Question

 

The following information relates to Kate Company

Beginning inventory    150 units at $2 each

Purchases                 450 units at $5 each

At the end of the period , Kate had 190 units left in inventory. Kate sold the remaining units for $24 each.

How many units did Kate have available for sale? 150+450-190 IS WRONG

 

On December 31, 2017, Extreme Fitness has adjusted balances of $80,580 in Accounts Receivable and $2,564 in Allowance for Doubtful Accounts. Assume that on February 2, 2018, Extreme Fitness received a payment of $975 from one of the customers whose balance had been written off.

What amount would the company report as its accounts receivable balance on February 2, 2018? 80580-2564-975 IS WRONG

 

Young and Restless Corporation (YRC) uses two aging categories to estimate uncollectible accounts. Accounts less than 60 days are considered current and have a 3% uncollectible rate. Accounts more than 60 days are considered delinquent and have a 20% uncollectible rate.. YRC’s Allowance for Doubtful Accounts currently has an unadjusted debit balance of $576

If YRC has $59,620 of current accounts and $7,200 of delinquent accounts, how much should be reported as Bad Debt expense? 59620*.03 + 7200*.20 + 576 IS WRONG

 

Potato Company began the period with an accounts receivable balance of $2,693 and a balance in the allowance for doubtful accounts of $494

The following transactions occurred in Potato Company

a. During the period, customer balances are written off in the amount of $668

b. At the end of the period, bad debt expense is estimated to be $749.

What is the Net Accounts receivable after these transactions? 2693-668-749 IS WRONG

 

Answer 1

1)Units available for sale -Beginning inventory + Purchase

              = 150 + 450

             = 600 units

2)

The entry to record collection of receivable written off :

Account title	Debit	credit
Accounts receivable	975
Allowance for doubful account		975
[Being accounts reinstated]
cash	975
Accounts receivable		975

Presentation of accounts receivable :

Accounts receivable

80580

3)

Category	Amount	%	Uncollectible account
less than 60 days	59620	3%	1788.6
More than 60 days	7200	20%	1440
Estimated uncollectible account at year end			3228.6
less:Unadjusted balance in allowance account			-(-576)
Bad debt expense			3804.6

4)

Balance in accounts receivable = 2693-668 written off = 2025

Allowance account at end = Unadjusted balance +bad debt expense-written off

             = 494 +749-668

           = 575

Net accounts receivable = 2025 -575 = 1450