Question
In: Accounting
The following selected transactions were taken from the records of Shipway Company for the first year...
The following selected transactions were taken from the
records of Shipway Company for the first year of its operations
ending December 31:
Apr. 13. Wrote off account of Dean Sheppard, $8,450.
May 15. Received $500 as partial payment on the $7,100 account
of Dan Pyle. Wrote off the remaining balance as
uncollectible.
July 27. Received $8,450 from Dean Sheppard, whose account had
been written off on April 13. Reinstated the account and recorded
the cash receipt.
Dec. 31. Wrote off the following accounts as uncollectible
(record as one journal entry):
Paul Chapman $2,225
Duane DeRosa 3,550
Teresa Galloway 4,770
Ernie Klatt 1,275
Marty Richey 1,690
31. If necessary, record the year-end adjusting entry for
uncollectible accounts.
Required:
A. Journalize the transactions under the direct write-off
method. If no entry is required, simply skip to the next
transaction. Refer to the Chart of Accounts for exact wording of
account titles.
B. Journalize the transactions under the allowance method.
Shipway Company uses the percent of credit sales method of
estimating uncollectible accounts expense. Based on past history
and industry averages, ¾% of credit sales are expected to be
uncollectible. Shipway Company recorded $3,778,000 of credit sales
during the year. If no entry is required, simply skip to the next
transaction. Refer to the Chart of Accounts for exact wording of
account titles.
C. How much higher (lower) would Shipway Company’s net income
have been under the direct write-off method than under the
allowance method?
Solutions
ekkarill92 answered 1 year agoRelated Solutions
The following selected transactions were taken from the records of Shipway Company for the first year...
The following selected transactions were taken from the records
of Shipway Company for the first year of its operations ending
December 31:
Apr. 13.
Wrote off account of Dean Sheppard, $4,040.
May 15.
Received $2,020 as partial payment on the $5,370 account of Dan
Pyle. Wrote off the remaining balance as uncollectible.
July 27.
Received $4,040 from Dean Sheppard,
whose account had been written off on April 13. Reinstated the
account and recorded the cash receipt.
Dec. 31.
Wrote off...
The following selected transactions were taken from the records of Shipway Company for the first year...
The following selected transactions were taken from the records
of Shipway Company for the first year of its operations ending
December 31:
Apr.
13.
Wrote off account of Dean Sheppard, $8,030.
May
15.
Received $500 as partial payment on the $7,430 account of Dan
Pyle. Wrote off the remaining balance as uncollectible.
July
27.
Received $8,030 from Dean Sheppard, whose account had been
written off on April 13. Reinstated the account and recorded the
cash receipt.
Dec.
31.
Wrote off...
The following selected transactions were taken from the records of Shipway Company for the first year...
The following selected transactions were taken from the records
of Shipway Company for the first year of its operations ending
December 31:
Apr. 13
Wrote off account of Dean Sheppard, $5,190.
May 15
Received $2,600 as partial payment on the $6,900 account of Dan
Pyle. Wrote off the remaining balance as uncollectible.
July 27
Received $5,190 from Dean Sheppard, whose account had been
written off on April 13. Reinstated the account and recorded the
cash receipt.
Dec. 31
Wrote off...
The following selected transactions were taken from the books of Ripley Company for Year 1: On...
The following selected transactions were taken from the books of
Ripley Company for Year 1:
On February 1, Year 1, borrowed $45,000 cash from the local
bank. The note had a 7 percent interest rate and was due on June 1,
Year 1.
Cash sales for the year amounted to $235,000 plus sales tax at
the rate of 8 percent.
Ripley provides a 90-day warranty on the merchandise sold. The
warranty expense is estimated to be 4 percent of sales....
The following selected transactions were taken from the books of Ripley Company for Year 1: On...
The following selected transactions were taken from the books of
Ripley Company for Year 1:
On February 1, Year 1, borrowed $47,000 cash from the local bank.
The note had a 5 percent interest rate and was due on June 1, Year
1.
Cash sales for the year amounted to $245,000 plus sales tax at
the rate of 6 percent.
Ripley provides a 90-day warranty on the merchandise sold. The
warranty expense is estimated to be 4 percent of sales....
The following selected transactions were taken from the books of Ripley Company for Year 1: On...
The following selected transactions were taken from the books of
Ripley Company for Year 1:
On February 1, Year 1, borrowed $46,000 cash from the local
bank. The note had a 6 percent interest rate and was due on June 1,
Year 1.
Cash sales for the year amounted to $245,000 plus sales tax at
the rate of 7 percent.
Ripley provides a 90-day warranty on the merchandise sold. The
warranty expense is estimated to be 2 percent of sales....
The following selected transactions were taken from the books of Ripley Company for Year 1: On...
The following selected transactions were taken from the books of
Ripley Company for Year 1:
On February 1, Year 1, borrowed $50,000 cash from the local
bank. The note had a 8 percent interest rate and was due on June 1,
Year 1.
Cash sales for the year amounted to $235,000 plus sales tax at
the rate of 7 percent.
Ripley provides a 90-day warranty on the merchandise sold. The
warranty expense is estimated to be 3 percent of sales....
The following selected data were taken from the accounting records of Manitoba Manufacturing Company. The company...
The following selected data were taken from the accounting
records of Manitoba Manufacturing Company. The company uses
direct-labor hours as its cost driver for overhead costs.
Month Direct-Labor
Hours Manufacturing
Overhead
January 37,000 $
753,500
February 36,000
737,000
March 39,000
798,000
April 34,000
698,000
May 41,000 801,000
June 46,000 896,000
June’s costs consisted of machine supplies ($248,400),
depreciation ($31,000), and plant maintenance ($616,600). These
costs Exhibit the following respective behavior: variable, fixed,
and semivariable....
The following selected transactions were taken from the books of Ripley Company for 2016: 1....
The following selected
transactions were taken from the books of Ripley Company for
2016:
1.
On February 1, 2016, borrowed $58,000 cash from the local bank.
The note had a 5 percent interest rate and was due on June 1,
2016.
2.
Cash sales for the year amounted
to $225,000 plus sales tax at the rate of 6 percent.
3.
Ripley provides a 90-day warranty on the merchandise sold. The
warranty expense is estimated to be 2 percent of...
The following selected transactions were taken from the books of Ripley Company for 2018: 1. On...
The following selected transactions were taken from the books of
Ripley Company for 2018:
1. On February 1, 2018, borrowed $70,000 cash from the
local bank. The note had a 6 percent interest rate and was due on
June 1, 2018.
2. Cash sales for the year amounted to $240,000 plus
sales tax at the rate of 7 percent.
3. Ripley provides a 90-day warranty on the
merchandise sold. The warranty expense is estimated to be 1 percent
of sales....
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