If Gilmore's estimate of bad debts is correct (2.2% of credit sales) and the gross margin is 20%, by how much did Gilmore's income from operations increase assuming $150,000 of the sales would have been lost if credit sales were not offered?
Q: The following data pertains to ABC Corp: Credit sales for the period, P3,000 Credit balance of the…
A: Estimated uncollectible = P1 000,000 x 3% = P30,000 Bad debt expense = P30,000 - P8,000 = P22,000
Q: Historically, Ragman Company has had no significant bad debt experience with its customers. Cash…
A: A budget involves estimation of expected revenues and expenses of an entity over a specific time…
Q: Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the period.…
A: Account receivable means the amount due from customer whom we sold the goods on credit. Allowance…
Q: ABCD Corporation has credit sales of $10,640,000 and receivables of $1,520,000. a. What is the…
A: Receivables turnover = Credit sales / Accounts receivable Average collection period = 365/…
Q: Assume Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for the…
A: Bad debt expense: Bad debt expense is an expense account. The amounts of loss incurred from…
Q: Godzilla Corp. has the following account balances on December 31st: Sales revenues (100% on…
A: Net credit sales=Sales revenues (100% on credit)-Sales returns and allowances-Sales discounts
Q: KK Co. normally takes 30 days to pay for its average daily credit purchases of P2,000. Its average…
A: The question is multiple choice question. Required Choose the Correct Option.
Q: Saint John Industries uses the percentage of credit sales method to estimate Bad Debt Expense. The…
A: Accounts receivable refers to the amount of credit allowed to the customer for which the amount is…
Q: ORANGE Co. factored ₱3,000,000 of accounts receivable without recourse. The factor required an…
A: Factoring of receivables refers to the selling of accounts receivable to a financial company at a…
Q: Flyer Company has provided the following information • Cash sales, $325,000 • Credit sales, $850.000…
A: Gross Profit is excess of Net Revenue over cost of manufacturing including all direct costs whereas…
Q: Matu Inc. has the following information during the year: sales 2,000,000 sales discounts 30,000…
A: Account receivable is the asset which show the amount to be receivable from the customer on their…
Q: Libre, Inc. has experienced bad debt losses of 4% of credit sales in prior periods. At the end of…
A: Under % of credit sales method, Bad debt expense is calculated as = Credit Sales * Estimated % of…
Q: Credit sales were $100,000 for the year, ending Accounts receivable was $25,000. The company…
A: Solution: Amount of bad debt expense to be booked = Credit sales * 5%
Q: Last year, the Tilden Co. had credit sales in the amount of $470,000, and it had uncollectible…
A: Formula: Estimated uncollectible accounts = Credit sales x percent of estimated uncollectible…
Q: Leonard had credit sales of $1,200,000, a balance in accounts receivable of $250,000 and an…
A: Bad debt expenses are the expenses written off to account for the uncollectible debtors. Allowance…
Q: agement estimated that 2.75% of its net sales of $18,000 would not be collected.
