8.03 Assignment - Uncollectable Accounts Receivable .docx - Shianne Santiago Keystone Accounting Teachers Accounting Uncollectable Accounts Receivable

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Shianne Santiago Keystone Accounting Teachers Accounting May 30, 2020 Uncollectable Accounts Receivable Part 1: William’s card shop is planning to expand. Before it expands, the owner wants to review the uncollectible accounts. William asks you to calculate the percentage of uncollectible accounts per year. Year Net Sales Uncollectible Accounts Year 2 $ 23,000 $ 800 Year 3 28,750 1,200 Year 4 46,000 1,345 Year 5 52,000 1,150 Instruction : Calculate the percentage of uncollectible accounts per year. Year Net Sales Uncollectible Accounts Percentage Year 2 $ 23,000 $800 3.48% Year 3 $28,750 $1,200 4.17% Year 4 $46,000 $1,345 2.92% Year 5 $52,000 $1,150 2.21% 800/23,000 = .03478… → ≈ 3.48% 1,200/28,750 = .04173… → ≈ 4.17% 1,345/46,000 = .02923… → ≈ 2.92% 1,150/52,000 = .02211… → ≈ 2.21%
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Part 2: Below are the end-of-period account balances for several stationery and office supply companies: Name of the Companies Sales Sales Discount Sales Returns and allowances Percentage of Net Sales Uncollectible Andrews Co $142,360 $1,423 $936 2 The Book Nook $209,100 $3,180 $1,139 1 Cable Inc $173,270 $1,730 $1,540 1 ½ Davis Inc $65,460 $650 $690 2 Ever – Sharp Co $95,085 $900 $1,035 1 ¼ Each company uses the percentage of net sales method to estimate its uncollectible accounts
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  • Spring '13
  • Generally Accepted Accounting Principles, Net Sales, Year Three, William’s card shop

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