Review Exam 4

Review Exam 4 - I. % of Sales Method a. Make the entry to...

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Unformatted text preview: I. % of Sales Method a. Make the entry to record bad debts expense Cash Inventory Balance 150,000 500,000-5,000 350,000 300,000 500,000 (10,000) Balance 150,000 500,000-15,000 350,000 300,000 500,000 II. Aging Method Age Interval Uncollectible % Not past due 2% 1-30 past due 5% 31-60 past due 10% 61-90 past due 20% 91-180 past due 30% 181 past due 100% Aging of Accounts Receivable as o Invoice Invoice Date Balance Not past due Days past 1-30 31-60 61-90 101 11/29/2006 1,000 106 12/15/2006 500 110 12/20/2006 250 154 9/12/2007 1,100 1,100 180 9/15/2007 1,500 1,500 210 10/1/2007 2,690 2,690 214 10/3/2007 1,200 1,200 225 10/15/2007 500 500 258 11/9/2007 1,100 1,100 261 11/15/2007 1,600 1,600 300 12/9/2007 450 450 301 12/10/2007 500 500 302 12/14/2007 350 350 303 12/15/2007 1,100 1,100 13,840 2,400 2,700 4,390 2,600 A company has credit sales of $1,000,000 and estimates that 1% of credit sales are bad debts. Accounts re-ceivable Allow. for bad debt = Accounts payable Common stock A company has produced an accounts receivable aging below. From its experience, it has determined that the following uncollectible percentages apply to the following aging categories: a. Complete the following table Estimated Uncollectible Accounts Age Interval Balance Percent Amount Not past due 2,400 2.0% 48 1-30 past due 2,700 5.0% 135 31-60 past due 4,390 10.0% 439 61-90 past due...
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Review Exam 4 - I. % of Sales Method a. Make the entry to...

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