A | Debit | Credit | ||
1 | Cash | $ 6,00,000 | ||
Accounts Receivable | $ 28,00,000 | |||
To Service Revenue | $ 34,00,000 | |||
(Being Sale of services Accounted) | ||||
2 | Bad Debt Expense | $ 28,000 | ||
To Allowance for Doubtful Accounts | $ 28,000 | |||
(Being bad debt estimated at 1% of Credit Sales, ie. $2800000*1%) | ||||
3 | Allowance for Doubtful Accounts | $ 3,000 | ||
To Accounts Receivable | $ 3,000 | |||
(Being uncollectible debt of $3000 written off) | ||||
4 | Cash | $ 27,00,000 | ||
To Accounts Receivable | $ 27,00,000 | |||
(Being cash received from debtors) |
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B | Accounts Receivable | ||
Opening as on January 1,2019 | $ 3,00,000 | ||
Credit Sales during the year | $ 28,00,000 | ||
Less: Bad Debt written off | $ -3,000 | ||
Less: Cash Collected | $ -27,00,000 | ||
Less:Allowance for Doubtful Accounts | $ -33,000 | ||
Accounts Receivable (Net) | $ 3,64,000 | ||
Note: | |||
Allowance for Doubtful Accounts | |||
Opening | $ 8,000 | ||
Less: Bad Debt written off | $ -3,000 | ||
Add: Bad debt estimated during the year | $ 28,000 | ||
Closing | $ 33,000 |
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C.
Receivables turnover | |||
Credit Sales/ ((Beginning Accounts Receivable + Ending Accounts Receivable) / 2) | |||
2019 | 2018 | ||
Receivables turnover | 8.54 | 7.38 | |
2800000/((364000+292000)/2) | 2000000/((292000+250000)/2) | ||
2019 | 2018 | 2017 | |
Credit Sales | $ 28,00,000 | $ 20,00,000 | |
Accounts Receivable (net) | $ 3,64,000 | $ 2,92,000 | $ 2,50,000 |
Company's accounts receivable turned over 8.54 times during the year 2019 and 7.38 times during the year 2018 , which means that the average account receivable was collected in 42.8 days in 2019 and 49.5 days in 2018. Thus firm did better management in accounts receivable during the year 2019.
**
42.8 days = 365/8.54
49.5 days = 365/7.38
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Submit your answers to both parts of the assignment in a single Word document PART 1...
HOMEWORK #5 Due February 28, 5:00 pm 10 points Submit your answers to both parts of the assignment in a single Word document PART 1 The following information is available for a company as of January 1, 2019: Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable (net) $300,000 (8,000) 292,000 The following events took place during 2019: 1. During the year, the company sold services for $600,000 cash and $2,800,000 on credit. 2. On December 31, a decision was made...
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PART 1 The following information is available for a company as of January 1, 2019: Accounts Receivable Allowance for Doubtful Accounts Accounts Receivable (net) $300,000 (8,000) 292,000 The following events took place during 2019: 1. During the year, the company sold services for $600,000 cash and $2,800,000 on credit. 2. On December 31, a decision was made to estimate bad debts as 1% of credit sales. 3. Accounts Receivable of $3,000 from prior years was determined to be...
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Problem--Accounts Receivable (4 points each. 24 points total) Mega Multilayered Manufacturing ("Mega") was formed in 2017, and its fiscal year end is December 31st For all of the questions below, assume that on average 10.0% of its accounts receivable and 1.0% of its net credit sales are uncollecti ble (bad debts). 2017 and 2018 On December 31,...
ctice Assignment Gradebook ORION Downloadable eTextbook ment Lundell Company has these comparative balance sheet data Lendell Company Balance Sheets December 31 2020 2019 Cash $ 14,000 $29,000 Accounts receivable (net) 71,000 59,000 Inventory 50,000 49,000 Plant assets (net) 202,000 177,000 $347,000 $314,000 Accounts payable $50,000 $59,300 Mortgage payable (15%) 109,500 109,500 Common stock, $10 par 138,500 125,000 Retained earnings 49,000 20,200 $347,000 $314,000 Additional information for 2020: 1. Net Income was $24.400 2. Sales on account were $416,400. Sales retums...
Treat the following parts as three independent situations. Part 1 of 3 Lynbrook Automotive, Inc. applies the allowance method to record transactions relating to their accounts receivables. On December 31, 2019, the company had a debit balance of $700,000 in Accounts Receivable and a credit balance of $20,000 in their Allowance for Doubtful Accounts. During 2020, the company completed a number of transactions involving credit sales, accounts receivable collections, and bad debts. These transactions are summarized as follows: a) Provided...
Biblio... Saved Williams Company is a manufacturer of auto parts having the following financial statements for 2018-2019 Balance Sheet December 31 2819 2018 Cash $ 270,000 145,000 160,866 395,000 Accounts receivable 235,008 185,006 Inventory Total current assets $ 825,000 565,000 1,748,901,600,e89 $2,565,0e0 $2,165,0e0 Long-lived assets Total assets Current liabilities 275,000 900,000 990,00 320,000 900,000 1,345,009 Long-term debt Shareholders' equity $2,565,000 $2,165,000 Total debt and equity Income Statement For the years ended December 31 2019 2018 $3,600,000 $3,700,000 2,700,000 2,800,000 900,000...
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Exercise 18-09 Your answer is partially correct. Try again. Lendell Company has these comparative balance sheet data: Lendell Company Balance Sheets December 31 2020 2019 Cash $ 15,000 $30,000 Accounts receivable (net) 71,000 60,000 50,000 197,000 175,000 $344,000 $315,000 $50,000 $59,200 Mortgage payable (15%) 108,000 108,000 Common stock, $10 par 138,500 124,500 23,300 $344,000 $315,000 Inventory Plant assets (net) 61,000 Accounts payable Retained earnings 47,500 Additional information for 2020: 1. Net income...
C2-Selected information for Smith Company are presented below. (SK3, AR2: 10 marks) Cash Short-term investments Net receivables Inventories Total current liabilities December 31, 2019 100,000 50,000 250,000 200,000 250,000 December 31, 2018 $74,400 45,000 225,000 150,000 225,000 During 2019, net sales were $2,500,000, cost of goods sold was $2,000,000, and net income was $850,000. Required: Compute the following ratios for Smith Company at December 31, 2019: a. Current b. Acid-test. c. Accounts receivable turnover. d. Profit margin. e. Inventory turnover.
C2 - Selected information for Smith Company are presented below. (SK3, AR2: 10 marks] Cash Short-term investments Net receivables Inventories Total current liabilities December 31, 2019 100,000 50,000 250,000 200,000 250,000 December 31, 2018 $74,400 45,000 225,000 150,000 225.000 During 2019, net sales were $2,500,000, cost of goods sold was $2,000,000, and net income was $850,000 Required: Compute the following ratios for Smith Company at December 31, 2019: a. Current. b. Acid-test. c. Accounts receivable turnover. d. Profit margin. e....
C2 - Selected information for Smith Company are presented below. [SK3, AR2: 10 marks] December 31, 2019 December 31, 2018 Cash 100,000 50,000 250,000 200,000 250,000 $74,400 45,000 225,000 150,000 225,000 Short-term investments Net receivables Inventories Total current liabilities During 2019, net sales were $2,500,000, cost of goods sold was $2,000,000, and net income was $850,000. Required: Compute the following ratios for Smith Company at December 31, 2019: a. Current. b. Acid-test. c. Accounts receivable turnover. d. Profit margin. e....