Quickbooks Online Accounting
3rd Edition
ISBN: 9780357391693
Author: Owen
Publisher: Cengage
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Here is a bill from a credit card company that a credit card user received:
May 1: Unpaid Balance = P42,500.75; May 10: Payment Received = P2,125.00; May 15: Purchases = P1,450. Compute the total amount due at the end the billing period which is May 25.
Required:
Assume credit sales for 2019 were $312,000 and that on December 31, 10% of credit sales are estimated to be uncollectible. Using the percentage of sales method:Determine the amount to be charged to the uncollectible expense account.Prepare the Allowance for uncollectible account.
Prepare the balance sheet extract to show the net realizable value of the Accounts Receivable as at December 31
Journal Entries
Date
Particulars
Debit($)
Credit($)
10.1.20
Accounts Receivable
11000
To sales
11000
15.5.20
Allowance for uncollectible accounts(2500+400)
2900
To accounts receivable
2900
4.8.20
Cash(70% of 11000)
7700
Allowance for uncollectible accounts(30% of $11000)
3300
To Accounts Receivable
1100
26.10.20
Accounts Receivable(30% of $400)
120
To allowance for uncollectible accounts
120
26.10.20
Cash
120
To accounts receivable
120…
The VISA CREDIT CARD charges 3% interest per month on the unpaid balance for purchases made on this card. Compute the effective rate of interest.
a.
0.4258
b.
0.3904
c.
0.4049
d.
0.384
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