Patterson Beverage Company and Kapoor Cola Corporation are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Patterson Beverage Company 2017 2018 $36,330 4,170 568 3,618 $ 40,270 4,430 550 3,880 2016 $ 44,880 4,630 540 4,090 Kapoor Cola Corporation 2017 $ 73,600 7,670 130 7,540 2-a. Which of the companies was quicker to convert its receivables Into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables Into cash in 2017? 2018 $ 72,960 7,769 100 7,668 2016 $ 67,330 7,320 140 7,180 Accounts Receivable. Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Required: 1. Calculate the receivables turnover ratios and days to collect for Patterson Beverage Company and Kapoor Cola Corporation for 2018 and 2017

Patterson Beverage Company and Kapoor Cola Corporation are two of the largest and most successful beverage companies in the world in terms of the products that they sell and their receivables management practices. To evaluate their ability to collect on credit sales, consider the following rounded amounts reported in their annual reports (amounts in millions). Fiscal Year Ended: Net Sales Patterson Beverage Company 2017 2018 $36,330 4,170 568 3,618 $ 40,270 4,430 550 3,880 2016 $ 44,880 4,630 540 4,090 Kapoor Cola Corporation 2017 $ 73,600 7,670 130 7,540 2-a. Which of the companies was quicker to convert its receivables Into cash in 2018? 2-b. Which of the companies was quicker to convert its receivables Into cash in 2017? 2018 $ 72,960 7,769 100 7,668 2016 $ 67,330 7,320 140 7,180 Accounts Receivable. Allowance for Doubtful Accounts Accounts Receivable, Net of Allowance Required: 1. Calculate the receivables turnover ratios and days to collect for Patterson Beverage Company and Kapoor Cola Corporation for 2018 and 2017

Name: PA8-5 (Algo) Analyzing Allowance for Doubtful Accounts, Receivables T
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Description: PA8-5 (Algo) Analyzing Allowance for Doubtful Accounts, Receivables Turnover Ratio, and Days toCollect [LO 8-4]Patterson Beverage Company and Kapoor Cola Corporation are two of the largest and most successful beverage companies in theworld in terms

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.
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.
Bristax Corporation recorded $1,385,660 in credit sales for the year, and $732,410 in accounts receivable. The uncollectible percentage is 3.1% for the income statement method and 4.5% 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 $20,550; 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 $17,430; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
CA7-3. (Bad-Debt Reporting Issues) Clark Pierce conducts a wholesale merchandising business that sells approximately 5,000 items per month with a total monthly average sales value of $250,000. Its annual bad debt rate has been approximately 1½% of sales. In recent discussions with his bookkeeper, Mr. Pierce has become confused by all the alternatives apparently available in handling the Allowance for Doubtful Accounts balance. The following information has been presented to Pierce. 1.An allowance can be set up (a) on the basis of a percentage of receivables or (b) on the basis of a valuation of all past due or otherwise questionable accounts receivable. Those considered uncollectible can be charged to such allowance at the close of the accounting period, or specific items can be charged off directly against (1) Gross Sales or to (2) Bad Debt Expense in the year in which they are determined to be uncollectible. 2.Collection agency and legal fees, and so on, incurred in connection with…
E8-3 Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method During the year ended December 31, 2021, Kelly's Camera Shop had sales revenue of $170,000, of which $85,000 was on credit. At the start of 2021, Accounts Receivable showed a $10,000 debit balance and the Allowance for Doubtful Accounts showed a $600 credit balance. Collections of accounts receivable during 2021 amounted to $68,000. Data during 2021 follow: a.On December 10, a customer balance of $1,500 from a prior year was determined to be uncol- , so it was written off. lectible b. December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year. b. On Required: 1. Give the required journal entries for the two events in December. 2.Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2021. 13 On the basis of the data…
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1.) Beltline Co. had credit sales of $100,000 for the year, and based on experience estimates that approximately 1% of these sales will be uncollectible. Under the percent of sales method, a.the adjusting entry to record the uncollectible sales would involve a debit to Allowance for Doubtful Accounts and a credit to Bad Debt Expense. b.the estimated uncollectible sales should not be recorded until there is firm evidence that a customer will not pay. c.the estimated bad debt expense is $1,000. d.the estimated bad debt expense is $10,000. 2.) Under the percentage of receivables method theory, a.the majority of accounts receivable portion will not be collected. b.some portion of the existing accounts receivable will not be collected. c.the percentage of uncollectible accounts is calculated as Average Uncollectible Accounts divided by Average Accounts Receivable. d."some portion of the existing accounts receivable will not be collected" and "the percentage of uncollectible…
The following accounts were found in the ledger of BT21 Company on December 31 of the current year: Dr. Accounts Receivable - P356,800; Cr. Allowance for bad debts - P8,760; Cr. Cash Sales - P913,800; Cr. Credit Sales - P1,851,000. Analysis indicates that 5% of the outstanding accounts receivable will not be collected. How much will be adjustment necessary on December 31 for Allowance for bad debts?
Use the following information to answer Exercises E8-18 and E8-19. January 1, 2018, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following; Sales of $185,000 ($164,000 on account; $21,000 for cash). Ignore Cost of Goods Sold. Collections on account, $135,000. Write-offs of uncollectible receivables, $2,30p. Accounting for uncollectible accounts using the allowance method (percent-of-sales) and reporting receivables on the balance sheet Requirements Journalize Hilltop’s transactions that occurred during 2018. The company uses the allowance method. Post Hilltop’s transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. Journalize Hilltops adjustment to record bad debts expense assuming Hilltop estimates bad debts as 3% of credit sales. Post the adjustment to the appropriate T-accounts. Show how Hilltop Flagpoles will report net accounts receivable…
Use the following information to answer Exercises E8-18 and E8-19. January 1, 2018, Hilltop Flagpoles had Accounts Receivable of $28,000, and Allowance for Bad Debts had a credit balance of $3,000. During the year, Hilltop Flagpoles recorded the following; Sales of $185,000 ($164,000 on account; $21,000 for cash). Ignore Cost of Goods Sold. Collections on account, $135,000. Write-offs of uncollectible receivables, $2,30p. Accounting for uncollectible accounts using the allowance method (percent-of-receivables) and reporting receivables on the balance sheet Requirements Journalize Hilltop’s transactions that occurred during 2018. The company uses the allowance method. Post Hilltop’s transactions to the Accounts Receivable and Allowance for Bad Debts T-accounts. Journalize Hilltop’s adjustment to record bad debts expense assuming Hilltop estimates bad debts as 10% of accounts receivable. Post the adjustment to the appropriate T-accounts. Show how Hilltop Flagpoles will report net…
BEBE Co. has outstanding accounts receivable totaling P2.50 million as of December 31 and sales on credit during the year of P10.8 million. There is also a debit balance of P6,000 in the allowance for doubtful accounts. If the company estimates that 1% of its net credit sales will be uncollectible, what will be the balance in the allowance for doubtful accounts after the year-end adjustment to record bad debt expense?
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