Question

In: Accounting

At December 31, Folgeys Coffee Company reports the following results for its calendar year. Cash sales...


At December 31, Folgeys Coffee Company reports the following results for its calendar year.

Cash sales $ 919,000
Credit sales 319,000


Its year-end unadjusted trial balance includes the following items.

Accounts receivable $ 144,000 debit
Allowance for doubtful accounts 6,900 debit


Prepare the adjusting entry to record bad debts expense assuming uncollectibles are estimated to be (a) 6% of credit sales, (b) 4% of total sales and (c) 9% of year-end accounts receivable.

Record Bad Debts Expense assuming uncollectibles are estimated to be 6% of credit sales.

Record Bad Debts Expense assuming uncollectibles are estimated to be 4% of total sales.

Record Bad Debts Expense assuming uncollectibles are estimated to be 9% of year-end accounts receivable.

Solutions

Expert Solution

  • All working forms part of the answer
  • Requirment ‘a’

A

Total Credit Sale

$        319,000.00

B = A x 6%

Bad Debt Expense

$          19,140.00

Accounts title

Debit

Credit

Bad Debt Expense

$           19,140.00

    Allowance for Doubtful Accounts

$          19,140.00

  • Requirement ‘b’

A = 919000 + 319000

Total Sales

$ 1,238,000.00

B = A x 4%

Bad Debt Expense

$        49,520.00

Accounts title

Debit

Credit

Bad Debt Expense

$         49,520.00

    Allowance for Doubtful Accounts

$        49,520.00

  • Requirement ‘c’

A

Accounts receivables balance

$          144,000.00

Debit

B = A x 9%

Adjusted Balance in Allowance account required

$            12,960.00

Credit

C

Unadjusted balance in Allowance Account

$               6,900.00

Debit

D = B+C

Bad Debt Expense

$            19,860.00

Accounts title

Debit

Credit

Bad Debt Expense

$               19,860.00

    Allowance for Doubtful Accounts

$            19,860.00


Related Solutions

At December 31, Hawke Company reports the following results for its calendar year. Cash sales $...
At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,207,450 Credit sales $ 2,804,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 849,612 debit Allowance for doubtful accounts $ 15,110 debit 1. Prepare the adjusting entry to record bad debts under each separate assumption. Bad debts are estimated to be 2% of credit sales. Bad debts are estimated to be 1% of total sales. An aging analysis estimates...
At December 31, Hawke Company reports the following results for its calendar year. Cash sales $...
At December 31, Hawke Company reports the following results for its calendar year. Cash sales $ 1,987,830 Credit sales $ 3,847,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,165,641 debit Allowance for doubtful accounts $ 24,060 debit Required: 1. Prepare the adjusting entry to record bad debts under each separate assumption. Bad debts are estimated to be 3% of credit sales. Bad debts are estimated to be 2% of total sales. An aging analysis...
At December 31, 2018, Hawke Company reports the following results for its calendar year. Cash sales...
At December 31, 2018, Hawke Company reports the following results for its calendar year. Cash sales $ 1,905,000 Credit sales 5,682,000 In addition, its unadjusted trial balance includes the following items. Accounts receivable $ 1,270,100 debit Allowance for doubtful accounts 16,580 debit Problem 7-2A Part 2 2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2018, balance sheet assuming that bad debts are estimated to be 1.5% of credit sales.
At December 31, 2017, Hawke Company reports the following results for its calendar year.
At December 31, 2017, Hawke Company reports the following results for its calendar year.         Cash sales $ 1,558,750   Credit sales   2,963,000     In addition, its unadjusted trial balance includes the following items.         Accounts receivable $ 897,789 debit Allowance for doubtful accounts   29,350 debit   At December 31, 2017, Hawke Company reports the following results for its calendar year.         Cash sales $ 1,558,750   Credit...
At December 31, 2017, Hawke Company reports the followingresults for its calendar year.Cashsales...
At December 31, 2017, Hawke Company reports the following results for its calendar year.Cash sales$1,498,600Credit sales3,827,000In addition, its unadjusted trial balance includes the following items.Accounts receivable$1,159,581debitAllowance for doubtful accounts13,710debit2. Show how Accounts Receivable and the Allowance for Doubtful Accounts appear on its December 31, 2017, balance sheet given the facts in part 1a.
Hampton Company reports the following information for its recent calendar year.
Hampton Company reports the following information for its recent calendar year.  Income Statement Data   Selected Year-End Balance Sheet Data Sales $ 78,000   Accounts receivable increase $ 8,000   Expenses:       Inventory decrease   2,000   Cost of goods sold   38,000   Salaries payable increase   700   Salaries expense   14,000           Depreciation expense   8,000           Net income $ 18,000            Required:Prepare...
A company has the following results for the year ending December 31, 2020 Sales Revenue $4,995,000...
A company has the following results for the year ending December 31, 2020 Sales Revenue $4,995,000 Cost of Goods Sold $1,785,000 Salaries and Wages Expense $602,000 Sales Commissions $575,000 Sales Discounts $490,000 Other Administrative Expenses $307,000 Depreciation of Equipment $189,000 Rent Revenue $120,000 Advertising Expense $85,000 Interest Expense $55,000 Dividend Revenue $30,000 Loss of Sale of Investments $7,000 On September 1, 2020, the company decided to eliminate a division. During 2020, losses relating to the eliminated division total $253,000. The...
) York Company reported the following results for the year ended December 31, 2021, its first...
) York Company reported the following results for the year ended December 31, 2021, its first year of operations:                                                                             2021           Income (per books before income taxes) $ 1,800,000           Taxable income                                 3,400,000 The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2022. What should York record as a net deferred tax asset or liability for the year ended December 31, 2021, assuming that the enacted tax rates in effect...
A firm reports sales of €50,000,000 for the year ended December 31, 2018. Its accounts receivable...
A firm reports sales of €50,000,000 for the year ended December 31, 2018. Its accounts receivable balances were €6,000,000 at January 1, 2018 and €7,500,000 at December 31, 2018. The company’s cash collections from sales (€) for 2018 is closest to: a) 51,500,000 b)42,500,000 c)48,500,000
Clouston Container Corporation reports the following data in its December 31, 2019 Financial Statements: Sales =...
Clouston Container Corporation reports the following data in its December 31, 2019 Financial Statements: Sales = $225,000 Current Assets = $50,000 Long-Term Assets = $130,000 Current Liabilities = $33,000 Long-Term Liabilities = $52,000 Net Income = $11,250 Compute Owner’s Equity_____________________________ Compute the Current Ratio___________________________ Complete Debt-to-Equity Ratio________________________ Complete Return on Sales____________________________ Complete Return on Owner’s Equity____________________ Pick two of these ratios and discuss how this company is doing relative to the ratio.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT