Answer all, show work：
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 $49,000 | $ | 527,000 |
During 2021, credit sales were $1,845,000, cash collections from customers $1,925,000, and $58,000 in accounts receivable were written off. In addition, $4,900 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
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 2017, accounts receivable were $610,000 and the
allowance account had a credit balance of $74,000. Accounts
receivable activity for 2018 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
2018?
3-b. How would accounts receivable appear in the
2018 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 $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:
| 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 $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