Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020
balance sheet disclosed the following:
Current assets: Receivables, net of allowance for uncollectible accounts of $44,000 $502,000
During 2021, credit sales were $1,820,000, cash collections from customers $1,900,000, and $53,000 in accounts receivable were written off. In addition, $4,400 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| age group | Receivables in Group % | Percent Uncollectible |
| 0-60 | 65 | 4 |
| 61-90 | 15 | 10 |
| 91-120 | 15 | 30 |
| 120+ | 5 | 50 |
Required:
1. Prepare summary journal entries to account
for the 2021 write-offs and the collection of the receivable
previously written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)−(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company's fiscal year-end. The 2017 balance sheet disclosed the following:
Current assets:
Receivables, net of allowance for uncollectible accounts of $48,000 $ 522,000
During 2018, credit sales were $1,840,000, cash collections from customers $1,920,000, and $57,000 in accounts receivable were written off. In addition, $4,800 was collected from a customer whose account was written off in 2017. An aging of accounts receivable at December 31, 2018, reveals the following:
| Age Group | Percentage of Year-End Receivables in Group | Percent Uncollectible |
|---|---|---|
| 0-60 days | 70% | 5% |
| 61-90 days | 20 | 15 |
| 91-120 days | 5 | 20 |
| Over 120 days | 5 | 40 |
Required:
1. Prepare summary journal entries to account for the 2018 write-offs and the collection of the receivable previously written off.
2. Prepare the year-end adjusting entry for bad debts according to each of the following situations:
a. Bad debt expense is estimated to be 4% of credit sales for the year.
b. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable.
c. Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
3. For situations (a)-(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2018 balance sheet?
In: Accounting
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $47,000 | $ | 517,000 |
During 2021, credit sales were $1,835,000, cash collections from customers $1,915,000, and $56,000 in accounts receivable were written off. In addition, $4,700 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Percentage of Year-End | Percent | |||
| Age Group | Receivables in Group | Uncollectible | ||
| 0−60 days | 65 | % | 4 | % |
| 61−90 days | 15 | 10 | ||
| 91−120 days | 15 | 30 | ||
| Over 120 days | 5 | 50 | ||
Required:
1. Prepare summary journal entries to account for
the 2021 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
Bad debt expense is estimated to be 3% of credit sales for the year.
Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable.
Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
3. For situations (a)−(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting
Bueno is a company in Mexico that produces T-shirts for domestic and international customers. Bueno wants to use the well-known design of a popular Disney character, Mickey Mouse, on its products. What advice would you give Bueno?
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In: Finance
A company provides meal services to 5000 customers a month, at a cost $17.50 per meal. The company has a sale for a month reducing the cost per meal by 10% and receives an additional 1000 orders that month. What is the Elasticity Coefficient for the meal service?
Question 5 options:
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1.2 |
In: Economics
Raintree Cosmetic Company sells its products to customers on a
credit basis. An adjusting entry for bad debt expense is recorded
only at December 31, the company’s fiscal year-end. The 2020
balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $38,000 | $ | 472,000 |
During 2021, credit sales were $1,790,000, cash collections from customers $1,870,000, and $43,000 in accounts receivable were written off. In addition, $3,800 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Percentage of Year-End | Percent | |||
| Age Group | Receivables in Group | Uncollectible | ||
| 0−60 days | 65 | % | 4 | % |
| 61−90 days | 15 | 10 | ||
| 91−120 days | 15 | 30 | ||
| Over 120 days | 5 | 50 | ||
Required:
1. Prepare summary journal entries to account for
the 2021 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
3. For situations (a)−(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting
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Bird's Eye Treehouses, Inc., a Kentucky company, has determined that a majority of its customers are located in the Pennsylvania area. It therefore is considering using a lockbox system offered by a bank located in Pittsburgh. The bank has estimated that use of the system will reduce collection time by 2.5 days. Assume 365 days a year. |
| Average number of payments per day | 840 | ||
| Average value of payment | $ | 790 | |
| Variable lockbox fee (per transaction) | $ | 0.20 | |
| Annual interest rate on money market securities | 4.0 | % | |
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What is the NPV of the new lockbox system? |
| NPV | $ |
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Suppose in addition to the variable charge that there is an annual fixed charge of $4,000 to be paid at the end of each year. What is the NPV now? (Negative amount should be indicated by a minus sign. Round your answer to 2 decimal places. (e.g., 32.16)) |
| NPV | $ |
In: Finance
DF Limited is a manufacturing company that carries out jobs to customers requirements in three production departments. The following data is available for Jobs A, B and C.
A B C
Bought in components £248 £76 -
Direct material from stores £312 £32 £96
Direct labour hours:
Machining 12 18 15
Assembling 6 9 4
Finishing and Spraying 3 2 2
Hourly wage rates:
Machining £12.00
Assembling £8.00
Finishing and Spraying £6.00
Production overhead absorption rates per direct labour hour:
Machining £26.00
Assembling £21.00
Finishing and Spraying £25
Your cost estimates should include allowances for:
In: Accounting
Raintree Cosmetic
Company sells its products to customers on a credit basis. An
adjusting entry for bad debt expense is recorded only at December
31, the company’s fiscal year-end. The 2017 balance sheet disclosed
the following:
| Current assets: | ||||||
| Receivables, net of allowance for uncollectible accounts of $30,000 | $432,000 | |||||
During 2018, credit sales were $1,750,000, cash collections from
customers $1,830,000, and $35,000 in accounts receivable were
written off. In addition, $3,000 was collected from a customer
whose account was written off in 2017. An aging of accounts
receivable at December 31, 2018, reveals the following:
| Percentage of Year-End | Percent | ||||
| Age Group | Receivables in Group | Uncollectible | |||
| 0–60 days | 65 | % | 4 | % | |
| 61–90 days | 20 | 15 | |||
| 91–120 days | 10 | 25 | |||
| Over 120 days | 5 | 40 | |||
Required:
1. Prepare summary journal entries to account for
the 2018 write-offs and the collection of the receivable previously
written off.
2. Prepare the year-end adjusting entry for bad
debts according to each of the following situations:
Bad debt expense is estimated to be 3% of credit sales for the year.
Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable.
Bad debt expense is estimated by computing net realizable value of the receivables. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
3. For situations (a)–(c) in requirement 2 above,
what would be the net amount of accounts receivable reported in the
2018 balance sheet?
In: Accounting
Raintree Cosmetic Company sells its products to customers on a credit basis. An adjusting entry for bad debt expense is recorded only at December 31, the company’s fiscal year-end. The 2020 balance sheet disclosed the following:
| Current assets: | |
| Receivables, net of allowance for uncollectible accounts of $30,000 | $432,000 |
During 2021, credit sales were $1,750,000, cash collections from customers $1,830,000, and $35,000 in accounts receivable were written off. In addition, $3,000 was collected from a customer whose account was written off in 2020. An aging of accounts receivable at December 31, 2021, reveals the following:
| Age Group | Percentage of Year-End Receivables in Group |
Percent Uncollectible |
||
| 0–60 days | 65% | 4% | ||
| 61–90 days | 20 | 15 | ||
| 91–120 days | 10 | 25 | ||
| Over 120 days | 5 | 40 |
Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.
Prepare the year-end adjusting entry for bad debts according to each of the following situations:
Bad debt expense is estimated to be 3% of credit sales for the year.
Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable.
Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
For situations (a)–(c) in requirement 2 above, what would be the net amount of accounts receivable reported in the 2021 balance sheet?
In: Accounting