Swathmore Clothing Corporation grants its customers 30 days’
credit. The company uses the allowance method for its uncollectible
accounts receivable. During the year, a monthly bad debt accrual is
made by multiplying 2% times the amount of credit sales for the
month. At the fiscal year-end of December 31, an aging of accounts
receivable schedule is prepared and the allowance for uncollectible
accounts is adjusted accordingly.
At the end of 2020, accounts receivable were $610,000 and the
allowance account had a credit balance of $74,000. Accounts
receivable activity for 2021 was as follows:
| Beginning balance | $ | 610,000 | ||
| Credit sales | 2,800,000 | |||
| Collections | (2,663,000 | ) | ||
| Write-offs | (57,000 | ) | ||
| Ending balance | $ | 690,000 | ||
The company’s controller prepared the following aging summary of
year-end accounts receivable:
| Summary | ||||
| Age Group | Amount | Percent Uncollectible | ||
| 0−60 days | $ | 460,000 | 4 | % |
| 61−90 days | 78,000 | 15 | ||
| 91−120 days | 67,000 | 26 | ||
| Over 120 days | 85,000 | 41 | ||
| Total | $ | 690,000 | ||
Required:
1. Prepare a summary journal entry to record the
monthly bad debt accrual and the write-offs during the year.
2. Prepare the necessary year-end adjusting entry
for bad debt expense.
3-a. What is total bad debt expense for
2021?
3-b. How would accounts receivable appear in the
2021 balance sheet?
repare a summary journal entry to record the monthly bad debt accrual and the write-offs during the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Event | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 1 | Bad debt expense | ||
| Allowance for uncollectible accounts | ||||
| 2 | 2 | Allowance for uncollectible accounts | ||
| Accounts receivable |
Prepare the necessary year-end adjusting entry for bad debt expense. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
| No | Event | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 1 | Bad debt expense | ||
| Allowance for uncollectible accounts |
What is total bad debt expense for 2021?
|
How would accounts receivable appear in the 2021 balance sheet?
|
||||||
In: Accounting
Spreadsheets Made Easy (SME) is a company that designs and sells spreadsheet software. Corporate customers purchase licences for the number of users in their company who can access the software from their network at any time. The perpetual licences do not expire and can be easily reproduced by SME. SME has no additional obligations to fulfill with respect to this software. On 16 November 20X1, SME sold 50 licences to a customer for a total consideration of $50,000.
Required:
Prepare the journal entry that would be recorded by SME relating to this transaction.
In: Accounting
Slide 22-12
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:
|
Age Group |
Percentage of Year-End Receivables in Group |
Percent Uncollectible |
|
0-60 days |
70% |
5% |
|
61-90 days |
20 |
15 |
|
91-120 |
5 |
20 |
|
Over 120 days |
5 |
40 |
Required:
Complete the following questions by entering your answers below.
Note: Enter debits before credits.
|
Event |
General Journal |
Debit |
Credit |
Net account receivable reported
a.______________________
b.______________________
c.______________________
In: Accounting
Swathmore Clothing Corporation grants its customers 30 days’
credit. The company uses the allowance method for its uncollectible
accounts receivable. During the year, a monthly bad debt accrual is
made by multiplying 2% times the amount of credit sales for the
month. At the fiscal year-end of December 31, an aging of accounts
receivable schedule is prepared and the allowance for uncollectible
accounts is adjusted accordingly.
At the end of 2020, accounts receivable were $592,000 and the
allowance account had a credit balance of $56,000. Accounts
receivable activity for 2021 was as follows:
| Beginning balance | $ | 592,000 | ||
| Credit sales | 2,710,000 | |||
| Collections | (2,573,000 | ) | ||
| Write-offs | (48,000 | ) | ||
| Ending balance | $ | 681,000 | ||
The company’s controller prepared the following aging summary of year-end accounts receivable:
req1-
1. Record a summary entry to record the monthly bad debt accrual.
2. Record a summary entry to record the 2021 write-offs.
req 2-
1. Record the year-end adjusting entry for bad debt expense.
req 3a-
What is total bad debt expense for 2021?
req 3b-
How would accounts receivable appear in the 2021 balance sheet?
| Summary | ||||
| Age Group | Amount | Percent Uncollectible | ||
| 0−60 days | $ | 415,000 | 4 | % |
| 61−90 days | 98,000 | 12 | ||
| 91−120 days | 58,000 | 28 | ||
| Over 120 days | 110,000 | 39 | ||
| Total | $ | 681,000 | ||
Required:
1. Prepare a summary journal entry to record the
monthly bad debt accrual and the write-offs during the year.
