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....
-
Trump Office Supplies paid a $3 dividend last year. The dividend is expected to grow at a constant rate of 7 percent over the next four years. The required rate of return is 14 percent (this will...
-
Annual sales, in millions of dollars for 21 pharmaceutical companies follow. a. Provide a five-number summary. b. Compute the lower and upper limits. c. Do the data contain any outliers? d. Johnson &...
-
What are the reasons for most companies having a poorly co-ordinated collection of environmental data? How are these reasons related to the distinction made between fixed and variable costs of...
-
How do the customer and contractor know if each one completely understands the statement of work, the work breakdown structure, and the program plan?
-
A recipe for baked stuffed potatoes calls for 6 potatoes and yields 12 servings. If the yield percent for the potatoes is 81% and 1 potato weighs 5 ounces, how many pounds of potatoes will you need...
-
During 2020, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets Date Acquired Purchase Price Brokers Commission Paid at Time of Purchase 300 shares of IBM...
-
At the end of the current year, the accounts receivable account has a debit balance of $932,000 and sales for the year total $10,570,000. The allowance account before adjustment has a debit balance...
-
write a reasearch proposal on The Impact of Accounting Software on Business Performance,with the introduction,literature review,research proplem,objective,background
-
During the month of June, the mixing department produced and transferred out 3,500 units. Ending work in process had 1,000 units, 40 percent complete with respect to conversion costs. There was no...
-
Identify Improvements to Communication Protocols: Reflect on the process of creating the client communication strategy and social media post. Identify and document areas Bounce Fitness can improve...
-
Given some function f(x) = bx, find f(x2), where x, and x2 are value of x from the domain of f(x). f(x)'
-
Accounting for Inventory Transactions with Purchase Commitments The following data is from Sonic Inc. Nov. 1, Year 1: Sonic Inc. entered into a purchase contract (not subject to revision or...
-
Consider vectors A = 4.0 ^ + 3.0 j ^ and B = -4.0 ^+ 8.0 j ^. Part A Calculate A+ B. Express your answer as ai+yj. Enter the x and y components of the vector separated by a comma. A + B = Submit...
-
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...
-
Which of the following questions would an auditor ask while auditing accounts receivable to add value to an audit? a. Are accounts receivable pledged? b. Are customers satisfied with your billing...
-
What are some inquiries an auditor can make when examining the long-term debt account to add value to the audit?
-
Beta, Inc., is an affiliate of an audit client and is audited by another firm of auditors. Which of the following is most likely to be used by the auditor to obtain assurance that all guarantees of...
Study smarter with the SolutionInn App