Financial Accounting-w/cd-package
3rd Edition
ISBN: 9780131060876
Author: REIMERS
Publisher: PEARSON
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Chapter 11, Problem 17E
Chip Company is making estimates of had debts and warranties at year end, December 31, 2009. The firm believes that it will have declining revenue in 2010, so the
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Capetown Company began operations on January 1, 2010.
Capetown has found that its estimated bad debt expense has been
consistently higher than actual bad debts. Management proposes
lowering the percentage from 3% of credit sales to 2%. Credit sales
for 2011 totaled P5,000,000, and accounts written off as
uncollectible during 2011 totaled P550,000. What is the bad debt
expense for 2011?
You are the accountant for Black Cat Ltd. (BCL) and you have just finished the aging analysis of accounts receivable. You have estimated that $5,000 of the current $98,000 of A/R will be uncollectible. The allowance for doubtful accounts had a $400 credit balance at year-end before adjustment. What amount of bad debts would you expect to see on BCL's income statement for the year?
a.
$0
b.
$4,600
c.
$5,000
d.
$5,400
Use the following information to answer the next two questions:
Lewis Company uses the allowance method for recording its expected credit losses. It estimates bad debts at 2% of credit sales, which were $900,000 during the year.
On December 31, the Accounts Receivable balance was $150,000, and the Allowance for Doubtful Accounts had a balance of $12,200 before adjustments.
What is the amount of bad debt expense Lewis Company will report on their Income Statement this year?
Select one:
a. 17,756
b. 3,000
c. 12,200
d. 18,000
e. 2,756
Chapter 11 Solutions
Financial Accounting-w/cd-package
Ch. 11 - Describe why earnings is such an important number.Ch. 11 - Prob. 2YTCh. 11 - Prob. 3YTCh. 11 - Prob. 4YTCh. 11 - Prob. 5YTCh. 11 - Prob. 1QCh. 11 - Prob. 2QCh. 11 - Prob. 3QCh. 11 - Prob. 4QCh. 11 - Prob. 5Q
Ch. 11 - Prob. 6QCh. 11 - Prob. 7QCh. 11 - Prob. 8QCh. 11 - Prob. 9QCh. 11 - Prob. 10QCh. 11 - Prob. 11QCh. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - Prob. 5MCQCh. 11 - Prob. 1SECh. 11 - How do you think analysts evaluate the quality of...Ch. 11 - Prob. 3SECh. 11 - Prob. 4SECh. 11 - Prob. 5SECh. 11 - Prob. 6SECh. 11 - Prob. 7SECh. 11 - Prob. 8SECh. 11 - Prob. 9SECh. 11 - Prob. 10SECh. 11 - Prob. 11SECh. 11 - How does U.S. GAAP differ from IFRS in the way...Ch. 11 - Prob. 13SECh. 11 - Prob. 14ECh. 11 - Loder Company had a good year, and recorded a...Ch. 11 - Mismatch Company had a terrible year and will...Ch. 11 - Chip Company is making estimates of had debts and...Ch. 11 - Prob. 1IECh. 11 - Prob. 2IECh. 11 - Prob. 3IE
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