2. Prepare the necessary year-end adjusting entry
for bad debt expense.
3-a. What is total bad debt expense for
2021?
3-b. How would accounts receivable appear in the
2021 balance sheet?
In: Accounting
Swathmore Clothing Corporation grants its customers 30 days’
credit. The company uses the allowance method for its uncollectible
accounts receivable. During the year, a monthly bad debt accrual is
made by multiplying 2% times the amount of credit sales for the
month. At the fiscal year-end of December 31, an aging of accounts
receivable schedule is prepared and the allowance for uncollectible
accounts is adjusted accordingly.
At the end of 2020, accounts receivable were $598,000 and the
allowance account had a credit balance of $62,000. Accounts
receivable activity for 2021 was as follows:
| Beginning balance | $ | 598,000 | ||
| Credit sales | 2,740,000 | |||
| Collections | (2,603,000 | ) | ||
| Write-offs | (51,000 | ) | ||
| Ending balance | $ | 684,000 | ||
The company’s controller prepared the following aging summary of
year-end accounts receivable:
| Summary | ||||
| Age Group | Amount | Percent Uncollectible | ||
| 0−60 days | $ | 430,000 | 4 | % |
| 61−90 days | 92,000 | 15 | ||
| 91−120 days | 61,000 | 20 | ||
| Over 120 days | 101,000 | 35 | ||
| Total | $ | 684,000 | ||
Required:
1. Prepare a summary journal entry to record the
monthly bad debt accrual and the write-offs during the year.
2. Prepare the necessary year-end adjusting entry
for bad debt expense.
3-a. What is total bad debt expense for
2021?
3-b. How would accounts receivable appear in the
2021 balance sheet?
In: Accounting
What assumptions about J.C.Penny’s 5C’s (Customers, Competitors, Collaborators, Context, and Company) must hold true for the repositioning to be effective? What does Johnson perceive in these factors that lead him to believe that “Fair and Square” pricing can be a successful approach for J.C. Penney?
read the case J.C. Penney's 'Fair and Square' Pricing Strategy. Harvard Business School Case.
In: Operations Management
Sara’s Salsa Company produces its condiments in two types: Extra Fine for restaurant customers and Family Style for home use. Salsa is prepared in department 1 and packaged in department 2. The activities, overhead costs, and drivers associated with these two manufacturing processes and the company’s production support activities follow.
| Process | Activity | Overhead cost | Driver | Quantity | ||
| Department 1 | Mixing | $ | 4,800 | Machine hours | 1,200 | |
| Cooking | 11,100 | Machine hours | 1,200 | |||
| Product testing | 112,800 | Batches | 750 | |||
| $ | 128,700 | |||||
| Department 2 | Machine calibration | $ | 265,000 | Production runs | 400 | |
| Labeling | 10,000 | Cases of output | 165,000 | |||
| Defects | 6,500 | Cases of output | 165,000 | |||
| $ | 281,500 | |||||
| Support | Recipe formulation | $ | 93,000 | Focus groups | 60 | |
| Heat, lights, and water | 30,000 | Machine hours | 1,200 | |||
| Materials handling | 68,000 | Container types | 10 | |||
| $ | 191,000 | |||||
Additional production information about its two product lines follows.
| Extra Fine | Family Style | |||
| Units produced | 23,000 | cases | 142,000 | cases |
| Batches | 230 | batches | 520 | batches |
| Machine hours | 400 | MH | 800 | MH |
| Focus groups | 30 | groups | 30 | groups |
| Container types | 7 | containers | 3 | containers |
| Production runs | 230 | runs | 170 | runs |
Required:
1. Using a plantwide overhead rate based on cases,
compute the overhead cost that is assigned to each case of Extra
Fine Salsa and each case of Family Style Salsa. PLANT OVERHEAD RATE
? $___ PER CASE
2. Using the plantwide overhead rate, determine
the total cost per case for the two products if the direct
materials and direct labor cost is $6 per case of Extra Fine and $5
per case of Family Style. EXTRA FINE ___ PER UNIT.. FAMILY STYLE
___PER UNIT
3.a. If the market price of Extra Fine Salsa is
$17 per case and the market price of Family Style Salsa is $8 per
case, determine the gross profit per case for each product. EXTRA
FINE ____ FAMILY STYLE ____
3.b. What might management conclude about the
Family Style Salsa product line?