A: A bad debt expense is recognised when a receivable is no longer collectible as a result of a…
Q: Assume Simple Co. had credit sales of $254,000 and cost of goods sold of $154,000 for the period.…
A: Required journal entry as on end-of-period adjustment is as follows:
Q: Aerospace Electronics reports $568,000 in credit sales for 2018 and $634,500 in 2019. They have a…
A: Under Income statement method, bad debt estimation is calculated as a percentage of credit sales.…
Q: Assume that Simple Co. had credit sales of $250,000 and cost of goods sold of $150,000 for…
A: Bad debt expense: It is an expense account. The amount of loss incurred from extending credit to the…
Q: Wellington Corp. has outstanding accounts receivable totaling $6.5 million as of December 31 and…
A: Estimated uncollectible = outstanding accounts receivable x 6% = 6,500,000 x 6%…
Q: Flyer Company has provided the following information prior to any year-end bad debt adjustment: •…
A: SOLUTION- WORKING NOTE- CALCULATION OF BAD DEBT EXPENSE = CREDIT SALE * PERCENTAGE OF BAD DEBT…
Q: Winstead & Company has accounts receivable of $120,000 and a negative balance of $1,000 in the…
A: Introduction: Accounts receivable: Its a current Asset Item which is to be shown in Balance sheet…
Q: Interpreting Accounting Data The following table presents the net sales and the actual bad debts for…
A: Bad debt is considered an expense. It is a non-recoverable amount from debtors. It is estimated on…
Q: Martin Incorporated uses the percent-of-credit sales method to estimate uncollectibles. Total sales…
A: Bad debts expense = Credit sales x 5% Balance in allowance for uncollectible accounts after the…
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: A company's management estimates that 2.5% of net credit sales will be uncollectible net credit…
A: Income statement: The income statement determines the net income of the business by subtracting the…
Q: Bulldogs Inc. had credit sales last year amounted to P18,600,000. The firm also had an average…
A: Since you have asked multiple question, we will solve the first question for you. If you want any…
Q: A company had credit sales of $500,000 during the third quarter of 2013. It had to write-off $300 of…
A: Bad Debt Expense (% of Sales Method) = Credit Sales x Estimated % Uncollectible
Q: Louise Company has the following balances: Net Credit Sales $ 1,200,000 Accounts…
A: Solution: Bad debt expense for the year is as follows: Beginning balance of Bad debt expense = 3,000…
Q: Assume that Simple Co. had credit sales of $259,000 and cost of goods sold of $159,000 for the…
A: Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to…
Q: Ava Company sets bad debt expense at 2 percent of its sales. Ava reported total sales of $ 60,481.…
A: Solution: Bad debt expense = Total sales *2%
Q: Wellington Corphas outstanding accounts receivable totaling €6.5 million as of December 31 and sales…
A: Account receivable means the amount due from customer whom we sold the goods on credit. Allowance…
Q: Information related to Tesco Company for 2020 is summarized below. Total credit sales $1,200,000…
A: Accounts receivable (AR) is the amount of cash yet to be received by a firm for products or services…
Q: Libre, Incorporated has experienced bad debt losses of 5% of credit sales in prior periods. At the…
A: In percentage of credit sales method Bad debt expense = credit sales × Estimated Nad debt…
Q: Baxter Ltd recorded sales of $480 000 during the year with $350 000 being on credit. Ba debts in the…
A: The bad debt expense is estimated on the basis of past year experiences and sales revenue earned or…
Q: Doer Company reports year-end credit sales in the amount of $390,000 and accounts receivable of…
A: Under the Income Statement method to report bad debt estimation, allowances for bad debts are…
Q: Winstead & Company has accounts receivable of $288,000 and a negative balance of $2,400 in the…
A: Under the aging method, first the post adjustment in allowance for doubtful accounts is computed.…
Q: Aerospace Electronics reports $570,000 in credit sales for 2018 and $634,500 in 2019. They have a…
A: Accounts receivable: It is a current asset of an organization. It is the amount due from customers…
Q: Gilmore Electronics had the following data for a recent year: Cash sales $135,000 Credit sales…
A: Companies offer credit sales in order to increase the sales which in turn increases the net income…
Q: Conner Pride reports year-end credit sales in the amount of $567,000 and accounts receivable of…
A: The balance sheet method of reporting bad expenses is a method under which the amount of…
Q: Assume Simple Company had credit sales of $255,000 and cost of goods sold of $155,000 for the…
A: Allowance for doubtful accounts means where we expect some debts to become bad in near future then…
Q: a. If the balance in accounts receivable at the end of 1991 was $500,000 and $750 million , how long…
A: This can be arrived at by using average collection period (ACP) formula. It measures the average…
Q: eBook Organics Plus is considering which bad debt estimation method works best for its company. It…
A: The allowance for doubtful accounts is established to record the estimated bad debt expenses.
