Comprehensive Example for Receivables-F2015-Solution

Comprehensive Example for Receivables-F2015-Solution -...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Comprehensive Example for Receivables ACCT 63037 – Chapter 7 Musicland Company makes 90% of its sales on account and uses the allowance method to account for uncollectible accounts. The following is from Musicland’s balance sheet as of December 31, 2013. Gross Accounts receivable, $104,000 Allowance for Doubtful Account $2,270 During the year 2014, the company reported Total Sales (90% on credit) ……… $810,000 Return on credit sales……………………………… …92,000 Cash collection on accounts Receivable ……… 630,000 In addition, on April 18, Musicland reviewed its accounts and decided to write off the account of $5,800 from Becker Co., as this customer’s account has past due for longer than one year. On July 1, Musicland received a $40,000, 9 month, 5% note dated July 1 from Bailey Co. in granting a time extension on Bailey’s past-due account receivable. Required: 1. What amount of sales and bad debt expense will Wild report under each of the following independent assumptions: (1) Bad debts are estimated to be 0.8% of credit sales
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern