On October 1 the following trial balance was extracted from Zing Store: Dr Cr Accounts Payables Accounts Receivables Bad Debt expense Capital Cash at bank Discount Allowed 8410 12400 420 168430 4870 510 Discount Received 730 Drawings Electricity charges Furniture and Equipment: 31300 141 040 Cost 20000 Provision for depreciation at 1 October 2018 7260 Insurance 2050 Inventory 1 October 2018 Purchases 11420 131800 Provision for Doubtful Debts 1 October 2018 530 Rent received 4300 Revenue 214900 Shop Premises: Cost 15000 Provision for depreciation 1 October 2018 6000 Wages 39750 410.500 1410 500

On October 1 the following trial balance was extracted from Zing Store: Dr Cr Accounts Payables Accounts Receivables Bad Debt expense Capital Cash at bank Discount Allowed 8410 12400 420 168430 4870 510 Discount Received 730 Drawings Electricity charges Furniture and Equipment: 31300 141 040 Cost 20000 Provision for depreciation at 1 October 2018 7260 Insurance 2050 Inventory 1 October 2018 Purchases 11420 131800 Provision for Doubtful Debts 1 October 2018 530 Rent received 4300 Revenue 214900 Shop Premises: Cost 15000 Provision for depreciation 1 October 2018 6000 Wages 39750 410.500 1410 500

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter7: Receivables And Investments

Section: Chapter Questions

Problem 7.1DC: Reading 3M Companys Balance Sheet: Accounts Receivable The following current asset appears on the...

