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 $41,000 | $ | 487,000 |
During 2021, credit sales were $1,805,000, cash collections from customers $1,885,000, and $50,000 in accounts receivable were written off. In addition, $4,100 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
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 $43,000 | $ | 497,000 |
During 2021, credit sales were $1,815,000, cash collections from customers $1,895,000, and $52,000 in accounts receivable were written off. In addition, $4,300 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 | 60 | % | 3 | % |
| 61−90 days | 10 | 5 | ||
| 91−120 days | 20 | 25 | ||
| Over 120 days | 10 | 45 | ||
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 $37,000 $ 467,000 During 2018, credit sales were $1,785,000, cash collections from customers $1,865,000, and $42,000 in accounts receivable were written off. In addition, $3,700 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 60 % 3 % 61–90 days 10 5 91–120 days 20 25 Over 120 days 10 45
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 2% 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?
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 2017 balance sheet disclosed the following:
Current assets:
Receivables, net of allowance for uncollectible accounts of $33,000 $ 447,000
During 2018, credit sales were $1,765,000, cash collections from customers $1,845,000, and $38,000 in accounts receivable were written off. In addition, $3,300 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 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: Bad debt expense is estimated to be 4% 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
1. A national car rental company is interested in determining whether the mean days that customers rent cars is the same between three of its major cities. The following data reflect the number of days people rented a car for a sample of people in each of three cities.
Nizwa Sohar Muscat
5 7 7
3 7 5
7 11 8
1 5 11
2 7 15
9 3 17
a. Write down the null and alternative hypotheses to be tested.
b. Construct the ANOVA table
. c. Given the value of the tabulated F = 3.68 (α=.05), test the hypotheses you formulated in ‘a’ above.
d. Clearly state the test’s decision and conclusion. e. Perform pairwise comparisons and make conclusions (using t = 1.5).
In: Statistics and Probability
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 $35,000 | $ | 457,000 |
During 2021, credit sales were $1,775,000, cash collections from customers $1,855,000, and $40,000 in accounts receivable were written off. In addition, $3,500 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?
Prepare summary journal entries to account for the 2021 write-offs and the collection of the receivable previously written off.(If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1
Record accounts receivable written off during the year 2021.
2
Record entry to reinstate an account receivable previously written off.
3
Record collection of an account receivable previously written off.
Prepare the year-end adjusting entry for bad debts. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
1
Bad debt expense is estimated to be 3% of credit sales for the year.
2
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.
3
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.
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 $39,000 $ 477,000
During 2018, credit sales were $1,795,000, cash collections from customers $1,875,000, and $44,000 in accounts receivable were written off. In addition, $3,900 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 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: Bad debt expense is estimated to be 4% 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
|
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 days. |
| Average number of payments per day | 780 | ||
| Average value of payment | $ | 730 | |
| Variable lockbox fee (per transaction) | $ | .15 | |
| Annual interest rate on money market securities | 4.2 | % | |
|
What is the NPV of the new lockbox system? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| NPV | $ |
|
Suppose in addition to the variable charge that there is an annual fixed charge of $5,000 to be paid at the end of each year. What is the NPV now? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
| NPV | $ |
In: Finance
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 $46,000 | $ | 512,000 |
During 2018, credit sales were $1,830,000, cash collections from customers $1,910,000, and $55,000 in accounts receivable were written off. In addition, $4,600 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 | 60 | % | 3 | % |
| 61–90 days | 10 | 5 | ||
| 91–120 days | 20 | 25 | ||
| Over 120 days | 10 | 45 | ||
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 2% 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?
Journal Entry Worksheet
Requirement 1.
1.Record accounts receivable written off during the year 2018.
2.Record entry to reinstate an account receivable previously written off.
3.Record collection of an account receivable previously written off.
Requirement 2
1.Bad debt expense is estimated to be 2% of credit sales for the year.
2.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.
3.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.
Requirement 3
1.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 2017
balance sheet disclosed the following:
| Current assets: | ||
| Receivables, net of allowance for uncollectible accounts of $41,000 | $ | 487,000 |
During 2018, credit sales were $1,805,000, cash collections from customers $1,885,000, and $50,000 in accounts receivable were written off. In addition, $4,100 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 | 15 | 10 | ||
| 91–120 days | 15 | 30 | ||
| Over 120 days | 5 | 50 | ||
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