The credit manager of Montour Fuel has gathered the following information about the company's accounts receivable and credit losses during the current year: $ 8,000,000 1,750,000 Net credit sales for the year Accounts receivable at year-end Uncollectible accounts receivable: Actually written off during the year Estimated portion of year-end receivables expected to prove uncollectible (per aging schedule) $ 96,000 84,000 180,000 a. Uncollectible accounts expense is estimated at an amount equal to 2.5 percent of net credit sales. b. Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was $25,000. (Consider the effect of the write-offs during the year on the balance in the Allowance for Doubtful Accounts.) c. The company uses the direct write-off method of accounting for uncollectible accounts.

The credit manager of Montour Fuel has gathered the following information about the company's accounts receivable and credit losses during the current year: $ 8,000,000 1,750,000 Net credit sales for the year Accounts receivable at year-end Uncollectible accounts receivable: Actually written off during the year Estimated portion of year-end receivables expected to prove uncollectible (per aging schedule) $ 96,000 84,000 180,000 a. Uncollectible accounts expense is estimated at an amount equal to 2.5 percent of net credit sales. b. Uncollectible accounts expense is recognized by adjusting the balance in the Allowance for Doubtful Accounts to the amount indicated in the year-end aging schedule. The balance in the allowance account at the beginning of the current year was $25,000. (Consider the effect of the write-offs during the year on the balance in the Allowance for Doubtful Accounts.) c. The company uses the direct write-off method of accounting for uncollectible accounts.

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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Last year, Nikkola Company had net sales of 2.299.500,000 and cost of goods sold of 1,755,000,000. Nikkola had the following balances: Refer to the information for Nikkola Company above. Required: Note: Round answers to one decimal place. 1. Calculate the average accounts receivable. 2. Calculate the accounts receivable turnover ratio. 3. Calculate the accounts receivable turnover in days.
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.
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