5. If the market price is $17 per case of Extra Fine and $8 per case of Family Style, determine the gross profit per case for each product. (Round your intermediate calculations and final answers to 2 decimal places.
|
In: Accounting
2. To raise awareness of its capabilities, FedEx developed a sales promotion that was sent to selected offices. To assess the possible benefit of the promotion, FedEx pulled the shipping records for a random sample of 50 offices that received the promotion and another random sample of 75 that did not and collected data on the number of mailings. They want to see if those who received the sales promotions shipped more mailings. The complete set of results is provided below (promotions columns). a. State the null and alternate hypotheses. b. Run the test. Paste the test output and state your decision (minitab - Stat-paired T-Test and CI). c. What is the best estimate for the population difference in means for the number of mailings between offices with the promotion and offices without the promotion? (Be 90% confident in your estimate for the confidence interval). d. Interpret the confidence interval in part c. e. What is the margin of error associated with 90% confidence interval?
Promotion Mailings
Promotions_NO 15
Promotions_NO 49
Promotions_NO 42
Promotions_NO 22
Promotions_NO 26
Promotions_NO 35
Promotions_NO 38
Promotions_NO 13
Promotions_NO 35
Promotions_NO 14
Promotions_NO 5
Promotions_NO 64
Promotions_NO 27
Promotions_NO 57
Promotions_NO 50
Promotions_NO 43
Promotions_NO 32
Promotions_NO 39
Promotions_NO 13
Promotions_NO 19
Promotions_NO 47
Promotions_NO 45
Promotions_NO 38
Promotions_NO 59
Promotions_NO 35
Promotions_NO 8
Promotions_NO 10
Promotions_NO 58
Promotions_NO 44
Promotions_NO 9
Promotions_NO 10
Promotions_NO 0
Promotions_NO 42
Promotions_NO 37
Promotions_NO 23
Promotions_NO 12
Promotions_NO 54
Promotions_NO 41
Promotions_NO 36
Promotions_NO 43
Promotions_NO 45
Promotions_NO 18
Promotions_NO 65
Promotions_NO 10
Promotions_NO 17
Promotions_NO 59
Promotions_NO 26
Promotions_NO 18
Promotions_NO 8
Promotions_NO 14
Promotions_NO 74
Promotions_NO 29
Promotions_NO 60
Promotions_NO 19
Promotions_NO 30
Promotions_NO 29
Promotions_NO 12
Promotions_NO 0
Promotions_NO 20
Promotions_NO 31
Promotions_NO 13
Promotions_NO 5
Promotions_NO 7
Promotions_NO 42
Promotions_NO 36
Promotions_NO 9
Promotions_NO 23
Promotions_NO 70
Promotions_NO 28
Promotions_NO 25
Promotions_NO 26
Promotions_NO 24
Promotions_NO 50
Promotions_NO 7
Promotions_NO 0
Promotions_YES 38
Promotions_YES 74
Promotions_YES 18
Promotions_YES 65
Promotions_YES 60
Promotions_YES 51
Promotions_YES 71
Promotions_YES 47
Promotions_YES 29
Promotions_YES 39
Promotions_YES 45
Promotions_YES 36
Promotions_YES 57
Promotions_YES 36
Promotions_YES 12
Promotions_YES 20
Promotions_YES 23
Promotions_YES 79
Promotions_YES 16
Promotions_YES 4
Promotions_YES 62
Promotions_YES 37
Promotions_YES 2
Promotions_YES 23
Promotions_YES 6
Promotions_YES 10
Promotions_YES 28
Promotions_YES 65
Promotions_YES 25
Promotions_YES 86
Promotions_YES 27
Promotions_YES 58
Promotions_YES 33
Promotions_YES 54
Promotions_YES 40
Promotions_YES 92
Promotions_YES 71
Promotions_YES 0
Promotions_YES 77
Promotions_YES 60
Promotions_YES 56
Promotions_YES 38
Promotions_YES 16
Promotions_YES 89
Promotions_YES 62
Promotions_YES 9
Promotions_YES 42
Promotions_YES 73
Promotions_YES 49
Promotions_YES 14
In: Statistics and Probability
A global manufacturing company has hired a supply chain management consulting company to review its supply chain. The consulting company has recommened the manufacturer to conduct periodic review of its logistics network design and optimize its network of warehouses.
(i) Discuss why the manufacturer should periodically review its logistics network design.
(ii) Discuss the advantages of having a small number of centrally located warehouses and having a large number of warehouses closer to the customers.
In: Operations Management
2. List and explain the points of financial impact on a company if it raises the credit standards required of its customers who utilized trade credit offered by the
company.
In: Finance