Task Team: 1... 2... On Dec 31, 2016, Riyadh Company had accounts: 1. Credit sales Chapter...

 

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Task Team: 1... 2... On Dec 31, 2016, Riyadh Company had accounts: 1. Credit sales Chapter 8- Exercise 2 $2,500,000 800,000 120,000 4. Sales returns and allowances 280,000 5. Beginning accounts receivable 750,000 6. Allowance for doubtful accounts (credit) 12,000 7. The aging schedule (aging method) for the company's accounts receivable is shown in the following table: # of Days Outstanding 2. Ending accounts receivable 3. Sales discounts 0-30 31-60 61-90 Over 90 Amounts: $ 100,000 300,000 300,000 100,000 Estimated % Uncollectible 2% 4% 6% 8% Requirements: a. If the compnay's use the percentage of net credit sales method (3%) to estimate its allowance for the doubtful accounts, answer the following two questions: What is the balance of the allowance for doubtful accounts on Dec 31, 2016? • What is the bad debt expense that should be reported in the 2016 income statement? b. If the compnay's use the percentage of the aging method of accounts receivable to estimate its alloance for the doubtful accounts, what is the required balance for the the doubtful accounts on Dec 31, 2016? • What is the balance of the allowance for doubtful accounts on Dec 31, 2016? • What is the bad debt expense that should be reported in the 2016 income statement? Task Team: 1... 2... On Dec 31, 2016, Riyadh Company had accounts: 1. Credit sales Chapter 8- Exercise 2 $2,500,000 800,000 120,000 4. Sales returns and allowances 280,000 5. Beginning accounts receivable 750,000 6. Allowance for doubtful accounts (credit) 12,000 7. The aging schedule (aging method) for the company's accounts receivable is shown in the following table: # of Days Outstanding 2. Ending accounts receivable 3. Sales discounts 0-30 31-60 61-90 Over 90 Amounts: $ 100,000 300,000 300,000 100,000 Estimated % Uncollectible 2% 4% 6% 8% Requirements: a. If the compnay's use the percentage of net credit sales method (3%) to estimate its allowance for the doubtful accounts, answer the following two questions: What is the balance of the allowance for doubtful accounts on Dec 31, 2016? • What is the bad debt expense that should be reported in the 2016 income statement? b. If the compnay's use the percentage of the aging method of accounts receivable to estimate its alloance for the doubtful accounts, what is the required balance for the the doubtful accounts on Dec 31, 2016? • What is the balance of the allowance for doubtful accounts on Dec 31, 2016? • What is the bad debt expense that should be reported in the 2016 income statement?

Answer rating: 100% (QA)

a Balance in allowance for doubtful accounts as on Dec 31 20... View the full answer