2. Tonka Industries sold inventory to customers on account totaling $90,000 during 2019. The inventory cost Tonka
Question:
2. Tonka Industries sold inventory to customers on account totaling $90,000 during 2019. The inventory cost Tonka Industries $42,000.
3. During 2019, Tonka Industries collected $53,600 from customers who previously charged on account.
4. On December 31, 2019, Tonka Industries recorded its uncollectible accounts estimate. Tonka Industries estimates that $1,350 will be uncollectible.
5. On February 19, 2020, Tonka Industries received notification that Jan Levinson, who owes Tonka Industries $900, has filed for bankruptcy. Tonka Industries writes off Ms. Levinson’s account.
7. After invoicing the customer for more than one year, Tonka Industries decides to write-off the $200 accounts receivable balance of David Wallace.
8. Tonka Industries Corporation’s 2020 sales on account totaled $213,600. Inventory sold during 2020 cost Tonka Industries $103,000.
9. During 2020, Tonka Industries collected $80,000 from customers on open accounts receivable.
10. At the end of 2020, Tonka Industries estimates uncollectible accounts of $6,890
Summary Questions:
1. How much uncollectible accounts expense will appear on Tonka Industries Corporation income statement for the year ended December 31, 2019?
2. Calculate the net realizable value of receivables that will appear in the December 31, 2019 balance sheet.
- Accounts Receivable from #2
- Accounts Receivable collected from #3
= Ending Accounts Receivable Balance on December 31, 2019
- Allowance for Doubtful Accounts in #4
= Net Realizable Value of Receivables as of December 31, 2019
3. How much uncollectible accounts expense will appear on Tonka Industries Corporation income statement for the year ended December 31, 2020?
4. Calculate the net realizable value of receivables that will appear in the December 31, 2020 balance sheet. Hint: Remember that Accounts Receivable and Allowance for Doubtful Accounts are both balance sheet accounts, and their balances carry forward from year-to-year.
Beginning Accounts Receivable balance (ending balance on 12/31/19 calculated in #2 above)
+ Sales on account from #8
- Accounts Receivable collected from #9
- Write-offs during 2020 (from #5 and #7)
= Ending Accounts Receivable Balance as of December 31, 2020 ;
Beginning Allowance for Doubtful Accounts balance (ending balance on 12/31/19)
- Write-offs during 2020 (from #5 and #7)
+ 2020 uncollectible accounts estimate in #10
= Ending Allowance for Doubtful Accounts Balance as of December 31, 2020 Accounts Receivable
- Allowance for Doubtful Accounts
= Net Realizable Value of Receivables as of December 31, 2020
Expert Answer:
1 2 3 4 Uncollectible accounts expense that will appear on Tonka Industries Corporation income state... View the full answer
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
