Alan uses the income statement approach in estimating uncollectible accounts expense, and uncollectible accounts expense is estimated to be 2% of credit sales. The sales during the month of January was $900 000, of which 20% was cash sales. What is the amount of uncollectible accounts expense recognized in Alan's income statement for January? (1 mark)
Q: Hanse, Inc., has a cash cycle of 37.5 days, an operating cycle of 51 days, and an inventory period…
A: We need to use the following equations for calculation of accounts payable and accounts receivable…
Q: On September 30, Valerian Co. had a $111,500 balance in Accounts Receivable. During October, the…
A: Given: Data for Accounts receivables: Opening - $111,500 Collection Made - $111,890 Closing -…
Q: For its most recent year a company had Sales (all on credit) of $750,000 and Cost of Goods Sold of…
A: The ratio analysis helps to analyse the financial statements of the business.
Q: Based on the following data for the current year, what is the number of days' sales in receivables…
A: Number of days' sales in receivable = 365/Accounts receivable turnover Accounts receivable turnover…
Q: In October, Z-Mart had $475,000 in net credit sales and $75,000 in accounts receivable. Calculate…
A: The account receivables turnover ratio is calculated as net sales divided by account receivables.…
Q: Based on the following data for the current year, what is the number of days' sales in receivables?…
A: Accounts receivable Receivables are payments that have not yet been received. This means that the…
Q: Taehyung Company provided the following data: On January 1, the company’s account receivable and…
A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are…
Q: Mason Corp. operates in a province with a 8% PST. The store must also collect5% GST on all sales.…
A: Accounts receivable is the ledger that represents the amount of sales made on credit and pending for…
Q: The following information relates to Eva Co's sales tax for the month of March 20X3: $ 109,250 Sales…
A: We have the following information: Sales (including sales tax): $109,250 Purchases (net of sales…
Q: Barga Company's net sales for Year 1 and Year 2 are $669,000 and $750,000, respectively. Its…
A: Solution:- a)Calculation of the days' sales uncollected at the end of each year as follows under:-
Q: Based on the following data for the current year, what is the number of days' sales in receivables?…
A: Ratio analysis means where different ratio of various years of years companies has been compared and…
Q: For its most recent year a company had Sales (all on credit) of OMR 830000 and Cost of Goods Sold…
A: For calculation of receivables days, we need to use the following equation Receivables days =Average…
Q: Barga Company's net sales for Year 1 and Year 2 are $666,000 and $747,000, respectively. Its…
A: The ratio analysis helps to analyse the financial statements of the business. The days' sales…
Q: The financial statements of the Splish Brothers Inc. reports net sales of $360000 and accounts…
A: The average collection period seems to be the length of time it requires for a company to obtain…
Q: following data for the current year, what is the number of days' sales in receivables (rounded to…
A: Accounts receivable (AR) seems to be the amount owed to a company for products or services provided…
Q: Determine the estimated cash collected on customers' accounts in June.
