Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment. Accounts receivable $10,800,000 Estimated percentage uncollectible 2% Allowance for uncollectible accounts $108,000 (credit) Operating income $2,800,000 Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,120,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job. Required: 1. Record the adjustment for uncollectible accounts using the accountant’s estimate of 2% of accounts receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the adjusting entry for Uncollectible Accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit 1
Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment. Accounts receivable $10,800,000 Estimated percentage uncollectible 2% Allowance for uncollectible accounts $108,000 (credit) Operating income $2,800,000 Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,120,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job. Required: 1. Record the adjustment for uncollectible accounts using the accountant’s estimate of 2% of accounts receivable. (If no entry is required for a particular transaction/event, select "No Journal Entry Required" in the first account field.) Journal entry worksheet Record the adjusting entry for Uncollectible Accounts. Note: Enter debits before credits. Transaction General Journal Debit Credit 1
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter2: Analyzing Transactions
Section: Chapter Questions
Problem 24E
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Wanda B. Rich is the CEO of Outlet Flooring, a discount provider of carpet, tile, wood, and laminate flooring. At the end of the year, the company’s accountant provides Wanda with the following information, before any adjustment.
| Accounts receivable | $10,800,000 |
| Estimated percentage uncollectible | 2% |
| Allowance for uncollectible accounts | $108,000 (credit) |
| Operating income | $2,800,000 |
Wanda has significant stock ownership in the company and, therefore, would like to keep the stock price high. Analysts on Wall Street expect the company to have operating income of $2,120,000. The fact that actual operating income is well above this amount will make investors happy and help maintain a high stock price. Meeting analysts’ expectations will also help Wanda keep her job.
Required:
1. Record the adjustment for uncollectible accounts using the accountant’s estimate of 2% of accounts receivable. (If no entry is required for a particular transaction/event, select "No
Journal entry worksheet
- Record the
adjusting entry for Uncollectible Accounts.
Note: Enter debits before credits.
|
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