Company B uses the Analysis of Receivables method. However, Management has asked us to take a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Company B uses the Analysis of Receivables method. However, Management has asked us to take a look at the Income Statement Impact if we change the Uncollectible Percentages for Each Budget of Aging. The aging schedule looks like the following: Customer Total Due Current 1-60 Past Due 61+ Past Due A B с D E Total: Aging Category Current (Not past due) 1-60 past due 61+ days past due 1,000 1,500 800 2,000 500 5,800 As Is 4% 6% 10% 800 2,000 2,800 1,000 1,000 1,500 500 2,000 Proposed 3% 5% 8% The balance in the Allowance for Doubtful Accounts has a Credit balance of $250 before any adjustments. What would be the adjusting entry under the As Is Calculation? You may omit the date, account numbers and descriptions in the journal entry. What would be the adjusting entry under the Proposed Calculation?: You may omit the date, account numbers and descriptions in the journal entry. If the Company changes from the As Is percentages to the Proposed Percentages, what happens to Net Income on the Income Statement? Make sure to indicate if the change results in lift to Net Income or a reduction to Net Income and the amount. Company B uses the Analysis of Receivables method. However, Management has asked us to take a look at the Income Statement Impact if we change the Uncollectible Percentages for Each Budget of Aging. The aging schedule looks like the following: Customer Total Due Current 1-60 Past Due 61+ Past Due A B с D E Total: Aging Category Current (Not past due) 1-60 past due 61+ days past due 1,000 1,500 800 2,000 500 5,800 As Is 4% 6% 10% 800 2,000 2,800 1,000 1,000 1,500 500 2,000 Proposed 3% 5% 8% The balance in the Allowance for Doubtful Accounts has a Credit balance of $250 before any adjustments. What would be the adjusting entry under the As Is Calculation? You may omit the date, account numbers and descriptions in the journal entry. What would be the adjusting entry under the Proposed Calculation?: You may omit the date, account numbers and descriptions in the journal entry. If the Company changes from the As Is percentages to the Proposed Percentages, what happens to Net Income on the Income Statement? Make sure to indicate if the change results in lift to Net Income or a reduction to Net Income and the amount.
Expert Answer:
Answer rating: 100% (QA)
Estimated balances under As is amount uncollectble Current 2800 4 112 160 1000 6 60 61 due 2000 10 2... View the full answer
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
Posted Date:
Students also viewed these accounting questions
-
After gaining enough experience to advance through a first salary schedule (A), police officers at the Los Angeles Police Department are paid annual salaries as described in Table 76 (Schedule 2). As...
-
In developing a company workplace violence prevention program, management has become aware of concerns regarding a drug-free workplace. Several employees have recently come to HR requesting a leave...
-
After getting outstanding grades in high school and scoring very high on his ACT and SAT tests, Clayton Haney had his choice of colleges but wanted to follow his parents legacy and enrolled at...
-
Create a class called Car that includes three instance variablesa model (type String), a year (type String), and a price (double). Provide a constructor that initializes the three instance variables....
-
Yeager Company pays John Kerr a salary as an employee and also fees for work he does as an independent contractor. Does this violate IRS rules?
-
Identify and discuss at least four features of an effective system of internal controls over cash receipts and disbursements.
-
\(\frac{5}{\sqrt{13}}\) Rationalize the denominators of the fractions, and then simplify.
-
Wagner, Inc., manufactures truck tires. The following information is available for the last operating period. Wagner produced and sold 46,000 tires for $60 each. Budgeted production was 50,000...
-
The partnership of Wingler, Norris, Rodgers, and Guthrie was formed several years ago as a local architectural firm. Several partners have recently undergone personal financial problems and have...
-
The following adjusted revenue and expense accounts appeared in the accounting records of Pashi, Inc., an accrual basis taxpayer, for the year ended December 31, Year 2. Revenues Net sales $3,000,000...
-
Literature Review: Based on each of the 7 Research articles. Echenique, M., & Edward, L. (2020). The impact of the mental health shortage: A global perspective. American Journal of Health Sciences,...
-
For the following simply supported beam: a) Determine equations for V(x) and M(x) for sections 0 x 14 and 14 x20. Box your answers. b) Roughly sketch the shear and bending moment diagram for the...
-
You are preparing for a top-level meeting between the Minister of International Trade, the Minister of Foreign Affairs, and senior business executives representing several multinational corporations...
-
1. A rope AB 6 m long is connected at two points A and B at the same level 4.5 m apart. A load of 2000 N is suspended from point C on the rope at 2 m from A, as shown in the figure below. What load...
-
Assume that Fake Stone, Inc. is operating at full capacity. Also assume that assets, costs, and current liabilities vary directly with sales. The dividend payout ratio is constant. The Companys sales...
-
A given hardware contains 5 logic blocks that require 20ns, 35ns, 15ns, 50ns and 25ns respectively. The latches require 10ns to load. To speed up the operation, you pipelined the hardware. Draw your...
-
ACME is trying to decide between two different conveyor beltsystems. System A costs $295,000, has a 4-year life, and requires$97,000 in pretax annual operating costs. System B costs $375,000,has a 2...
-
One study found that the elderly who do not have children dissave at about the same rate as the elderly who do have children. What might this finding imply about the reason the elderly do not dissave...
-
Cara Partners has a client who has inquired about the valuation method best suited for comparison of companies in an industry that has the following characteristics: Principal competitors within the...
-
Cara Kiley owns a newly issued U.S. government agency fixed-rate pass-through mortgage backed security (MBS) and wants to evaluate the sensitivity of its principal cash flow to the following interest...
-
Currently, Charlotte Art Importers is selling at $23 per share. Although you are somewhat dubious about technical analysis, you want to know how technicians who use point-and-figure charts would view...
-
What are three categories of funds that fall under the bond mutual fund group?
-
What is an open-end mutual fund?
-
Choose three categories of stock or bond funds in which you think you might like to invest. Explain why you think they are good investments.
Study smarter with the SolutionInn App