A: For Customers receiving discount: May month collection in June = (140000*15%) - 2% discount = $20580…
Q: Barga Co.'s net sales for Year 1 and Year 2 are $665,000 and $749,000, respectively. Its year-end…
A: Days sales uncollected indicates the cash collection from its sales. It can be calculated by…
Q: Spencer Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for May and…
A: June collections= (25% of may collections)+ (75% of June collections) Where, 25% of May collections…
Q: A Plus Services has the following transactions during January: Credit sales of $110,000, collections…
A: There are two types of method for recording the bad debt expense: Direct Write-Off Method: Under…
Q: The following data pertains to the customers' accounts of ABC Corp at June 30, 20X1: Accounts…
A: Sales made by business can be for cash or on credit basis. Under credit basis, accounts receivable…
Q: Yellow Company had a balance of $85,000 in Accounts Payable at the beginning of June, and purchased…
A: Opening accounts payable = $85,000 Purchases = $180,000 Closing accounts payable = $60,000
Q: Walker Clothing Store had a balance in the Accounts Receivable account of $390,000 at the beginning…
A: Income statement: The income statement is one of the three primary financial statements used to…
Q: On April 30, Holden Company had an Accounts Receivable balance of $18,000. During the month of May.…
A: Solution: Accounts Receivable are the balance of amount which is due to a company for the goods…
Q: Last year, Toby's Hats had net sales of $45,000,000 and cost of goods sold of $29,000,000. Toby's…
A: Introduction: Accounts receivable turnover ratio : Division of Average Accounts receivable with Net…
Q: Manuel Company had cash sales of $86,800 (including taxes) for the month of June. Sales are subject…
A: Solution: Amount of sales without tax = $86,800 * 100 / 108.50% = $80,000 Amount of sales tax =…
Q: My business has a net sales of $3,492,690, of which 40% was cash ($1,397,076), 50% was on account…
A: Accrual basis of accounting: Accrual basis of accounting refers to recognizing the expenses and…
Q: At the beginning of the year, ABC's Accounts Receivable balance was $82,300. During the year ABC…
A: The account receivables are also known by the name of debtors. These are the values due to a firm on…
Q: Credit sales during the year were $425,000, the Allowance for Uncollectible Accounts had a beginning…
A: Uncollectible Accounts Expense = Credit sales during the year x 2% of all credit sales
Q: At the end of October, Santa Fe Company’s management estimates the uncollectible accounts expense to…
A: The allowance for doubtful accounts is established to maintain the reserves for uncollectible…
Q: Taehyung Company provided the following data: On January 1, the company’s account receivable and…
A: Net sales = Cash receipts from customers + Ending accounts receivable - Beginning accounts…
Q: The income statement approach to estimating uncollectible accounts expense is used by Kerley…
A: Allowance for doubtful accounts will be considered as a "Contra Asset" as it will reduce the amount…
Q: The financial statements of the Blue Spruce Corp. reports net sales of $372000 and accounts…
A: The average collection period indicates the time period the business takes to collect amounts from…
Q: The following data were reported by Vegetta Company during the current year: Accounts payable –…
A: Gross purchases refer to the amount of purchase before deducting the purchase discounts or purchase…
Q: On January 1, A Plus Services has the following balances: Accounts Receivable $28,000 (debit)…
A: Accounts Receivables are those persons to whom business has made sales on account. They have to pay…
Q: On May 1, Jensen's had a beginning cash balance of $284. April sales were $810 and May sales were…
A: A cash budget is an estimation of expected cash receipts and disbursements on the basis of past…
Q: For the month of December, the records of Taboo Corporation show the following information: Cash…
A: Gross sales = Cash sales + Credit sales where, Credit sales = Ending Accounts Receivable + Cash…
Q: Marr Co. had the following sales and accounts receivable balances, prior to any adjustments at year…
A: The allowance for doubtful accounts is established to record the estimated bad debts and further…
Q: The financial statements of the Sunland Company report net sales of $384000 and accounts receivable…
A: Accounts receivable turnover ratio = Net credit sales / Average Accounts Receivables where, Average…
Q: At the end of the year Stan Still Stationery Store had the following balances: Sales $485,000; Sales…
A: Net sales can be calculated by deducting sales discounts and sales returns and allowances from the…
Q: Credit sales during the year were $425,000, the Allowance for Uncollectible Accounts had a beginning…
A: Uncollectible accounts are those accounts receivables from which amount due on credit sales will not…
Q: The income statement approach to estimating uncollectible accounts expense is used by Burgess…
