Fan-Tastic Sports Gear Inc. recorded $2,900,000 of sales last year and projects sales to increase by $350,000 in the current year. Last year, 80% of sales were on account, with övel300 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 companyestimated 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 entryto provide for doubtful accounts on December 317 Round all computations to the nearest dollar. S2. 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 offmethod? (Enter "o it there is no change.) Higher by SBalance sheet3. Usina the allowance method, the net realizable value of the receivables would appear on which financial statement?

In this question, we have to do adjusting entry in allowance calculation. Under direct method, bad…

B00 customer accounts. Bad debt expense was $26,187. 1. Assume that Fan-Tastic Sports Gear Inc., used the allowance method last year, and estimated uncollectible accounts expense using the percent of credit sales method to provide for doubtful accounts on December 317? Round all computations to the ne 2. How much higher (lower) would Fan-Tastic Sports Gear Inc 's net inoome have bee

B00 customer accounts. Bad debt expense was $26,187. 1. Assume that Fan-Tastic Sports Gear Inc., used the allowance method last year, and estimated uncollectible accounts expense using the percent of credit sales method to provide for doubtful accounts on December 317? Round all computations to the ne 2. How much higher (lower) would Fan-Tastic Sports Gear Inc 's net inoome have bee

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter16: Accounting For Accounts Receivable

Section: Chapter Questions

Problem 3CP: At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in...

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At the end of 20-3, Martel Co. had 410,000 in Accounts Receivable and a credit balance of 300 in Allowance for Doubtful Accounts. Martel has now been in business for three years and wants to base its estimate of uncollectible accounts on its own experience. Assume that Martel Co.s adjusting entry for uncollectible accounts on December 31, 20-2, was a debit to Bad Debt Expense and a credit to Allowance for Doubtful Accounts of 25,000. (a) Estimate Martels uncollectible accounts percentage based on its actual bad debt experience during the past two years. (b) Prepare the adjusting entry on December 31, 20-3, for Martel Co.s uncollectible accounts.
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?
Martel Co. has 320,000 in Accounts Receivable on December 31, 20-1, the end of its first year of operations. The business is new, so it has no prior experience with uncollectible accounts. In Martels overall industry, the percentage of uncollectible accounts receivable is about 3%. For companies similar to Martel in size and operations, the percentage is about 5%. Martel decides to use the overall industry experience as the basis for its estimate of uncollectible accounts. Prepare the adjusting entry on December 31, 20-1 for Martel Co.s uncollectible accounts.
Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of goods sold was 240,000, its operating expenses were 50,000, its interest revenue was 2,000, and its interest expense was 12,000. Brandts income tax rate is 30%. Prepare Brandts multiple-step income statement for the current year.
Paula has sales that qualify to be reported on the installment basis. In year 2, installment sales were 40,000 with a cost of 30,000. In year 3, installment sales were 50,000 with a cost of 25,000. Collections in year 2 were in the amount of 30,000. Collections in year 3 were 10,000 on the year 2 sales and 30,000 on the year 3 sales. How much deferred gross profit exists as of the end of year 2? a. 2,500 b. 5,000 c. 7,500 d. 10,000