If we use the percentage of receivables approach, we need to calculate historical % of sales...
If we use the percentage of receivables approach, we need to calculate historical % of sales not collected and multiply it by current sales for the year True False
Homework Answers
Answer
--FALSE.
--Under percentage of receivables approach, a certain percentage of year end 'account receivables' is estimated to be uncollectible for the calculation of adjustment of Uncollectible expense.
--Only when using the % of sales method that historical % of sales not collected is estimated and multiplied by current sales for the year bad debt expense.
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If we use the percentage of receivables approach, we need to
calculate historical % of sales...
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information...
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information applies to the questions displayed below.) A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 3 3. Calculate the effect on net income (before taxes) and total assets in Year 1 for...
Calculate ending receivables assuming opening receivables were $150,000 and sales and collections for the year were...
Calculate ending receivables assuming opening receivables were $150,000 and sales and collections for the year were $600,000 and $580,000 respectively. Calculate amount collected if sales were $500,000, and opening and ending receivables were $120,000 and $110,000 respectively.
1)Concerning the various methods for accounting for uncollectible receivables, the percentage of credit sales method is...
1)Concerning the various methods for accounting for uncollectible receivables, the percentage of credit sales method is an example of the allowance method. True False 2)The cost of goods sold model for a manufacturer is: Beginning Finished Goods Inventory + Purchases (net) = Cost of Goods Available for Sale - Ending Finished Goods Inventory = Cost of Goods Sold True False 3)Trade receivables are amounts due from customers and non-trade receivables are amounts due from all other parties. True False 4)Net...
Under the percentage of receivables method, the adjusting entry at the end of the period for...
Under the percentage of receivables method, the adjusting entry at the end of the period for bad debt expense is not affected by the current balance in the allowance for bad debts accoun True False
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) The following information...
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) The following information applies to the questions displayed below.] A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 1 Required: 1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. The company estimates...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the completion of the current fiscal year...
Uncollectible Accounts—Percentage of Sales and Percentage of Receivables At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yang's Gift Shop was $28,250. Credit sales for the year were $355,200. Required: Make the necessary adjusting entry in general journal form under each of the following assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value. 1. Allowance for Doubtful Accounts has a credit balance of $345. a. The...
Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information applies to...
Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information applies to the questions displayed below.) A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 2 2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. The company estimates 3% of credit...
Exercise 5-20A Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) (The following information applies to...
Exercise 5-20A Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) (The following information applies to the questions displayed below.) Suzuki Supply reports the following amounts at the end of 2021 (before adjustment). Credit Sales for 2021 Accounts Receivable, December 31, 2021 Allowance for Uncollectible Accounts, December 31, 2021 $250,000 45,000 1,000 (debit) kercise 5-20A Part 1 quired: Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 10% of ceivables will not be collected. (If no...
As an alternative to the percent of revenue or sales method, which focuses on estimating the...
As an alternative to the percent of revenue or sales method, which focuses on estimating the expense of uncollectible accounts, companies may estimate the amount of the adjusting entry to record uncollectible accounts expense using the percent of receivables method. The A/R method of estimating the amount of uncollectible accounts is done by taking a percent of the outstanding receivables balance. The percentage is frequently based on a combination of factors such as historical experience, conditions of the economy, and...
UNCOLLECTIBLE ACCOUNTS_PERCENTAGE OF SALES AND PERCEN OF RECEIVABLES At the completion of the current fiscal year...
UNCOLLECTIBLE ACCOUNTS_PERCENTAGE OF SALES AND PERCEN OF RECEIVABLES At the completion of the current fiscal year ending December the balance of Accounts Receivable for Yang's Gift Shop was $30,000. Credit sales fo the year were $355,200. REQUIRED Make the necessary adjusting entry in general journal form under each of the fol- lowing assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value. 1. Allowance for Doubtful Accounts has a credit balance of $330. (a) The...
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information applies to the questions displayed below.) A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 3 3. Calculate the effect on net income (before taxes) and total assets in Year 1 for...
Under the percentage of receivables method, the adjusting entry at the end of the period for bad debt expense is not affected by the current balance in the allowance for bad debts accoun True False
Required information Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) The following information applies to the questions displayed below.] A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 1 Required: 1. Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. The company estimates...
Exercise 5-19B Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) [The following information applies to the questions displayed below.) A company reports the following amounts at the end of Year 1 (before adjustment). Credit Sales for Year 1 Accounts Receivable, December 31, Year 1 Allowance for Uncollectible Accounts, December 31, Year 1 $ 252,000 47,000 1,200 (Credit) Exercise 5-19B Part 2 2. Record the adjusting entry for uncollectible accounts using the percentage-of-credit-sales method. The company estimates 3% of credit...
Exercise 5-20A Compare the percentage-of-receivables method and the percentage-of-credit-sales method (LO5-9) (The following information applies to the questions displayed below.) Suzuki Supply reports the following amounts at the end of 2021 (before adjustment). Credit Sales for 2021 Accounts Receivable, December 31, 2021 Allowance for Uncollectible Accounts, December 31, 2021 $250,000 45,000 1,000 (debit) kercise 5-20A Part 1 quired: Record the adjusting entry for uncollectible accounts using the percentage-of-receivables method. Suzuki estimates 10% of ceivables will not be collected. (If no...
UNCOLLECTIBLE ACCOUNTS_PERCENTAGE OF SALES AND PERCEN OF RECEIVABLES At the completion of the current fiscal year ending December the balance of Accounts Receivable for Yang's Gift Shop was $30,000. Credit sales fo the year were $355,200. REQUIRED Make the necessary adjusting entry in general journal form under each of the fol- lowing assumptions. Show calculations for the amount of each adjustment and the resulting net realizable value. 1. Allowance for Doubtful Accounts has a credit balance of $330. (a) The...
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