Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For Tammy Company, sales (all on credit) and sales returns and allowances for the month of November 2022 amount to $52,000 and $9,000, respectively.

For Tammy Company, sales (all on credit) and sales returns and allowances for the month of November 2022 amount to $52,000 and $9,000, respectively. The trial balance before adjustments at December 31, 2022, shows the following balances: Accounts receivable Allowance for doubtful accounts Sales (all on credit) Sales returns and allowances Dr. $97,000 3,250 8,700 Cr. 520,000 Required: Using the data above, give the journal entries required to record each of the following (each situation is independent): (a). Tammy Company performs an aging analysis at December 31, 2022, which indicates an uncollectible accounts estimate of $7,000. (c). Under the percentage-of-receivables approach as at December 31, 2022, the company wants to maintain Allowance for Doubtful Accounts at 4% of gross accounts receivable. (d). To obtain additional cash, Tammy Company factors, without recourse, $25,000 of accounts receivable to Laura Finance. The finance charge is 10% of the amount factored (please ignore AFDA and assume no expected uncollectible in the Accounts receivables being transferred.)

Step by Step Solution

3.31 Rating (142 Votes )

There are 3 Steps involved in it

Step: 1

a To record the aging analysis estimate of uncollectible accounts Debit Bad ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting A User Perspective

Authors: Robert E Hoskin, Maureen R Fizzell, Donald C Cherry

6th Canadian Edition

470676604, 978-0470676608

More Books

Students also viewed these Accounting questions

Question

Describe the two perspectives available for measuring liquidity.

Answered: 1 week ago

Question

=+a. Describe, in words, the event A and B.

Answered: 1 week ago

Question

=+b. Describe, in words, the event A or B.

Answered: 1 week ago