Valix Finacc vol 1 Problem 5-16

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 5-16

1.  Accounts receivable – Jan. 1              1,500,000                 4,410,000/98%           4,500,000

     Sales                                                    7,935,000

     Recovery                                                  15,000                2,475,000/99%           2,500,000

     Collections                                         (8,000,000)

     Sales discount                                     (   115,000)               Sales discount:

     Writeoff                                               (     55,000)                  2% x 4,500,000            90,000

     Sales return                             (     30,000)                  1% x 2,500,000            25,000

     Accounts receivable – Dec.  31           1,250,000                                                    115,000