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
AnnyKZ [126]
2 years ago
6

The income statement approach to estimating uncollectible accounts expense is used by Kerley Company. On February 28, the firm h

ad accounts receivable in the amount of $437,000 and Allowance for Doubtful Accounts had a credit balance of $2,140 before adjustment. Net credit sales for February amounted to $3,000,000. The credit manager estimated that uncollectible accounts expense would amount to 1% of net credit sales made during February. On March 10, an accounts receivable from Kathy Black for $6,100 was determined to be uncollectible and written off. However, on March 31, Black received an inheritance and immediately paid her past due account in full.Prepare the journal entries made by Hayes Company on the below dates: (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)1. Feb 282. March 103. March 31
Business
1 answer:
erik [133]2 years ago
8 0

Answer:

Feb 28.

  • Uncollectible accounts expense would amount to 1% of net credit sales made during February.  

Dr Bad Debt Expense $ 27,860

Cr Allowance for Uncollectible Accounts $ 27,860

  • On March 10, an accounts receivable from Kathy Black for $6,100 was determined to be uncollectible and written off.  

Dr Allowance for Uncollectible Accounts $ 6,100

Cr Accounts receivable $ 6,100

  • March 31, Black received an inheritance and immediately paid her past due account in full.  

Dr Accounts receivable $ 6,100

Cr Allowance for Uncollectible Accounts $ 6,100

 

Dr CASH $ 6,100

Cr Accounts receivable $ 6,100

Explanation:

February 28  

Dr Accounts receivable $ 437.000

Cr Allowance for Uncollectible Accounts $ 2.140

Net Credit Sales February $ 3.000.000

 

Uncollectible accounts expense would amount to 1% of net credit sales made during February.  

Dr Bad Debt Expense $ 27.860

Cr Allowance for Uncollectible Accounts $ 27.860

On March 10, an accounts receivable from Kathy Black for $6,100 was determined to be uncollectible and written off.  

Dr Allowance for Uncollectible Accounts $ 6.100

Cr Accounts receivable $ 6.100

March 31, Black received an inheritance and immediately paid her past due account in full.  

Dr Accounts receivable $ 6.100

Cr Allowance for Uncollectible Accounts $ 6.100

 

Dr CASH $ 6.100

Cr Accounts receivable $ 6.100

 

If the company applies the allowance method, it means that the account Allowance for Uncollectible Accounts must show as balance the % estimated of accounts receivables as CREDIT.  

 

Bad accounts are those credits granted by the company and there is no possibility of being charged.  

"When customers buy products on credits but the company cannot collect the debt, then it's necessary

to cancel the unpaid invoice as uncollectible."  

One way is to directly cancel bad debts at the time it was decided that the credit is bad, the total amount reported as bad debt expenses negatively affect the income statement and the accounts receivable are reduced by the same amount, less assets  

 

The other way is to determine a percentage of the total amount of accounts receivable as bad debts, there are many ways to analyze accounts receivable and calculate the value of bad debts.  

When the company has the percentage of uncollectible accounts, the required journal entry is Bad Expenses (debit) with Reserve for Bad Accounts (credit)  

At the time of cancellation, since the expenses were recognized before, we only use the Allowance for Uncollectible Accounts (Debit)  with accounts receivable (credit), with this we are recognizing the bad credit of the company.  

You might be interested in
An example of business-to-business sales is selling ________.
uysha [10]

Answer:

a) grocery items to grocery stores

Explanation:

Business -to -business (B2B) sales occur between different companies unlike Business to Consumer (B2C) sales that are between a company and a individual customers.  To answer this question, you identify an option that shows that a wholesaler sells goods to a retailer who then sells to a customer which is supply of grocery items to grocery stores.

'Automobile insurance to a pet shop owner' and 'evening gowns to Oscar award nominees' are B2C. And 'a washing machine to a theatre company' is irrelevant

5 0
3 years ago
Which of the following elements of a process most directly impacts or affects process capabilities? Multiple Choice Activities I
Charra [1.4K]

Answer:

The correct answer is letter "C": Process Structure.

Explanation:

The process capabilities are directly affected by the Process Structure. The Process Structure includes the infrastructure a company counts on for handling businesses. Facilities, equipment, and locations determine how the business will be handled and at what scale.

8 0
3 years ago
The benefits of a strategic business plan do not include _____.:
djyliett [7]

Answer:

Early precautionary measures of trouble ahead can not be issued.

Explanation:

Since a strategic strategy maps out a path for the organisation to follow, it will enable it tighten its attention in order to get somewhere. Therefore, strategic preparation will help the organisation create the best priorities and strategies and help others concentrate their energies on achieving them.

8 0
3 years ago
A title clause in a contract provides exactly what type of title the buyer is expecting to receive from the seller: Group of ans
damaskus [11]

Answer:

True

Explanation:

A retention of title clause within a contract of sale essentially means that ownership remains with the supplier, until full payment for the goods has been received. That is the seller of a particular product still holds full custody of his goods until the buyer fully pays for the goods.

3 0
3 years ago
George is looking at the colors on a paint swatch card to select the right shade of red for his wall. he is able to differentiat
bulgar [2K]

Based on his perception of the differences in the shades, this can be attributed to the wavelengths of light reflecting from the shades. Wavelength in physics is being defined as measuring the direction in regards of the propagation of a wave in which are in between a two successive points in the wave that are being characterized by its same phase.

4 0
3 years ago
Other questions:
  • A 3-year insurance policy costing $1,164 is taken out november 1, 1995. the property was sold on may 15, 1996, and the day of cl
    6·1 answer
  • Poppy co. uses a periodic inventory system. beginning inventory on january 1 was understated by
    15·1 answer
  • Which statement best describes the trait of being tactful? A. ability to be humble in every situation B. ability to remain stres
    8·2 answers
  • The name given to the fraction of deposits that a bank is legally required to hold in its vault, or as deposits at the fed, is _
    6·1 answer
  • Convention hotels provide meeting rooms and banquet hotels to convention participants. Sometimes a specific convention may invol
    11·1 answer
  • During the month of February, Smiling Moon Inc. had cash receipts of $10,000 and cash disbursements of $7,700. The February 28 c
    7·1 answer
  • In a particular country in 1998, the average worker needed to work 25 hours to produce 40 units of output. In that same country
    8·1 answer
  • How successful is ABC Company relative to the industry average and leaders in the small specialty retail store industry? Write t
    10·1 answer
  • C = prn is formula for ca
    14·1 answer
  • If Tarek and Samantha do not write wills and one or both were to pass away, how will the distribution of their assets be decided
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!