Homework Answers
Answer:
12. Calculation of figures to be reported in the company's year Two financial statements in connection with these credit sales:
Sales amount to be reported in the income statement = $800000
Bad debts to be reported ($800000*5%) = $40000
Provision for doubtful debts balance as on year two = $18000
($40000-$31000)*2
Accounts receivable closing balance = $678000
($800000-$430000-$31000)*2
Note : It is assumed that amount is still due from the side of accounts receivable.
13. Calculation of figures to be reported in the company's year Two financial statements in connection with these credit sales:
Sales amount to be reported in the income statement = $1200000
Bad debts to be reported = $30000
Provision for doubtful debts balance as on year two = $38500
($770000*5%)
Accounts receivable closing balance = $770000
Note : It is assumed that amount is still due from the side of accounts receivable.
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