bad debt expense using the net credit sales method and has estimated that...
Jake Company records bad debt expense using the net credit sales
method and has estimated that 5.5% of its credit sales will prove
to be uncollectible. During 2019, Jake Company reported net credit
sales of $120,000 and collected $150,000 cash from its credit
customers. The $150,000 includes a $6,000 recovery of an account
receivable written off in the previous year. During 2019, Jake
Company wrote-off as uncollectible accounts receivable of $4,000.
Jake Company reported accounts receivable at January 1, 2019...
Jake Company records bad debt expense using the net credit sales method and has estimated that...
Jake Company records bad debt expense using the net credit sales method and has
estimated that 5.5% of its credit sales will prove to be uncollectible. During
2019, Jake Company reported net credit sales of $120,000 and collected $150,000
cash from its credit customers. The $150,000 includes a $6,000 recovery of an
account receivable written off in the previous year. During 2019, Jake Company
wrote-off as uncollectible accounts receivable of $4,000. Jake Company reported
accounts receivable at January 1, 2019...
Crane Company uses the percentage-of-receivables basis to record bad debt expense. Accounts receivable (ending balance) $550,000...
Crane Company uses the percentage-of-receivables basis to record
bad debt expense.
Accounts receivable (ending
balance)
$550,000
(debit)
Allowance for doubtful
accounts (unadjusted)
5,300
(debit)
The company estimates that 2% of accounts receivable will become
uncollectible.
(a)
Prepare the adjusting journal entry to record bad debt expense for
the year. (Credit account titles are automatically
indented when amount is entered. Do not indent
manually.)
Account Titles and Explanation
Debit
Credit
(b)
What is the ending (adjusted) balance in Allowance for Doubtful...
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