Show all work for Full Credit ! Al the beginning of 2014, Mark\'s sales had the
ID: 2346836 • Letter: S
Question
Show all work for Full Credit !
Al the beginning of 2014, Mark's sales had the following ledger balances During the year there were $450,000 of credit sales, $450,000 of collections, and $3,700 of write-offs. At the end of the year. Mark's adjusted for uncollectible account expense using the percent-of-sales method, and applied a rate, based on past history, of 1.2%. At the end of the year, what was the balance in the Allowance account? $2,300 $2,700 $6,400 $1,700 A company has significant uncollectible receivables. Why is the direct write-off method unacceptable? Direct write-offs would be immaterial. Assets will be understated on the balance sheet. It is not allowed for tax reasons. It violates the matching principle. What is the maturity value of a 3-month, 12% note for $20.000? $20,600 $20,000 $21,200 $22,400Explanation / Answer
1) 45000081.2/100= 5400+1000 (opening balance) =6400 option C. 2) A bad debt is an amount that is written off by the business as a loss to the business and classified as an expense because the debt owed to the business is unable to be collected, and all reasonable efforts have been exhausted to collect the amount owed. This usually occurs when the debtor has declared bankruptcy or the cost of pursuing. 3) 20000*12/100*3/12+ 20000= 20,600 Option A