A: Bad debts also called Uncollectible accounts expense is monetary expense which is due on creditor of…
Q: On April 30, Gomez Services had an Accounts Receivable balance of $30,100. During the month of May,…
A: Accounts receivable: Accounts receivable refers to the amounts to be received within a short period…
Q: Based on the following data for the current year, what is the number of days' sales in receivable?…
A: Calculate accounts receivable turnover:
Q: Library Company provided the following data: On January 1, the company’s account receivable and…
A: Accrual basis: Under accrual basis accounting, revenue and expenses are recognized when they are…
Q: The following information relates to Eva Co's sales tax for the month of March 20X3: $ Sales…
A: We have the following information: Sales (including sales tax): $109,250 Purchases (net of sales…
Q: Spencer Consulting, which invoices its clients on terms 2/10, n/30, had credit sales for May and…
A: June collections= (25% x May month sales) + (75% x June month sales) 25% of May month sales = (15%…
Q: The financial statements of the Windsor, Inc. report net sales of $372000 and accounts receivable of…
A: Average collection period for accounts receivable = 365 days/Accounts receivable turnover ratio
Q: January, Lily Bhd sold goods at a quoted price of RM10,000 with a credit term of 2/10, net 90. Show…
A: credit term of 2/10, net 90 means credit is allowed for 90 days. If the payment will receive within…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Last year, Tobys Hats had net sales of 45,000,000 and cost of goods sold of 29,000,000. Tobys had the following balances: Refer to the information for Tobys on the previous page. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.The following selected information is taken from the financial statements of Arnn Company for its most recent year of operations: During the year, Arnn had net sales of 2.45 million. The cost of goods sold was 1.3 million. Required: Note: Round all answers to two decimal places. 1. Compute the current ratio. 2. Compute the quick or acid-test ratio. 3. Compute the accounts receivable turnover ratio. 4. Compute the accounts receivable turnover in days. 5. Compute the inventory turnover ratio. 6. Compute the inventory turnover in days.Jars Plus recorded $861,430 in credit sales for the year and $488,000 in accounts receivable. The uncollectible percentage is 2.3% for the income statement method, and 3.6% for the balance sheet method. A. Record the year-end adjusting entry for 2018 bad debt using the income statement method. B. Record the year-end adjusting entry for 2018 bad debt using the balance sheet method. C. Assume there was a previous debit balance in Allowance for Doubtful Accounts of $10,220, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method. D. Assume there was a previous credit balance in Allowance for Doubtful Accounts of $5,470, record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
- If a customer owed your company $100 on the first day of the month, then purchased $200 of goods on credit on the fifth and paid you $50 on fifteenth, the customers ending balance for the month would show a (debit or credit) of how much?Juroe Company provided the following income statement for last year: Juroes balance sheet as of December 31 last year showed total liabilities of 10,250,000, total equity of 6,150,000, and total assets of 16,400,000. Required: Note: Round answers to two decimal places. 1. Calculate the times-interest-earned ratio. 2. Calculate the debt ratio. 3. Calculate the debt-to-equity ratio.FINANCIAL RATIOS Based on the financial statements, shown on pages 603604, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventory
- Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods? A. $3,100 B. $13,800 C. $10,700 D. $77,500Ratio Analysis The following information was taken from Nash Inc.s trial balances as of December 31, 2018, and December 31, 2019. Required: 1. Calculate the net profit margin and accounts receivable turnover for 2019. ( Note: Round answers to two decimal places.) 2. How much does Nash make on each sales dollar? 3. How many days does the average receivable take to be paid (assuming all sales are on account)?The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions for January using a sales journal, page 73; a purchases journal, page 56; a cash receipts journal, page 38; a cash payments journal, page 45; and a general journal, page 100. Assume the periodic inventory method is used. 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily those entries involving the Other Accounts columns and the general journal to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Add the columns of the special journals and prove the equality of the debit and credit totals. 6. Post the appropriate totals of the special journals to the general ledger. 7. Prepare a trial balance. 8. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?
