An excerpt from the trial balance of ABC company shows the following: Accounts receivable - $100,000 Allowance for bad debts- $10,000 Sales- $5,000,000 Sales Discount- $3,000 Sales Returns and Allowances- $30,000 It is the company's policy to provide 1% of gross credit sales as bad debts.  Cash sales ammounted to $2,000,000 Questions: 1) Adjusting entries on December 31 2) Balance of Bad debts expense as of December 31 3) Balance of Allowances for Bad debts as of Decemember 31 4) Should the adjustment was not made, what is the effect on net income?

Q: Liang Company began operations in Year 1. During its first two years, the company completed a number…

A: Under Perpetual inventory method, the cogs is transferred from inventory account as when the sale is…

Q: Liang Company began operations in Year 1. During its first two years, the company completed a number…

A: Journal entry is a process of initially recording and classifying business transactions into books…

Q: Abbott Company uses the allowance method of accounting for uncollectible accounts.  Abbott estimates…

A: Unadjusted balance of Allowance for doubtful accounts = $2,400 - $1,800 = $600   Bad debt expense =…

Q: The balance in net accounts receivable on 30 June is: The balance in allowance for doubtful debts…

A: Computation of Balance of net accounts receivable as on 30 June in the hand of Com. A  Accounts…

Q: Washing Co. has the following information on December 31, 20x1 before any year-end adjustments.…

A: Allowance for doubtful accounts means where we expect some debts to become bad in near future then…

Q: At the beginning of the year, the Dallas Company had the following accounts on its books: Accounts…

A: In This Numerical Has Covered The Concept of Accounts Receivable.

Q: At December 31, Hawke Company reports the following results for its calendar year.   Cash sales $…

A: Introduction: Adjusting entries are made at the books of accounts to more accurately reflect your…

Q: Van Company provided the following data for the current year in relation to accounts receivable:…

A: Account receivable means the amount due from customer whom we sold the goods on credit. Allowance…

Q: At 30 September, Zebra Mountain had Accounts Receivable of $28,000 and Allowance for Bad Debts of…

A: Allowance for doubtful debt are the account used to record the debtors which are doubtful in nature.…

Q: The following are the transaction for the month of February     Cash Sales   $45000   Credit…

A: Accounts receivable:  It is a current asset of an organization. It is the amount due from customers…

Q: Menge Company has accounts receivable of $108,000 at March 31. Average Age of Receivables Balance,…

A: Journal entries are the entries to be recorded in the accounting books of the business for all the…

Q: At December 31, Hawke Company reports the following results for its calendar year. Cash sales:…

A: Whenever a business makes credit sales, it will generate accounts receivables for the business.…

Q: Al Bakara company report the following results for its calendar year December 31.2021 Cash sales…

A: Answer 1) The journal entry to record bad debts expense will be: Account Titles and Explanation…

Q: The following table was abstracted from the trial balance of Marion company at December 31, 20x2. On…

A: Accounts receivable:  It is a current asset of an organization. It is the amount due from customers…

Q: ts receivable 1,000,000 Allowance for Bad Debts 10,000 Sales 5,000,000 Sales Discount 3,000…

A: Bad debts are the accounts receivables that has reasonable certainty of non- recovery. The given…

Q: A company uses the percent of sales method to determine its bad debts expense. At the end of the…

A: The bad debt expense is the expense incurred due to non payment by debtors. The bad debt expense…

Q: The following transactions (in summary) affecting the accounts receivable of Seraphine company…

A: Allowance Method - Under allowance method company make provision of uncollectible accounts at the…

Q: Sherman Co. began operations in Year 1. During its first two years, the company completed several…

A: Journal: Recording of a business transactions in a chronological order.

Q: 3. The following information is available from the records of MANUEL Corp.: Accounts receivable,…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: On December 31, of the current year, Happening Company's unadjusted trial balance revealed the…

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…

Q: Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates…

A: Allowance for doubtful debts=Credit sale×2%=$105,000×2%=$2,100

Q: A/R: 5,000,000(debit) Allowance for Doubtful Accounts: 50,000 (debit) Gross Credit Sales:…

A: Uncollectible accounts are also known as bad debts. These are the amount due to debtors who didn't…

Q: On January 1, Five Star Services has the following balances: Accounts Receivable $24,000 (debit) Bad…

A: Gross accounts receivables = Beginning accounts receivables  + credit sales = $24000 + 100000 =…

