Fan-Tastic Sports Gear Inc. recorded $2,900,000 of sales last year and projects sales to increase by $360,000 in the current year. Last year, 90% of sales were on account, with over 300 customer accounts. Bad debt expense was $26,187.
1. Assume that Fan-Tastic Sports Gear Inc. used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2,240. The company estimated uncollectible accounts expense using the percent of credit sales method and expected 0.75% of credit sales to be uncollectible. What is the amount of the adjusting entry to provide for doubtful accounts on December 31? Round all computations to the nearest dollar.
2. How much higher (lower) would Fan-Tastic Sports Gear Inc.’s net income have been under the allowance method assumption previously shown in (1) than under the direct write-off method? (Enter “0” if there is no change.)
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Fan-Tastic Sports Gear recorded $2,900,000 of sales last year and projects sales to increase by $360,000 in the current year. Last year, 90% of sales were on account, with over 300 customer accounts. Bad debt expense was $26,187. 1. Assume that Fan-Tastic Sports Gear used the allowance method last year, and the allowance account at the end of the year had a debit balance of $2,190. The company estimated uncollectible accounts expense using the percent of credit sales method and...
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PLEASE HELP!!!!!! Note Receivable In the trial balance for March, you see that Notes Receivable-Fast Feet co has a negative balance of $105, which would seem to indicate that Fast rece paid too much. Looking back through the journal entries for March, you find that on March 19 the accounting intern recorded receipt of $3,005 m payment of this note receivable. Further investigation reveals that on November 19, 2017, this note receivable was received from Fast Feet Co. for $3,500....
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