1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
dangina [55]
2 years ago
9

During the year ended December 31, 2018, Kelly’s Camera Shop had sales revenue of $180,000, of which $90,000 was on credit. At t

he start of 2018, Accounts Receivable showed a $12,000 debit balance and the Allowance for Doubtful Accounts showed a $620 credit balance. Collections of accounts receivable during 2018 amounted to $70,000.
Data during 2018 follow:

On December 10, a customer balance of $1,600 from a prior year was determined to be uncollectible, so it was written off.
On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.
Required:

Give the required journal entries for the two events in December.

Show how the amounts related to Accounts Receivable and Bad Debt Expense would be reported on the balance sheet and income statement for 2018.

On the basis of the data available, does the 2 percent rate appear to be reasonable?
Business
1 answer:
storchak [24]2 years ago
6 0

Answer:

(a) On December 10, a customer balance of $1,400 from a prior year was determined to be uncollectible

Dr Sales Returns and Allowances $ 1,400  

Cr Accounts Receivable   $ 1,400

(b) On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.

Dr Bad Debt Expense $ 752  

Cr Allowance for Uncollectible Accounts  $ 752

Explanation:

Initial Balance  

Dr Accounts Receivable   $ 12,000

Cr Allowance for Uncollectible Accounts  $ 500

Kelly’s Camera Shop had sales revenue, of which $60,000 was on credit  

Dr Accounts Receivable  $ 60,000  

Cr Sales  $ 60,000

Collections of accounts receivable during 2018 amounted to $58,000.  

Dr Cash $ 58,000  

Cr Accounts Receivable   $ 58,000

(a) On December 10, a customer balance of $1,400 from a prior year was

determined to be uncollectible, so it was written off.  

Dr Allowance for Uncollectible Accounts $ 1,400  

Cr Accounts Receivable   $ 1,400

(b) On December 31, a decision was made to continue the accounting policy of basing estimated bad debt losses on 2 percent of credit sales for the year.  

Dr Bad Debt Expense $ 752  

Cr Allowance for Uncollectible Accounts  $ 752

You might be interested in
What takes place during pre-planning?
Blizzard [7]
During pre-planning, planning is being taken place during this stage in which the planning or brain storming is being done in advance in a form of having to organize the things that a team should do to finish task ahead of time or just right in time.
6 0
2 years ago
An industry consists of three firms with sales of $310,000, $725,000, and $405,000.
Butoxors [25]

Answer:

A. 3,789

B. 100%

C.5,000

Explanation:

(a) Total market ($'000) = 310 + 725 + 405 = 1,440

Firm 1 share = 310 / 1,440 x 100 = 21.53%

Firm 2 share = 725 / 1,440 x 100 = 50.35%

Firm 3 share = 405 / 1,440 x 100 = 28.12%

HHI = (21.53)2 + (50.35)2 + (28.12)2 = 3,789

(b) Since there are only 3 firms in market, therefore the four-firms concentration ratio will be 100% b

(c) Total revenue share of the two firms = (310 + 405) / 1440 x 100 = 49.65%

Post-merger HHI = (49.65)2 + (50.35)2 = 5,000

Yes. If the guideline considers any post-merger HHI above 1800 as highly concentrated market, this merger will be probably attempt to block a horizontal merger between two firms with sales.

7 0
3 years ago
Five years ago, our company purchased land for $53,000. This year, the land is
Alenkinab [10]

Answer:60000

Explanation:

4 0
1 year ago
Managerial accounting information: Select one: a. follows GAAP in the reporting process. b. can be tailored to the needs of the
saveliy_v [14]

Answer:

b. can be tailored to the needs of the internal user.

Explanation:

Managerial accounting information is basically for internal users, and is not aimed to provide information to external users. It aims of future projections.

It need not follow the US GAAP process, as there is no statutory requirement.

Shareholders are considered external for this purpose, as internal ones are, management, employees, labor etc:

Therefore, it does not help shareholders.

It does not report any kind of business results, it only aims to regulate transactions and accordingly planning future goals.

Therefore, correct option is

b. can be tailored to the needs of the internal user.

7 0
2 years ago
Bramble Company typically sells subscriptions on an annual basis, and publishes six times a year. The magazine sells 102000 subs
nirvana33 [79]

The answer is option A. a. Cash 900,000 Unearned

Subscription Revenue 900,000

On the part of the seller, the sale of 60,000

Magazines at $15 constitute liability.

Remember that cash has already been received by the company.

Hence, this amount is yet to be earned by the company that it is considered liability on the part of the seller.

Account  Title                                       Debit          Credit

Cash 60,000 subscriptions * $15   $900,000

Unearned Subscription Revenue                           $900,000

Take note that the unearned subscription revenue is amortized to subscription revenue on a monthly or yearly basis.

Disclaimer:-your question is incomplete, please see below for complete question.

a. Cash 900,000 Unearned

Subscription Revenue 900,000

b. Prepaid Subscriptions 900,000

Cash 900,000 Subscriptions

c. Receivable 150,000

Unearned Subscription Revenue 150,000

d. Subscriptions Receivable 900,000

Subscription Revenue 900,000

Learn more about subscriptions here:-brainly.com/question/15301858

#SPJ4

4 0
1 year ago
Other questions:
  • Money in your emergency fund could be wisely used:
    7·1 answer
  • When a nation is under-allocating resources to the production of a good, then the:_________.
    8·1 answer
  • Tamarisk, Inc. had the following transactions during 2022: 1. Issued $280000 of par value common stock for cash. 2. Recorded and
    9·1 answer
  • Nonverbal communication influences the way a message is received and functions in at least five different ways.
    9·1 answer
  • Malcolm has been researching reports generated by government agencies and the local chamber of commerce. What kind of research i
    8·2 answers
  • 7. You are going to open a business making custom cabinets. You can sell each cabinet for $80. It takes a cabinetmaker approxima
    14·1 answer
  • A company must account for a contract modification as a new contract if Group of answer choices the modification adds distinct g
    6·1 answer
  • Gabriella, a single taxpayer, has wage income of $160,000. In addition, she has $7,000 in long-term capital losses, $1,000 in lo
    6·1 answer
  • Asorting tool is most likely used to
    15·1 answer
  • Strategic management
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!