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Naily [24]
3 years ago
15

Compute the uncollectible account expense, and make the appropriate journal entry, for the current year assuming the uncollectib

le account expense is determined as follows:
a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sales.
b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales.
c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach.
The estimate based on an aging of accounts receivable is that an allowance of $12,000 would be appropriate.
Business
1 answer:
Gnoma [55]3 years ago
4 0

Question Completion:

Johnson Corporation’s Unadjusted Trial Balance at year-end included the following accounts:

Debit Credit

Sales (75% represent credit sales) (credit) $1,152.000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

Answer:

<h2>Johnson Corporation</h2>

a. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1% of total sale:

Journal Entry:

Debit Uncollectible Accounts Expense $11,520

Credit Allowance for Doubtful Accounts $11,520

To record the uncollectible accounts expense for the year.

b. Without considering the balance in the Allowance for Doubtful Accounts, income statement approach, 1.5% of credit sales:

Journal Entry:

Debit Uncollectible Accounts Expense $12,960

Credit Allowance for Doubtful Accounts $12,960

To record the uncollectible accounts expense for the year.

c. Considering the balance in the Allowance for Doubtful Accounts, balance sheet approach

Journal Entry:

Debit Uncollectible Accounts Expense $9,816

Credit Allowance for Doubtful Accounts $9,816

To record the uncollectible accounts expense for the year.

Explanation:

a) Data and Determination of Uncollectible Expenses and Allowances:

Sales (75% represent credit sales) (credit) $1,152,000

Accounts Receivable(debit) $288,000

Allowance for Doubtful Accounts (credit) $2,184

1. Uncollectible Accounts Expense = 1% of Sales:

= 1% of $1,152,000

= $11,520

2. Uncollectible Accounts Expense = 1.5% of Credit Sales:

= 1.5% of $864,000 (75% of $1,152.000 )

= $12,960

3. Allowance for Doubtful Accounts based on an aging of accounts receivable of $12,000:

Adjustment required to bring the Allowance for Doubtful Accounts to $12,000 is $9,816 ($12,000 - 2,184).

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2 years ago
A machine purchased three years ago for $720,000 has a current book value using straight-line depreciation of $400,000: its oper
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Answer:

total cost of old machine $690000 and purchase new machine $584000

replace old machine with new

so cost saving $106000

Explanation:

given data

current book value = $720,000

depreciation = $400,000

operating expenses = $60,000

replacement machine cost = $480,000

operating expenses = $26,000

expected salvage value = $130,000

current disposal value= $170,000

residual value = $20,000

to find out

total costs  and Should the old machine be replaced

solution

we find here total cost of old machine and new machine that is

particular                                   old machine                         new machine

original cost is                           $720000                             $480000

current value is                          $400000                              

now disposal val                        $170000                              

9 year disposal value                $20000                               $130000

annual opening cost                  $60000                               $26000

total cost                                    $690000                             $584000

so

total cost of old machine $690000 and purchase new machine $584000

so it should be recommend here for replace old machine with new

so cost saving $106000

4 0
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