19. Lail Inc accounts for bad debts using the allowance method. On June 1, Lail Inc...
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19. Lail Inc accounts for bad debts using the allowance method. On June 1, Lail Inc wrote off Andrew Green's $2,500 account. Based on Lail's estimation, Mr. Green will never pay any portion of the balance in his account. What effect will this write-off have on Lail Inc's balance sheet at the time of the write-off? a. an increase to expense and a decrease to liabilities b. no effect assuming that the allowance account was at least $2,500. c. an increase to assets and an increase to expense d. a decrease to assets and a decrease to owners' equity 20. Sandburg Veterinarian reports the following information for the year: Net credit sales Average A/R $120,000 20,000 Cash Collections on credit sales 100,000 Calculate Sandburg's receivables turnover ratio and average collection period. 21. On September 1, 2016, Middleton Corp loans cash and accepts a $6,000 note receivable that has a 8% annual interest rate and is due in nine months. Record the year-end adjusting entry to accrue interest for 2016. 22. On December 31, 2015, Smith Jones has an A/R balance of $80,000 (debit) and Allowance or uncollectible Accounts $1,100 (credit). The company estimates uncollectible accounts based on an aging of A/R as shown below: Amt Receivable Estimated % Uncollectible Not yet due 0-30 days past due 31-90 days past due More than 90 days past due Total $48,000 18,000 10,000 4,000 $80,000 5% 15% 40% 80% alculate the total Allowance amount and make the appropriate entry taking into account the rrent balance in the Allowance account. 19. Lail Inc accounts for bad debts using the allowance method. On June 1, Lail Inc wrote off Andrew Green's $2,500 account. Based on Lail's estimation, Mr. Green will never pay any portion of the balance in his account. What effect will this write-off have on Lail Inc's balance sheet at the time of the write-off? a. an increase to expense and a decrease to liabilities b. no effect assuming that the allowance account was at least $2,500. c. an increase to assets and an increase to expense d. a decrease to assets and a decrease to owners' equity 20. Sandburg Veterinarian reports the following information for the year: Net credit sales Average A/R $120,000 20,000 Cash Collections on credit sales 100,000 Calculate Sandburg's receivables turnover ratio and average collection period. 21. On September 1, 2016, Middleton Corp loans cash and accepts a $6,000 note receivable that has a 8% annual interest rate and is due in nine months. Record the year-end adjusting entry to accrue interest for 2016. 22. On December 31, 2015, Smith Jones has an A/R balance of $80,000 (debit) and Allowance or uncollectible Accounts $1,100 (credit). The company estimates uncollectible accounts based on an aging of A/R as shown below: Amt Receivable Estimated % Uncollectible Not yet due 0-30 days past due 31-90 days past due More than 90 days past due Total $48,000 18,000 10,000 4,000 $80,000 5% 15% 40% 80% alculate the total Allowance amount and make the appropriate entry taking into account the rrent balance in the Allowance account.
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19 The following entry is passed at the time of writeoff allowance for dou... View the full answer
Related Book For
Financial Accounting Tools for Business Decision Making
ISBN: 978-0470239803
5th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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