CHAPTER7 (Be sure to present and label all calculations clearly!) 1) Liv ingston
ID: 2583558 • Letter: C
Question
CHAPTER7 (Be sure to present and label all calculations clearly!) 1) Liv ingston Co. estimates uncollectible accounts based on 4% of net credit sales during the company's fiscal year. Information available for the current year is provided below. Allowance for uncollectible accounts, 1/1 $ 108,000 Collection from customers whose accounts were Customer accounts written off as uncollectible Credit sales during the current year previously written off 12,000 during the current year 117,000 3,100,000 28,000 Sales returns and allowances during the current year REQUIRED: Determine the balance in the Allowance for Uncollectible Accounts at December 31st of the current year 2) The Montague Company lists the following accounts on its year-end trial balance: Debit 230,000 Accounts receivable Allowance for uncollectible accounts Sales Sales returns and allowances 1,400 860,000 34,000 The allowance for uncollectible accounts is estimated, at year end, at 4 accounts receivable % of outstanding (a) Determine the bad debt expense reported on the year-end income statement. REQUIRED: ccounts at se reported on the year-end income Assume the Montague Company estimates its uncollectible a REQUIRED: 2% of net sales. Determine the bad debt expen statement. (b)Explanation / Answer
Ans:
1.
Net Credit Sale=$310000-$28000
= $3072000
Balance in Allowance for Uncollectible Accounts:4% of $3072000=$122880