Q: Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates…

A: Given information is: Abbott Company uses the allowance method of accounting for uncollectible…

Q: The trial balance before adjustment for Phil Collins Company shows the following balances.…

A: No. Account Titles and Explanation Debit Credit 1. Cash $22,500     Loss on…

Q: At December 31, Hawke Company reports the following results for its calendar year. Cash sales $…

A: Bad Debt Expense = Required Allowance for doubtful accounts - Beginning Balance of Allowance for…

Q: Von Company provided the following data for the current vear in relation to accounts receivable:…

A: Solution- Particulars Amount $ Current Assets-   Account Receivable-   Opening  560000.00…

Q: Al Bakara company report the following results for its calendar year December 31,2021. Cash sales…

A: Account Titles and Explanation  Debit   Credit  Bad debts expense  $      10,600…

Q: The ledger of Teal Mountain Inc. at the end of the current year shows Accounts Receivable $74,000;…

A: Alternatively, 'Uncollectibles expense account' can be used in place of 'bad debts expense'.

Q: Abbott Company uses the allowance method of accounting for uncollectible accounts. Abbott estimates…

A: Under the percentage of credit sales method, bad debt expenses would be based on total sales

Q: Rainbow Company reported the following balances at the beginning of current year,…

A: Solution A journal is a company's official book in which all business transactions are recorded in…

Q: Marion Company had sales revenue of $765,000 in 2019. Allowance for Bad Debts has a credit balance…

A: Age of Accounts Receivable AccountsReceivable PercentUncollectible  EstimatedUncollectible 1-30 $…

Q: Present the journal entry necessary to record each of the following items; assuming King Company…

A: The journal keeps the record for day to day transactions of the business on regular basis  The…

Q: Following are the account balances from the December 31 trial balance of Lark Company: Accounts…

A: Allowance for Bad Debts already has a credit balance of $2,400.  Ending Balance of Allowance for Bad…

Q: At the beginning of current year, Nostalgia Company reported the following information: Accounts…

A: Accounts receivable are described as those customers or firms who failed to provide cash payment to…

Q: Von Company provided the following data for the current year in relation to accounts receivable:…

A: Accounts receivable means the payments owing to a seller by purchasers who still haven't paid for…

Q: dit sales will be uncollectible. On January 1, Allowance for Doubtful Accounts had a credit balance…

A: A bad debt expense is recognized when a due  is not any longer collectible as a result of a client…

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: At December 31, Hawke Company reports the following results for its calendar year.   Cash sales $…

A: Introduction: An unadjusted trial balance lists the accounts of a general ledger. It's prepared at…

Q: Valli Company uses the percentage of sales method for recording bad debts expense. For the year,…

A: The bad debt expense is estimated on the basis of credit sales under percentage of sales method.

Q: Liang Company began operations in Year 1. During its first two years, the company completed a number…

A: Journal Entries: Journal entries are recognized in the journal book representing the monetary…

Q: Adjusting entries on December 31 2) Balance of Bad debts expense as of December 31 3) Balance of…

A: Net Sales = Gross Sale - Sale discount - Sales Return and allowances Net Sales = 5000000 -…

Q: An excerpt from the trial balance of ABC Company shows the following: Accounts Receivable…

A: Adjusting entries are made in order to close the accounts at the end of the accounting period.

Q: On January 1 five star services has the following balances accounts receivable $26,000 debit bad…

A: The accounts receivables are the debtors who would make the payment on due date.

Q: GG Company uses the percentage of sales method for recording bad debts expense. For the year, cash…

A: The bad debt expense is estimated on the basis of credit sales under percentage of sales method.

Q: During the current year, Robby’s Camera Shop had sales revenue of $157,000, of which $74,000 was on…

A: Given, 1) Bad debts of $1,800 to be accounted for. 2) provision for Doubtful debts to be created…

Q: Back Company uses the allowance method to account for uncollectible receivables. At the beginning of…

A: The allowance for the doubtful debt is a type of contra asset. The allowance for doubtful debts is a…

Q: During its first year of operations, World Class Sport Shoes earned net credit sales of $400,000.…

A: Bad debts expense: Bad debts expense is recognized in the books of the company when a debtor is…

Conversion Cycle

Conversion cycle is also known as cash cycle or net operating cycle. Conversion cycle refers to how much time a company takes to turn its investments which is done from stock or any other financial resources into cash flows from sales.