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Average Uncollectible Account Losses and Bad Debt Expense The accountant for Porile Company prepared the following data for sales and losses from uncollectible accounts: Required: 1. Calculate the average percentage of losses from uncollectible accounts for 2015 through 2018. 2. Assume that the credit sales for 2019 are $1,260,000 and that the weighted average percentage calculated in Requirement 1 is used as an estimate of loses from uncollectible accounts for 2019 credit sales. Determine the bad debt expense for 2019 using the percentage of credit sales method. 3. CONCEPTUAL CONNECTION Do you believe this estimate of bad debt expense is reasonable? 4. CONCEPTUAL CONNECTION How would you estimate 2019 bad debt expense if losses from uncollectible accounts for 2018 were What other action would management consider?
Reading 3M Companys Balance Sheet: Accounts Receivable The following current asset appears on the balance sheet in 3M Companys Form 10-K for the year ended December 31, 2013 (amounts in millions of dollars): Required What is the balance in 3M Companys Allowance for Doubtful Accounts at the end of 2013 and 2012? What is the net realizable value of 3M Companys accounts receivable at the end of each of these two years? What caused increases in the allowance account during 2013? What caused decreases? Explain what a net decrease in the account for the year means.
Hardys Landscape Services total revenue on account for 2018 amounted to 273,205. The company, which uses the allowance method, estimates bad debts at percent of total revenue on account. Required Journalize the following selected entries: 2012 Dec. 12Record services performed on account for E. E. Morton, 245. 31Record the adjusting entry for Bad Debts Expense. 31Record the closing entry for Bad Debts Expense. 2013 Feb. 18Write off the account of E. E. Morton as uncollectible, 245. Check Figure Adjusting entry amount, 1,366.03
Mirror Mart uses the balance sheet aging method to account for uncollectible debt on receivables. The following is the past-due category information for outstanding receivable debt for 2019. To manage earnings more efficiently, Mirror Mart decided to change past-due categories as follows. Complete the following. A. Complete each table by filling in the blanks. B. Determine the difference between total uncollectible. C. Explain how the new total uncollectible amount affects net income and accounts receivable.
Nillsons Nursery uses the direct write-off method for recording bad debts. Required Journalize the following selected entries: 2012 Apr. 10Write off the account of P. A. Seldon as uncollectible, 458. July 27Write off the account of J. M. Weller as uncollectible, 268. Check Figure Total amount debited to Bad Debts Expense 726
Funnel Direct recorded $1,345,780 in credit sales for the year and $695,455 in accounts receivable. The uncollectible percentage is 4.4% for the income statement method and 4% 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 credit balance in Allowance for Doubtful Accounts of $13,888; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Estimating Bad Debts from Receivables Balances The following information is extracted from Shelton Corporations accounting records at the beginning of 2019: During 2019, sales on credit amounted to 575,000, 557,400 was collected on outstanding receivables and 2,600 of receivables were written off as uncollectible. On December 31, 2019, Shell on estimastes its bad debts to be 4% of the outstanding gross accounts receivable balance. Required: 1. Prepare the journal entry necessary to record Sheltons estimate of bad debt expense for 2019. 2. Prepare the Accounts Receivable section of Shelton's December 31, 2019, balance sheet. 3. Compute Shelton's receivables turnover. (Round to one decimal place.) 4. It Sheldon uses IFRS, what might be the heading for the accounts receivable section in Requirement 2?
The trial balance of Fuzzy Security Services Ltd. as of January 1, Year 9, had the following normal balances:Cash$93,380Petty Cash100Accounts receivable21,390Allowance for doubtful accounts2,485Supplies180Prepaid rent3,000Merchandise inventory (23 @ $280)6,440Equipment9,000Van27,000Accumulated depreciation14,900Salaries payable1,500Common stock50,000Retained earnings91,605During Year 9, Fuzzy Security Services experienced the following transactions:1. Paid the salaries payable from Year 8.2. Paid $9,000 on May 2, Year 9, for one year’s office rent in advance.3. Purchased $425 of supplies on account.4. Purchased 145 alarm systems at a cost of $290 each. Paid cash for the purchase.5. After numerous attempts to collect from customers, wrote off $2,060 of uncollectible accounts receivable.6. Sold 130 alarm systems for $580 each plus sales tax of 5 percent. All sales were on account. (Be sure to compute cost of goods sold using the FIFO cost flow method.)7. Billed $107,000 of monitoring…
The trial balance of Pacilio Security Services, Incorporated as of January 1, Year 9, had the following normal balances Cash $ 93,380Petty cash 100Accounts receivable 21,390Allowance for doubtful accounts 2,485Supplies 180Prepaid rent 3,000Merchandise inventory (23 @ $280) 6,440Equipment 9,000Van 27,000Accumulated depreciation 14,900Salaries payable 1,500Common stock 50,000Retained earnings 91,605 During Year 9, Pacilio Security Services experienced the following transactions: Paid the salaries payable from Year 8 Paid $9,000 on May 2, Year 9, for one year’s office rent in advance Purchased $425 of supplies on account Purchased 145 alarm systems at a cost of $290 each. Paid cash for the purchase After numerous attempts to collect from customers, wrote off $2,060 of uncollectible accounts receivable Sold 130 alarm systems for $580 each plus sales tax of 5 percent. All sales were on account Record cost of good sold for the sales transaction…
The following schedule of assets and liabilities relates to Kona Enterprises. Their year-end is 28 February.20222023Income received in advance2 0001 000Input VAT3 0003 500Output VAT6 50011 500Prepaid expenses7 5005 000Accumulated depreciation: Equipment30 00035 000Equipment90 000100 000Fixed deposit (maturing on 31 May 2023)40 00040 000Savings account13 50018 500Bank overdraft04 500Accrued expenses16 00010 500Accrued income9 50012 000Trade receivables34 00041 500Trading inventory105 000115 000Land and Buildings950 000950 000Mortgage loan: Vida Bank450 000380 000Trade payables150 000170 000REQUIRED:Q.4.1Calculate the level of working capital (total current assets) as at the financial years ended 28 February 2022 and 28 February 2023.(8)Q.4.2Calculate the total for current liabilities as at the financial year ending 28 February 2022 and 2023.(6)Q.4.3Calculate the net working capital as at the two dates for statement of financial position, as well as the current ratio for each year.…
On January 1, 2021, the general ledger of Freedom Fireworks includes the following account balances:Accounts Debit CreditCash $ 11,200Accounts Receivable 34,000Allowance for Uncollectible Accounts $ 1,800Inventory 152,000Land 67,300Buildings 120,000Accumulated Depreciation 9,600Accounts Payable 17,700Common Stock 200,000Retained Earnings 155,400Totals $384,500 $384,500During January 2021, the…
Bayley Company has the following trial balance below at December 31, 2020. All accounts have normal balances. Account Balance Cash $460,000 Accounts receivable (net of the Allowance for Doubtful Accounts) 352,000 Inventory at the lower of FIFO cost and net realizable value 451,000 Trading Investments 230,000 Buildings (net of accumulated depreciation) 740,000 Equipment (net of accumulated depreciation) 240,000 Land held for Future Use 305,000 Goodwill 89,000 Notes Receivable (due 2025) 91,000 Prepaid Insurance 16,000 Accounts Payable 345,000 Guaranteed Investment Certificates 50,000 Notes Payable (due in 2021) 235,000 Bonds Payable at net carrying value (due February 1, 2021) 83,000 Rent Payable 55,000 Bonds Payable at net carrying value (due December 31, 2028) 746,000 Common shares, unlimited number of shares authorized 400,000 Contributed surplus 190,000 Retained…