- The following transactions were completed by Hammond Auto Supply during January, which is the first month of this fiscal year. Terms of sale are 2/10, n/30. The balances of the accounts as of January 1 have been recorded in the general ledger in your Working Papers or in CengageNow. Hammond Auto Supply does not track cash sales by customer. Jan. 2Issued Ck. No. 6981 to JSS Management Company for monthly rent, 775. 2J. Hammond, the owner, invested an additional 3,500 in the business. 4Bought merchandise on account from Valencia and Company, invoice no. A691, 2,930; terms 2/10, n/30; dated January 2. 4Received check from Vega Appliance for 980 in payment of 1,000 invoice less discount. 4Sold merchandise on account to L. Paul, invoice no. 6483, 850. 6Received check from Petty, Inc., 637, in payment of 650 invoice less discount. 7Issued Ck. No. 6982, 588, to Fischer and Son, in payment of invoice no. C1272 for 600 less discount. 7Bought supplies on account from Doyle Office Supply, invoice no. 1906B, 108; terms net 30 days. 7Sold merchandise on account to Ellison and Clay, invoice no. 6484, 787. 9Issued credit memo no. 43 to L. Paul, 54, for merchandise returned. 11Cash sales for January 1 through January 10, 4,863.20. 11Issued Ck. No. 6983, 2,871.40, to Valencia and Company, in payment of 2,930 invoice less discount. 14Sold merchandise on account to Vega Appliance, invoice no. 6485, 2,050. Jan. 18Bought merchandise on account from Costa Products, invoice no. 7281D, 4,854; terms 2/10, n/60; dated January 16; FOB shipping point, freight prepaid and added to the invoice, 147 (total 5,001). 21Issued Ck. No. 6984, 194, to M. Miller for miscellaneous expenses not recorded previously. 21Cash sales for January 11 through January 20, 4,591. 23Issued Ck. No. 6985 to Forbes Freight, 96, for freight charges on merchandise purchased on January 4. 23Received credit memo no. 163, 376, from Costa Products for merchandise returned. 29Sold merchandise on account to Bruce Supply, invoice no. 6486, 1,835. 31Cash sales for January 21 through January 31, 4,428. 31Issued Ck. No. 6986, 53, to M. Miller for miscellaneous expenses not recorded previously. 31Recorded payroll entry from the payroll register: total salaries, 6,200; employees federal income tax withheld, 872; FICA Social Security tax withheld, 384.40, FICA Medicare tax withheld, 89.90. 31Recorded the payroll taxes: Social Security tax, 384.40, FICA Medicare tax, 89.90; state unemployment tax, 334.80; federal unemployment tax, 37.20. 31Issued Ck. No. 6987, 4,853.70, for salaries for the month. 31J. Hammond, the owner, withdrew 1,000 for personal use, Ck. No. 6988. Required 1. Record the transactions in the general journal for January. If you are using Working Papers, start with page 1 in the journal. Assume the periodic inventory method is used. The chart of accounts is as follows: 2. Post daily all entries involving customer accounts to the accounts receivable ledger. 3. Post daily all entries involving creditor accounts to the accounts payable ledger. 4. Post daily the general journal entries to the general ledger. Write the owners name in the Capital and Drawing accounts. 5. Prepare a trial balance. 6. Prepare a schedule of accounts receivable and a schedule of accounts payable. Do the totals equal the balances of the related controlling accounts?FINANCIAL RATIOS Based on the financial statements foe Jackson Enterprises (income statement, statement of owners equity, and balance sheet) shown on pages 598599, prepare the following financial ratios. All sales are credit sales. The Accounts Receivable balance on January 1, 20--, was 21,600. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and average number of days required to collect receivables 6. Inventory turnover and average number of days required to sell inventoryFINANCIAL RATIOS Based on the financial statements, shown on pages 605606, for McDonald Carpeting Co. (income statement, statement of owners equity, and balance sheet), prepare the following financial ratios. All sales are credit sales. The balance of Accounts Receivable on January 1, 20--, was 6,800. 1. Working capital 2. Current ratio 3. Quick ratio 4. Return on owners equity 5. Accounts receivable turnover and the average number of days required to collect receivables 6. Inventory turnover and the average number of days required to sell inventory