Reference no: EM132983561
Question - On 1 July 2020, Essex Auto Services had the following balances:
Accounts receivable: $50,000 (debit)
Allowance for doubtful debts: 4,000 (credit)
During the year ending 30 June 2021, Essex Auto Services recorded the following:
Sales of $500,000 ($300,000 were on credit; $200,000 were for cash)
Collections on account of $291,000
Write-offs of bad debts of $13,000
Bad debt expense estimated at 5% of credit sales
Required -
(a) Prepare the journal entries to record sales, collections, bad debts expense, and write-offs of bad debts for the year ending 30 June 2021.
(b) Show how Essex Auto Services would report Accounts receivable on its balance sheet on 30 June 2021?
(c) Briefly explain the 'allowance' method for recording bad debts expense and how it differs from the 'direct write-off' method. Explain why the 'allowance' method is considered to be more appropriate than the 'direct write-off' method for recording bad debts?
|
How much can mr ranier claim as deduction
: Mr. Ranier leased his vacant lot for a period of 12 years to Mr. Evan at an annual rate of P2,400,000. How much can Mr Ranier claim as deduction
|
|
How much money will have at the end of investment horizon
: How much money will you have at the end of your investment horizon? Suppose you save $2,039 at the end of year 1 and keep it in the account until end of year.
|
|
Prepare dated journal entries
: Prepare dated journal entries, in the books of Q8T corporation, to record the incurrence and settlement of this foreign currency transaction
|
|
Prepare the journal entries to record accrued payroll
: Using the above information, complete the below table and prepare the journal entries to record accrued payroll and cash payment of the net payroll for July
|
|
Prepare the journal entries to record sales
: Prepare the journal entries to record sales, collections, bad debts expense, and write-offs of bad debts for the year ending 30 June 2021
|
|
What is the effective dollar interest rate
: You can invest in the US at 9.2% per annum or in Canada at 7% per annum. What is the effective dollar interest rate from investing in Canada
|
|
Prepare journal entries to reflect the revaluation of asset
: Prepare journal entries to reflect the revaluation of the asset and the subsequent depreciation of the revalued asset
|
|
What is the present value of an annuity
: What is the present value of an annuity of $20,000 recieved at the end of the year for 8 years where the required rate of return is 6.25% per annum
|
|
Prepare journal entries to record all of the events
: The allotment money was received by 18 April 2019. Share issue costs of $3,500 were also paid on the same date. Prepare journal entries to record all of events
|