part 1 and part 2 Required informationP6-4 (Algo) Preparing an Income Statement and Computing the Receivables Turnover Ratio withDiscounts, Returns, and Bad Debts LO6-1, 6-2, 6-3[The following information applies to the questions displayed below.]Tungsten Company, Inc., sells heavy construction equipment. There are 10,000 shares of capital stock outstanding. Theannual fiscal period ends on December 31. The following condensed trial balance was taken from the general ledger onDecember 31, Current Year:CashAccounts receivable (net)Inventory, endingOperational assets.Accumulated depreciationLiabilitiesCapital stockRetained earnings, January 1, current yearSales revenueSales returns and allowancesCost of goods soldSelling expenseAccount TitlesAdministrative expenseBad debt expenseSales discountsIncome tax expenseTotalsP6-4 Part 1TUNGSTEN COMPANY, INC.Income StatementFor the Year Ended December 31, Current YearOperating expenses:Total operating expensesDebit$ 37,20024,30055,60043,600Earnings per share on capital stock outstanding6,50080, 20015,90017,2003,4008,2009,480$ 301,580CreditRequired:1. Beginning with the amount for net sales, pre are an income statement (showing both gross profit and income from operations).(Round "Earnings per share" to 2 decimal places.)$ 20,40027,60075,60012,880165,100$301,580 Required informationP6-4 (Algo) Preparing an Income Statement and Computing the Receivables Turnover Ratio withDiscounts, Returns, and Bad Debts LO6-1, 6-2, 6-3[The following information applies to the questions displayed below.]Tungsten Company, Inc., sells heavy construction equipment. There are 10,000 shares of capital stock outstanding. Theannual fiscal period ends on December 31. The following condensed trial balance was taken from the general ledger onDecember 31, Current Year:CashAccounts receivable (net)Inventory, endingOperational assetsAccumulated depreciationLiabilitiesAccount TitlesCapital stockRetained earnings, January 1, current yearSales revenueSales returns and allowancesCost of goods soldSelling expenseAdministrative expenseBad debt expenseSales discounts.Income tax expenseTotalsP6-4 Part 2NumeratorDenominator$Debit37,20024,30055,60043,6006,50080,20015,90017, 2003,4008,2009,480$ 301,580Receivables Turnover RatioCredit2. The beginning balance in Accounts Receivable (net) was $17,800. Compute the receivables turnover ratio.=$ 20,40027,60075,60012,880165, 100$301,580times

The accounts receivable turnover ratio computes the systematic approach of a company in collecting…

reparing an Income Statement and Computing the Receivables Tur eturns, and Bad Debts LO6-1, 6-2, 6-3 information applies to the questions displayed below.] bany, Inc., sells heavy construction equipment. There are 10,000 shares of capi eriod ends on December 31. The following condensed trial balance was taken Current Year: Account Titles eivable (net) Debit $ 37,200 24,300 Credit

reparing an Income Statement and Computing the Receivables Tur eturns, and Bad Debts LO6-1, 6-2, 6-3 information applies to the questions displayed below.] bany, Inc., sells heavy construction equipment. There are 10,000 shares of capi eriod ends on December 31. The following condensed trial balance was taken Current Year: Account Titles eivable (net) Debit $ 37,200 24,300 Credit

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter5: Sales And Receivables

Section: Chapter Questions

Problem 85APSA: Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto...

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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.
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.
Millennium Associates records bad debt using the allowance, balance sheet method. They recorded $299,420 in accounts receivable for the year, and $773,270 in credit sales. The uncollectible percentage is 3.2%. On November 22, Millennium Associates identifies one uncollectible account from Angels Hardware in the amount of $3,650. On December 18, Angels Hardware unexpectedly pays its account in full. Record journal entries for the following. A. Year-end adjusting entry for 2017 bad debt B. November 22, 2018 identification entry C. Entry for payment on December 18, 2018
Ink Records recorded $2,333,898 in credit sales for the year and $1,466,990 in accounts receivable. The uncollectible percentage is 3% for the income statement method and 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 credit balance in Allowance for Doubtful Accounts of $20,254; record the year-end entry for bad debt using the income statement method, and then the entry using the balance sheet method.
Millennium Associates records bad debt using the allowance, income statement method. They recorded $299,420 in accounts receivable for the year, and $773,270 in credit sales. The uncollectible percentage is 3.2%. On February 5, Millennium Associates identifies one uncollectible account from Molar Corp in the amount of $1,330. On April 15, Molar Corp unexpectedly pays its account in full. Record journal entries for the following. A. Year-end adjusting entry for 2017 bad debt B. February 5, 2018 identification entry C. Entry for payment on April 15, 2018
Entries for bad debt expense under the direct write-off and allowance methods The following selected transactions were taken from the records of Rustic Tables Company for the year ending December 31: A. Journalize the transactions under the direct write-off method. B. Journalize the transactions under the allowance method, assuming that the allowance account had a beginning balance of 36,000 at the beginning of the year and the company uses the analysis of receivables method. Rustic Tables Company prepared the following aging schedule for its accounts receivable: C. How much higher (lower) would Rustic Tables net income have been under the direct write-off method than under the allowance method?
Unusual income statement items Assume that the amount of each of the following items is material to the financial statements. Classify each item as either normally recurring (NR) or unusual (U) items. If unusual item, then specify if it is a discontinued operations item (DO). a. Interest revenue on notes receivable. b. Gain on sale of segment of the company's operations that manufactures bottling equipment. c.Loss on sale of investments in stocks and bonds. d. Uncollectible accounts expense. e. Uninsured flood loss. (Hood insurance is unavailable because of periodic Hooding in the area.)
Michelle Company reports $345,000 in credit sales and $267,500 in accounts receivable at the end of 2019. Michelle currently uses the income statement method to record bad debt estimation at 4%. To manage earnings more efficiently, Michelle changes bed debt estimation to the balance sheet method at 4%. How much is the difference in net income between the income statement and balance sheet methods? A. $3,100 B. $13,800 C. $10,700 D. $77,500
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.
Determining Bad Debt Expense Using the Aging Method At the beginning of the year, Tennyson Auto Parts had an accounts receivable balance of $31,800 and a balance in the allowance for doubtful accounts of $2,980 (credit). During the year, Tennyson had credit sales of $624,300, collected accounts receivable in the amount of $602,700, wrote off $18,600 of accounts receivable, and had the following data for accounts receivable at the end of the period: Required: 1. Determine the desired post adjustment balance in allowance for doubtful accounts. 2. Determine the balance in allowance for doubtful accounts before the bad debt expense adjusting entry is posted. 3. Compute bad debt expense. 4. Prepare the adjusting entry to record bad debt expense.
Doer 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. $29,925
Twenty metrics of liquidity, solvency, and profitability The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8 Instructions Accounts receivable turnover