Pharoah Co. manufactures and sells plumbing fixtures for homes & businesses. All its sales are made on credit to wholesale distributors. Information for Pharoah Co. for the current year is as follows: Total credit sales Accounts receivable at December 31 (a) Assume that Pharoah Co. estimates its credit losses based on an aging analysis of its year-end accounts receivable, which indicates that a provision for uncollectible accounts of $40,000 is required: If there is a debit balance of $5,700 in its allowance for expected credit losses on December 31, before adjustment, i. What amount will the company report on its income statement as credit losses? Credit losses S $970,000 $460,000 ii. What amount will it report on its balance sheet as the carrying amount of its accounts receivable? Net accounts receivable S

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Chapter16: Accounting For Accounts Receivable
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Pharoah Co. manufactures and sells plumbing fixtures for homes & businesses. All its sales are made on credit to wholesale
distributors.
Information for Pharoah Co. for the current year is as follows:
Total credit sales
Accounts receivable at December 31
(a)
Assume that Pharoah Co. estimates its credit losses based on an aging analysis of its year-end accounts receivable, which
indicates that a provision for uncollectible accounts of $40,000 is required:
If there is a debit balance of $5,700 in its allowance for expected credit losses on December 31, before adjustment,
i. What amount will the company report on its income statement as credit losses?
Credit losses
S
$970,000
$460,000
ii. What amount will it report on its balance sheet as the carrying amount of its accounts receivable?
Net accounts receivable S
Transcribed Image Text:Pharoah Co. manufactures and sells plumbing fixtures for homes & businesses. All its sales are made on credit to wholesale distributors. Information for Pharoah Co. for the current year is as follows: Total credit sales Accounts receivable at December 31 (a) Assume that Pharoah Co. estimates its credit losses based on an aging analysis of its year-end accounts receivable, which indicates that a provision for uncollectible accounts of $40,000 is required: If there is a debit balance of $5,700 in its allowance for expected credit losses on December 31, before adjustment, i. What amount will the company report on its income statement as credit losses? Credit losses S $970,000 $460,000 ii. What amount will it report on its balance sheet as the carrying amount of its accounts receivable? Net accounts receivable S
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