User Account

All Pages

Determine the amount of doubtful debts adjustment

Assignment Help Financial Accounting
Reference no: EM133005136

Problem - Hi-Fi sells electronic products. All sales are conducted on a credit basis and no cash discounts are granted. Ignore GST. The ?nancial year ends on 30 June. The following information was extracted from the accounting records on 30 June 2020:

Sales $437,000

Sales returns and allowances $7,000

Cash collected $280,000

Debts to be written off $3,600

Assume that Hi-Fi uses the allowance method to account for bad debts. Management has estimated bad debts expense for each year at 1% of net credit sales.

Required -

1) What methods are used to estimate bad debts and doubtful debts? Explain which method you would recommend for Hi-Fi Ltd.

2) Determine the amount of doubtful debts adjustment and show the journal entry to record doubtful debts adjustment on 30 June.

3) Show the journal entry to write off bad debts on 30 June.

4) Show the journal entry to record cash collected on 30 June.

5) Determine the amount of bad debts expense reported in the income statement for the period ended 30 June.

Reference no: EM133005136

Questions Cloud

What is sheridan gross profit for march : During March, two cars are sold for a total of $34500. Sheridan determines that at March 31, the $14100 car is still on hand. What is Sheridan's gross profit
Develop a well-reasoned discussion of the issues : Develop a well-reasoned discussion of the issues associated with that topic and your suggestions and recommendations for appropriate interventions, policy
What profit would have been earned : The actual profit was $464,000. What profit would have been earned under a standard marginal costing system
Does the current international norm known as R2P : Does the current international norm known as R2P (the Right to Protect) seem a robust deterrent likely to change the desirability of states for military-based
Determine the amount of doubtful debts adjustment : Determine the amount of doubtful debts adjustment and show the journal entry to record doubtful debts adjustment on 30 June
What account is never affected by the adjusting process : What account is never affected by the adjusting process? Why? Please provide examples. Why do companies make adjusting entries
Make the wage entries related to vacation pay : Supermercado Caridad offers its employees vacation benefits and contributes a 2% contribution to a 401K. Make the wage entries related to vacation pay
What is five safes data analytics framework : What is ‘Five Safes' data analytics framework and Briefly examines the implications of such frameworks when artificially intelligent algorithms
How much is the monthly interest expense : Microsoft signed a note payable and borrowed $150,000 from a bank at an annual interest rate of 6 percent. How much is the monthly interest expense

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine maximum charitable donations tax credit

Ms. Rhonda Fern donates some equipment to the Make A Wish Foundation, Determine her maximum charitable donations tax credit for 2019.

  How should the company treat the cost of the old production

High-End Fashions, Inc. bought a production line,How should the company treat the cost of $500,000 of the old production line in evaluating the rebuilding plan?

  What is the capital balance of deo after his admission

The total capital of the partnership is to be P2,400,000, of which Deo's interest is to be 25%. What is the capital balance of Deo after his admission

  Determine the total contribution margin

For the most recent year, Triad Company had fixed costs of $290,000 and variable costs of 80% of total sales revenue, earned $87,750 of net income after taxes, and had an income tax rate of 35%. Determine the before-tax income. Determine the total co..

  During its inception-transferred these assets and cash

During its inception, Devon Company purchased land for $100,000 and a building for $180,000. After exactly 3 years, it transferred these assets and cash of $50,000 to a newly created subsidiary, Regan Company, in exchange for 15,000 shares of Regan's..

  Give journal entries to rectify the above errors

Rs.50, wages paid on 30th March, 19x1, are not debited to wages account - Give journal entries to rectify the above errors, and prepare suspense account

  Journalize the entry to close the income summary

Calculate the amount of income each partner will receive under their profit and loss sharing agreement and journalize the entry to close the Income summary account for the year.

  What the amortization expense for the lessee would be

For an operating lease, What the amortization expense for the lessee would be? ZZero, as the asset is not recorded nor amortized for an operating lease.

  Determining the accounting equation effects of transactions

Determining the Accounting Equation Effects of Transactions [LO 5-3] La-Z-Boy Incorporated is a furniture manufacturer. Listed here are typical aggregate transactions from the first quarter of a recent year (in millions).

  Why increasing fcf is important to accomplish

Explain why increasing its free cash flow (FCF) is important to accomplish this strategy. Washed Water, a technology manufacturer that produces

  Explain the two discounted cash flow approach

Identify which approach (Traditional Cash Flow vs. Expected Cash Flow) you would recommend and why? Explain the two discounted cash flow approach

  Prepare financial statements for the canadian subsidiary

Prepare financial statements for the canadian subsidiary in its functional currency.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd