Fiscal Year Ended:Net SalesCoca-ColaPepsiCoAccounts ReceivableAllowance for Doubtful AccountsAccounts Receivable, Net of AllowancePAS-5 Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days to CollectCoca-Cola and PepsiCo are two of the largest and most successful beverage companies in theworld in terms of the products that they sell and their receivables management practices. To evalu-ate their ability to collect on credit sales, consider the following rounded amounts reported in theirannual reports (amounts in millions).1.Coca-Cola20180S 2017$35,4104,1504803,670$31,8603,8904903,4002016$41,8604,3304703,8602018$64,6607,2401007,140bylinePepsiCo6901 2017$63,5257,1551307,025LOM2016$62,8006,8351356,700Required:bris 02 snut no 12575in low M23 sin temosrytą legioning baa lassani oor lam liv M23 vatno smo se sasCalculate the receivables turnover ratios and days to collect for Coca-Cola and PepsiCo for2018 and 2017. (Round to one decimal place.)2. Which of the companies is quicker to convert its receivables into cash in 2018? in 2017? Afondusi noitammolni bebiving and oud JassiW dowOWI Pil

The account receivables turnover ratio tells about the efficiency of the business to convert its…

Coca-Cola PepsiCo Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts unts Receivable Net of Allowance Coca-Cols and PepsiCo are two of the largest and most successful beverage companies world in terms of the products that they sell and their receivables management practices. To evalu- ate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). 2018 B $31,860 3,890 490 3,400 all Coca-Cola 1909 2017 $35,410 4,150 480 3,670 von Bodybu PepsiCoani huM 24 SO12016 2016 125 2018ms od 2017 $41,860 $63,525 4,330 7,155 470 130 3,860 7,025 $64,660 7,240 100 7,140 $62,800 6,835 135 6,700

Coca-Cola PepsiCo Fiscal Year Ended: Net Sales Accounts Receivable Allowance for Doubtful Accounts unts Receivable Net of Allowance Coca-Cols and PepsiCo are two of the largest and most successful beverage companies world in terms of the products that they sell and their receivables management practices. To evalu- ate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). 2018 B $31,860 3,890 490 3,400 all Coca-Cola 1909 2017 $35,410 4,150 480 3,670 von Bodybu PepsiCoani huM 24 SO12016 2016 125 2018ms od 2017 $41,860 $63,525 4,330 7,155 470 130 3,860 7,025 $64,660 7,240 100 7,140 $62,800 6,835 135 6,700

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

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Tonis Tech Shop has total credit sales for the year of 170,000 and estimates that 3% of its credit sales will be uncollectible. Allowance for Doubtful Accounts has a credit balance of 275. Prepare the adjusting entry at year-end for the estimated bad debt expense. (a) Based on an aging of its accounts receivable, Kyles Cyclery estimates that 3,200 of its year-end accounts receivable will be uncollectible. Allowance for Doubtful Accounts has a debit balance of 280 at year-end. Prepare the adjusting entry at year-end for the estimated uncollectible accounts.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Yangs Gift Shop was 30,000. 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 330. (a) The percentage of sales method is used and bad debt expense is estimated to be 2% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 6,950 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 400. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 5,685 in uncollectible accounts.
Accounts Receivable Balance Hart Inc. began the year with $315,700 of accounts receivable. During the year, Hart sold a considerable amount of merchandise on credit and collected $2,427,000 of its credit sales. At the end of the year, the accounts receivable balance is $16,800 lower than the beginning balance. Required: Calculate the amount of credit sales during the period.
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.
Casebolt Company wrote off the following accounts receivable as uncollectible for the first year of its operations ending December 31: a. Journalize the write-offs under the direct write-off method. b. Journalize the write-offs under the allowance method. Also, journalize the adjusting entry for uncollectible accounts. The company recorded 5,250,000 of credit sales during the year. Based on past history and industry averages, % of credit sales are expected to be uncollectible. c. How much higher (lower) would Casebolt Companys net income have been under the direct write-off method than under the allowance method?
Bad Debt Expense: Percentage of Credit Sales Method Gilmore Electronics had the following data for a recent year: Cash sales $135,000 Credit sales 512,000 Accounts receivable determined to be uncollectible 9,650 The firms estimated rate for bad debts is 2.2% of credit sales. Required: 1. Prepare the journal entry to write off the uncollectible accounts. 2. Prepare the journal entry to record the estimate of bad debt expense. 3. If Gilmore had written off $3,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed? 4. CONCEPTUAL CONNECTION If Gilmores estimate of bad debts is correct (2.2% of credit sales) and the gross margin is 20%, by how much did Gilmores income from operations increase assuming $150,000 of the sales would have been lost if credit sales were not offered?
UNCOLLECTIBLE ACCOUNTS-PERCENTAGE OF SALES Nicoles Neckties has total credit sales for the year of 380,000 and estimates that 2% of its credit sales will be uncollectible. Record the end-of-period adjusting entry on December 31, in general journal form, for the estimated bad debt expense. Assume the following independent conditions existed prior to the adjustment: 1. Allowance for Doubtful Accounts has a credit balance of 430. 2. Allowance for Doubtful Accounts has a debit balance of 295.
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.
Bad Debt Expense: Aging Method Glencoe Supply had the following accounts receivable aging schedule at the end of a recent year. The balance in Glencoes allowance for doubtful accounts at the beginning of the year was $58,620 (credit). During the year, accounts in the total amount of $62,400 were written off. Required: 1. Determine bad debt expense. 2. Prepare the journal entry to record bad debt expense. 3. If Glencoe had written off $90,000 of receivables as uncollectible during the year, how much would bad debt expense reported on the income statement have changed?
Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
UNCOLLECTIBLE ACCOUNTSPERCENTAGE OF SALES AND PERCENTAGE OF RECEIVABLES At the completion of the current fiscal year ending December 31, the balance of Accounts Receivable for Andersons Greeting Cards was 180,000. Credit sales for the year were 1,950,000. 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 2,600. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.5% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 30,250 in uncollectible accounts. 2. Allowance for Doubtful Accounts has a debit balance of 1,900. (a) The percentage of sales method is used and bad debt expense is estimated to be 1.0% of credit sales. (b) The percentage of receivables method is used and an analysis of the accounts produces an estimate of 20,500 in uncollectible accounts.
Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. 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.