Question

Short answer

1. 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 $650,000. Cash sales were $350,000. Accrual expenses were $925,000. Cash flow from financing activities was $400,000. What was net income? What does the current portion of long term debt represent? In periods of rising prices, which inventory method (LIFO or FIFO) will provide you with a higher net income? Record the journal entry to write off $4,000 of receivables that were deemed uncollectible.Assume that $500 of the receivables written off in (8) were subsequently collected. Record the journal entry to record the collection of the $500. What does a deferred tax liability represent?What does a deferred tax asset represent?What was the gain on the disposal of a piece of equipment if the equipment had a historical cost of $25,000, related accumulated depreciation of $13,500, and was sold for $15,500. In addition, in its last year, the equipment had produced 4,000 units of inventory that had been sold for $3.50 a piece. Each piece had an inventory cost of $1.75 a piece. What is goodwill on the balance sheet? What does a gain on the disposal of an asset represent? Why is the loss on the disposal of an asset considered a non-cash item? Current assets are $45,000. Current liabilities are $35,000. Long term assets are $60,000. Long term liabilities are $10,000. What is the current ratio?

Answer 1

Problem 1 –

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?

Solution:

Balance Sheet Approach or Accounts Receivable Aging Method -- Under this, on the basis of prior years’ experience company estimate a percentage of accounts receivable that will not be collected.

In the question, beginning balance in the allowance for doubtful accounts is given = $44,300 Credit

We need to prepare T-Account for Allowance for Doubtful Account to find out the bad debt expense for the period.

Allowance for Doubtful Account
	Debit	Credit
To Accounts Receivable (written off during the period)	41,000	44,300	Beginning balance
		48,200	Bad Debt Expense for the period (Balancing figure)
Ending Balance (given)	51,500
	92,500	92,500

The bad debt expense for the period = $48,200

Hope the above calculations, working and explanations are clear to you and help you to understand the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you

Pls ask separate question for other parts problems