Problem 5-26 Determination---Starwomen

Problem 5-26 Determination---Starwomen - Problem 5-26...

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Problem 5-26 Determination of account balances-percent of receivables allowance method of accounting for uncollectible accounts. During the first year of operation, 2012, Martin’s Appliance recognized $292,000 of service revenue on account. At the end of 2012, the accounts receivable balance was $57,400. Even though this is his first year in business, the owner believes he will collect all but about 4 percent of the ending balance. Required a. What amount of cash was collected by Martin’s during 2012? b. Assuming the use of an allowance system to account for uncollectible account, what amount should Martin record as uncollectible expense in 2012? c. What is the net realizable value of receivable at the end of 2012? d. Show the effect of the above transactions on the financial statements by recording the appropriate amounts in the horizontal statement model like the one shown here. When you record amounts in the cash flow column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The letter NA
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This note was uploaded on 02/16/2012 for the course AMERICAN I American I taught by Professor Americaninternationcollege during the Spring '12 term at American Internation College.

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Problem 5-26 Determination---Starwomen - Problem 5-26...

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