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Question
Submitted by neel on Tue, 2013-01-08 17:41
due on Sat, 2013-01-12 17:41
answered 1 time(s)
neel is willing to pay $15.00
neel bought 721 out of 1819 answered question(s)

Allowance method:

  1. Allowance method: Income statement and balance sheet

    approaches. 
    Tempe

    Company reported accounts receivable of $300,000 and an allow­ance for

    uncollectible accounts of $31,000 (credit) on the December 31, 19X2, balance

    sheet. The following data pertain to 19X3 activities and operations:

 

  

 

Sales

  on account



    

 

$2,000,000



    

 

Cash

  collections from credit customers



    

 

1,600,000



    

 

Sales

  discounts



    

 

50,000



    

 

Sales

  returns & allowances



    

 

100,000



    

 

Uncollectible

  accounts written off



    

 

29,000



    

 

Collections

  on accounts that were previously written off



    

 

2,700



 

 

 

Instructions

  1. Prepare journal entries to

    record the sales- and receivables-related trans­actions from 19X3.
  2. Prepare the December 31,

    19X3, adjusting entry for uncollectible ac­counts assuming that uncollectibles

    are estimated to be 2% of net credit sales.
  3. Prepare the December 31,

    19X3, adjusting entry for uncollectible ac­counts assuming that uncollectibles

    are estimated at 1% of year-end accounts receivable.
  4. Compute the amount of the

    adjusting entry in part (c) assuming that $46,000, rather than $29,000, of

    accounts were written off in 19X3.

Answer
Submitted by neel on Tue, 2013-01-08 17:45
teacher rated 549 times
4.118395
price: $15.00

Allowance method

body preview (2 words)

xxxxxxxxx xxxxxx

file1.xlsx preview (248 words)

xxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
1
x
Accounts xxxxxxxxxx xxxxxxx
xx xxxxx 2000000
xxxx1600000
To xxxxxxxx Receivable1600000
xxxxx xxxxxx & Allowancesxxxxxx
xx xxxxxxxx xxxxxxxxxx 100000
Sales Discount50000
To xxxxxxxx Receivablexxxxx
Allowances of xxxxxxxx xxxx 29000
xx Accounts Receivablexxxxx
xxxxxxxx Receivable2700
xx Allowances xx xxxxxxxx Debt xxxx
xxxx2700
To Accounts xxxxxxxxxx2700
b
Credit Sales xxxxxxx
xxxx Sales Discount xxxxx
Less xxxxx Return 100000
Net xxxxxx xxxxx1850000
Allowances of Doubtful xxxx =2% of xxx credit sales
=37000
xxxxxxx xxxxxxxxxx of xxxxxxxx Debt xxxxx
Lessxxx xxxxx xxxxxxx xxx xxxxx
xxx xxx xxxxx recovered 2700
Allowance xxx xxx debt xxxxxxxxxxxx
Closing xxxxxxxxxx xx Doubtful xxxx 37000
Bad Debts Expense32300
To Allowances of xxxxxxxx Debt32300
c
xxxxxxx xxxxxxxxxxxxxxxxx
xxx xxxxxxxxxxx on xxxxxxx of xxxxx during xxxx 2000000
Less Receivables xxxxxxxx xxxxxxxx
xxxx xxxxx xxxxxxxx -50000
Less Sales xxxxxx -100000
Less xxxxxxx Written Off xxxxxx
xxxxxxx Balance521000
Allowances of Doubtful Debt = 1% of Accounts xxxxxxxxxx
x 5210
Opening Allowances xx xxxxxxxx Debtxxxxx
xxxxBad Debts Written xxxxxxxxx
Add Bad Debts xxxxxxxxx2700
xxxx
xxxxxxxxx xxx Bad Debt Required 5210
xxxxxxxxx xxx Bad Debt Balance xxxx
Provision Required for Allowance xxx Bad xxxx xxx
xxx xxxxx Expense xxx
To xxxxxxxxxx of Doubtful Debt xxx
d
Opening xxxxxxxxxxxxxxxxx
Addxxxxxxxxxxx xx xxxxxxx of Sales xxxxxx

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