Chapter 1 Problem 5-14
Requirement a
1. Cash 800,000
Accounts receivable 7,200,000
Sales (800,000/10%) 8,000,000
2. Cash 684,000
Sales discount (5% x 720,000) 36,000
Accounts receivable(10% x 7,200,000) 720,000
3. Cash 5,940,000
Accounts receivable 5,940,000
4. Sales discount 10,000
Allowance for sales discount 10,000
5. Sales return 80,000
Accounts receivable 80,000
6. Allowance for doubtful accounts 60,000
Accounts receivable 60,000
Accounts receivable 10,000
Allowance for doubtful accounts 10,000
Cash 10,000
Accounts receivable 10,000
7. Doubtful accounts 70,000
Allowance for doubtful accounts 70,000
Required allowance – December 31 (5% x 2,400,000) 120,000
Less: Allowance before adjustment 50,000
Doubtful accounts 70,000
Rate = 100,000/2,000,000 = 5%
Requirement b
Accounts receivable 2,400,000
Less: Allowance for doubtful accounts 120,000
Allowance for sales discount 10,000 130,000
Net realizable value 2,270,000
No comments:
Post a Comment