UCB+UGBA102A+Topic05+Slides+Appendix

UCB+UGBA102A+Topic05+Slides+Appendix - Cash, Receivables...

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UGBA102A Introduction to Financial Accounting Appendix
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UGBA102A Dennis Geyer 2 Review Problem 7 JPG Company sells merchandise on account to its customers. During the year ended December 31, the company had net sales of $800,000. At the end of the year, it had accounts receivable of $220,000 and a debit balance in allowance for uncollectible accounts of $3,100. In the past, approximately 2.0% of net sales have been uncollectible. Also, an aging analysis of accounts receivable revealed that $12,000 appear to be uncollectible. Compute Uncollectible Accounts Expense and determine the ending balance of Allowance for Uncollectible Accounts and Accounts Receivable (net) under (a) the Percentage of Net Sales Method, and (b) the Accounts Receivable Aging Method.
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UGBA102A Dennis Geyer 3 Review Problem 7 (a) Percentage of Net Sales Method Uncollectible Accounts Expense = 2% x $800,000 = $16,000 Allowance for Uncollectible Accounts = $16,000 - $3,100 = $12,900 Accounts Receivable, net = $220,000 - $12,900 = $207,100
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This note was uploaded on 09/20/2009 for the course UGBA 102A taught by Professor Udpa during the Summer '07 term at University of California, Berkeley.

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UCB+UGBA102A+Topic05+Slides+Appendix - Cash, Receivables...

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