Q: Capetown Company began operations on January 1, 2010. Capetown has found that its estimated bad debt…
A: Bad debts expense = Credit sales x 3% + accounts written off during the year
Q: Walgreens provided the following information before any year end adjusments: Net credit sales are…
A: This question deals with the percentage of sales credit method. In this method, specified percentage…
Q: Flyer Company has provided the following information prior to any year-end bad debt adjustment: Cash…
A: Bad Debt Expense- A bad debt expense is acknowledged when a receivable is no longer collectible for…
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- Conner Pride reports year-end credit sales in the amount of $567,000 and accounts receivable of $134,000. Conner uses the balance sheet method to report bad debt estimation. The estimation percentage is 4.6%. What is the estimated balance uncollectible using the balance sheet method? A. $26,082 B. $6,164 C. $260,820 D. $61,640Doer Company reports year-end credit sales in the amount of $390,000 and accounts receivable of $85,500. Doer uses the income statement method to report bad debt estimation. The estimation percentage is 3.5%. What is the estimated balance uncollectible using the income statement method? A. $13,650 B. $2,992.50 C. $136,500 D. $29,925Historically, Ragman Company has had no significant bad debt experience with its customers. Cash sales have accounted for 20 percent of total sales, and payments for credit sales have been received as follows: 40 percent of credit sales in the month of the sale 35 percent of credit sales in the first subsequent month 20 percent of credit sales in the second subsequent month 5 percent of credit sales in the third subsequent month The forecast for both cash and credit sales is as follows. Required: 1. What is the forecasted cash inflow for Ragman Company for May? 2. Due to deteriorating economic conditions, Ragman Company has now decided that its cash forecast should include a bad debt adjustment of 2 percent of credit sales, beginning with sales for the month of April. Because of this policy change, what will happen to the total expected cash inflow related to sales made in April? (CMA adapted)
- Clovis Enterprises reports $845,500 in credit sales for 2018 and $933,000 in 2019. It has a $758,000 accounts receivable balance at the end of 2018 and $841,000 at the end of 2019. Clovis uses the income statement method to record bad debt estimation at 4% during 2018. To manage earnings more favorably, Clovis changes bad debt estimation to the balance sheet method at 5% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Clovis Enterprises in 2019 as a result of its earnings management.Aerospace Electronics reports $567,000 in credit sales for 2018 and $632,500 in 2019. They have a $499,000 accounts receivable balance at the end of 2018, and $600,000 at the end of 2019. Aerospace uses the income statement method to record bad debt estimation at 5% during 2018. To manage earnings more favorably, Aerospace changes bad debt estimation to the balance sheet method at 7% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Aerospace Electronics in 2019 as a result of its earnings management.Racing Adventures records bad debt using the allowance, income statement method. They recorded $134,560 in accounts receivable for the year and $323,660 in credit sales. The uncollectible percentage is 6.8%. What is the bad debt estimation for the year using the income statement method?
- 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.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.Dortmund Stockyard reports $896,000 in credit sales for 2018 and $802,670 in 2019. It has a $675,000 accounts receivable balance at the end of 2018, and $682,000 at the end of 2019. Dortmund uses the balance sheet method to record bad debt estimation at 8% during 2018. To manage earnings more favorably, Dortmund changes bad debt estimation to the income statement method at 6% during 2019. A. Determine the bad debt estimation for 2018. B. Determine the bad debt estimation for 2019. C. Describe a benefit to Dortmund Stockyard in 2019 as a result of its earnings management.
- A company's management estimates that 2.5% of net credit sales will be uncollectible net credit sales are 115,000 what will the amount of bad debt expense be reported on the income statementGilmore 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 firm's estimated rate for bad debts is 2.85% of credit sales. Conceptual Connection: If Gilmore's estimate of bad debts is correct (2.85% of credit sales) and the gross margin is 20%, by how much did Gilmore's income from operations increase assuming $150,000 of the sales would have been lost if credit sales were not offered?Matu Inc. has the following information during the year: sales 2,000,000sales discounts 30,000Accounts receivable, beginning 250,000collections from all customers 2,100,000allowance for doubtful accounts, beginning 5,000customer accounts written off 2,000 If all sales are credit sales, and privision for bad debts is equal to 2% of net credit sales, compute the following:- Bad debt expense- Net relizable value, ending If 20% of sales are cash sales, and provision for bad debts is equal to 2% of net credit sales, compute the following:- Bad debt expense- Net reliazable value, ending 30% of sales are cash sales, provision for bad debts is equal to 2% of net credit sales, and Php10,000 from collections from customers are recovery of bad debt previously written off, compute the following:- Bad debt expense- Net reliazable value, ending
