Calculate the amount of bad debt expense that will appear in the company's 2021 income statement? Oman Company reported the following racalyables in Its December 31, 2020, year-end balancesheet:Current assets:Accounts receivable, net of $57,000 in allowance foruncollectible accounts$ 389,000Interest receivable22,200Notes receivable470,000Additional information:• The notes receivable account consists of two notes, a $120,000 note, anda $350,000 note.The $120,000 note is dated October 31, 2020, with principal and interest payable on October31, 2021. The $350,000 note is dated March 31, 2020, with principal and 8% interest payableon March 31, 2021.• During 2021, sales revenue totalled $2,170,000, $2,030,000 cash was collected fromcustomers, and $46,000 in accounts receivable were written off. All sales are made on a creditbasis. Bad debt expense is recorded at year-end by adjusting the allowance account to anamount equal to 10% of year-end gross accounts receivable.

A bad debt expense is recognized when a receivable is not any longer collectible because a customer…

Oman Company reported the following racalvables in Its December 31, 2020, year- sheet: Current assets: Accounts receivable, net of $57,000 in allowance for uncollectible accounts $ 389,000 Interest receivable 22,200 INotes receivable 470,000 Additional information: The notes receivable account consists of two notes, a $120,000 note, and a $350 The $120,000 note is dated October 31, 2020, with principal and interest payable o 31, 2021. The $350,000 note is dated March 31, 2020, with principal and 8% interes on March 31, 2021. During 2021, sales revenue totalled $2,170,000, $2,030,000 cash was collected f customers, and $46,000 in accounts receivable were written off. All sales are made pense is recorded at vear-end by adiusting the allowance account Baddebt

Oman Company reported the following racalvables in Its December 31, 2020, year- sheet: Current assets: Accounts receivable, net of $57,000 in allowance for uncollectible accounts $ 389,000 Interest receivable 22,200 INotes receivable 470,000 Additional information: The notes receivable account consists of two notes, a $120,000 note, and a $350 The $120,000 note is dated October 31, 2020, with principal and interest payable o 31, 2021. The $350,000 note is dated March 31, 2020, with principal and 8% interes on March 31, 2021. During 2021, sales revenue totalled $2,170,000, $2,030,000 cash was collected f customers, and $46,000 in accounts receivable were written off. All sales are made pense is recorded at vear-end by adiusting the allowance account Baddebt

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 22MC: A company collects an honored note with a maturity date of 24 months from establishment, a 10%...

See similar textbooks

Similar questions

A company collects an honored note with a maturity date of 24 months from establishment, a 10% interest rate, and an initial loan amount of $30,000. Which accounts are used to record collection of the honored note at maturity date? A. Interest Revenue, Interest Expense, Cash B. Interest Receivable, Cash, Notes Receivable C. Interest Revenue, Interest Receivable, Cash, Notes Receivable D. Notes Receivable, Interest Revenue, Cash, Interest Expense
Prior to adjustments, Barrett Companys account balances at December 31, 2019, for Accounts Receivable and the related Allowance for Doubtful Accounts were 1,200,000 and 60,000, respectively. An aging of accounts receivable indicated that 106,000 of the December 31, 2019, receivables may be uncollectible. The net realizable value of accounts receivable at December 31, 2019, was: a. 1,034,000 b. 1,094,000 c. 1,140,000 d. 1,154,000
Comprehensive Receivables Problem Blackmon Corporations December 31, 2018, balance sheet disclosed the following information relating to its receivables: The company has a recourse liability of 700 related to a note receivable sold to a bank. During 2019, credit sales (terms, n/EOM) totaled 2,200,000, and collections on accounts receivable (unassigned) amounted to 1,900,000. Uncollectible accounts totaling 18,000 from several customers were written off, and a 1,350 accounts receivable previously written off was collected. Additionally, the following transactions relating to Blackmons receivables occurred during the year: On December 31, 2019, an aging of the accounts receivable balance indicated the following: Required: 1. Prepare the journal entries to record the preceding receivable transactions during 2019 and the necessary adjusting entry on December 31, 2019. Assume a 360-day year for interest calculations and round calculations to the nearest dollar. 2. Prepare the receivables portion of Blackmons December 31, 2019, balance sheet. 3. Next Level Compute Blackmons accounts receivable turnover in days, assuming a 360-day business year. What is your evaluation of its collection policies? 4. If Blackmon uses IFRS, what might be the heading of the section for the receivables reported in Requirement 2?
On June 1, Phillips Corporation sold, with recourse, a note receivable from a customer to a bank. The note has a face value of 15,000 and a maturity value (principal plus interest) of 15,400. The discount is calculated to be 385, and the accrued interest income is 100. The recourse liability is estimated to be 1,000. Prepare the journal entry of Phillips to record the sale of the note receivable.
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.
Berry Farms has an accounts receivable balance at the end of 2018 of $425,650. The net credit sales for the year are $924,123. The balance at the end of 2017 was $378,550. What is the number of days sales in receivables ratio for 2018 (round all answers to two decimal places)?
On December 1 of the current year, Jordan Inc. assigns 125,000 of its accounts receivable to McLaughlin Company for cash. McLaughlin Company charges a 750 service fee, advances 85% of Jordans accounts receivable, and charges an annual interest rate of 9% on any outstanding loan balance. Prepare the related journal entries for Jordan. Refer to RE6-10. On December 31, Jordan Inc. received 50,000 on assigned accounts. Prepare Jordans journal entries to record the cash receipt and the payment to McLaughlin.
Non-Interest-Bearing Notes Payable On November 16, 2019, Clear Glass Company borrowed 20,000 from First American Bank by issuing a 90-day, non-interest-bearing note. The bank discounted this note at 12% and remitted the difference to Clear Glass. Required: 1. Prepare the journal entries of Clear Glass to record the preceding information, the related calendar year-end adjusting entry, and payment of the note at maturity. 2. Show how the preceding items Would be reported on the December 31, 2019, balance sheet. 3. Next Level What is Clear Glass Companys effective interest rate?